The Market Pulse

Picking up from where we left off last Wednesday, the above chart shows that I was looking for w.v circle where w.(i) had completed. Today's close above the origin of w.(i) or 1206.75 negates any interpretation of a fifth wave and my interpretation is invalid. 

Tonight we'll explore an alternate count.

W.iv circle appears to be unfolding as a W-X-Y, double zig-zag. Several Fibonacci levels ( 1120, 1228, 46-49 ) are the levels I'll be watching for failures and the termination of w.iv circle. Notice that price remains within the corrective price channel suggestion that this rally is corrective and not an impulsive move. On a closing basis, a break above the upper boundary would cause concern for this view.

Helicopter Ben's Meddling Stops The Bleeding

The rally from 1097.5 has the distinct look of Bernanke meddling. Did the market anticipate that he would leave the door open to further stimulus and then rally even more upon the FED's statement? Did the FED talk a good game and place a floor right under the market for a second time? I'll let the market provide that answer.

Even though the bulls are getting a bit brave with the Bernanke Put by their side, I see nothing to indicate that a new impulsive wave has begun. The 2007-2011 analogy that I've been following suggests that today's move, albeit slightly different, at the daily chart level (see charts below), in 2007 still suggests that a final round of selling will occur and draw prices below 1097.5.

The highlighted section shows that a new recovery high did not occur before completing another sequence of selling whereas.....

.... today's rally made a new high adding uncertainty to the overall minor degree interpretation.

 

While the daily and intraday chart levels deviates from the analogy, the monthly chart level that was show in my Global Gains video clearly shows that the larger degree is still very much intact and the rally was called for off the lows.  According to the analogy, the rally ends by months end.

Let's see what happens in the next two trading days.

Best of Trading

Heard on the Street

Does a Recent Fibonacci Expansion Series

Confirm the Bear Market Return?

Announcements:

• On August 20,2011 I will be releasing my Global Gains -- Mid Year Forecast covering 20 markets (World indices, Currencies, Energy, Commodities and Metals) as well as some key intermarket relationships that you should be watching.
• In September, watch for details on my new premium service Signal Watch RT ® -- a premium service -- providing insightful, real - time intraday elliott wave analysis. A complete list of features, benefits and special discount pricing will be available for current Twitter followers.
•  Not a Twitter fan? You can get my most recent blog posts quickly and easily by "following my blog" or subscribing to my RSS feed. See the top right portion of my blog for details.

 The Market:

The Emini SP continues to follow my 2007-2011 analogy. It's interesting to listen to and read the bull/bear debate from the talking heads and other pundits. I'll stick with the charts!

Listen to my weekend video -- Heard on the Street -- to gain unfair advantage over other traders during the upcoming trading week.

Best of Trading

The Market Pulse

It seems like days since I began looking for w.iv circle to unfold. The price action on the 120 min chart level appears to finally, yet violently, be putting together a sideways move. Earlier today I tweeted that wave overlap had occurred and expected the entire move from w.iii circle or 1097 to be fully retraced when the pattern completed. I stand firm in that assessment.

Also note that w.iv circle looks like a flat correction (3-3-5). However, any corrective pattern that begins with a three wave structure could also develop into a triangle or combination. Therefore, we'll remain on guard to these alternate possibilities.

Should the flat correction play out, it's the perfect set up where w.c of w.iv circle = w.a at 1192.25 and is in agreement with the most common .382 , Fibonacci retracement,  for 4th waves at 1191.25.

One caveat is that on lower time frames, w.(b) may not be completed. If it isn't , then I may have to revise my upside targets.

A loss of 1097 before reaching beyond the w.(a) extreme of 1175.5 would negate this view and the pattern would need to be reassessed.


In conclusion , the trend remains down with the full expectation that a new low will occur and that the Bear Raid is incomplete.

Best of Trading.

Heard On The Street: $ES-F #Copper #Soybeans $EUR-USD

INTRODUCTION and ANNOUNCEMENTS:

Today the world finds itself at a crossroad of immense proportions. Possible European Sovereign Default and the U.S. Debt Ceiling /consequences of a possible downgrade remain atop of one's "Wall of Worry" list. Huge changes are coming in the near future whether we're ready for them or not. Many investors cling to the false hope that the economic storm is over and that their battered portfolios will recover from a decade of lost returns. As they will find out, it may be only just beginning.

Don't worry. The sky is not falling and the world is not coming to an end. In fact, the future has never looked brighter for traders and investors who take the initiative to "batten down the hatches" and position themselves properly in the market for the coming economic hurricane.

On December 20, 2010, I published my first edition of Global Gains where I released my market calls for 2011 with respect to the U.S, Asian and European major indices, Currencies, Metals and Energy. Whether you are a new subscriber or an existing follower, you may want to compare the market position as of  7/15/2011 for each market .... then compare it to my forecasts that were made over a half year in advance. Just click on the Global Gains link above. Every post on this site is dated and time stamped so you know the posts are authentic and NOT after-the-fact. As you will see, most of those calls are outright scarey while others invariably missed the mark. That's just the nature of long term forecasting.  

I'm not reviewing this information to impress you but to impress upon you the value of the Elliott Wave Principle. Secondly, it's nearly time to update my forecasts for the remainder of the year and I think that readers will find similar value in my forecasts. I'm contemplating presenting my forecast in a webinar format near the end of August.  Stay tuned for details!

Lastly, I launched Elliott Wave Live on July 2010 as a free service, consisting of analysis and commentary on the US, Europe and Asia-Pacific markets, commodities, currency pairs, stocks and ETF's using the Elliott Wave Principle, Fibonacci Ratio Analysis and Market Timing strategies. My primary focus has focused upon the E-mini S&P. My insight has been provided primarily through my blog site, video recordings and my Twitter account.

Shortly in the near future, I will be adding another level of service... a premium service, that provides more timely intraday analysis, charts and a greater in depth look at the markets. While I have not finalized all the details and cost of the subscription service, I will offer a free trial where you can kick the tires and slam doors to determine whether this service is right for you.  All will be explained in a short video presentation at a date to be determined.

THE MARKETS:

In this weeks edition of Heard On The Street I'll be covering the Emini SP, Soybeans, Copper and EUR-USD.

Best of Trading

Chart of the Day: $DX_F #USD

The USD appears to be working an expanded flat correction for w.ii circle. A the time of this post, price has reached a strong level of support... so look for a bounce.

However, common fib ratios call for further decline where w.c circle of w.ii circle = 1.618 w.a circle at 74.185 which agrees with the .618 retracement of w.i circle at 74.13. Also note that additional fib support exists at 74.265 which is the .618 retracement of the move from 72.86 - 76.54.

On additional fib relationship that I identified is near the .5 retracement of w.i circle. That level is where w.c circle = .618 w.a circle past w.a circle or 74.4.

In conclusion, the area surrounding 74.13 - 74.4 offers a logical termination point of w.ii circle and offers traders an area of consideration as w.iii circle advances to the upside. Any significant decline below 74.13 would warn that the a larger decline may be unfolding and that the expanded flat interpretation was incorrect.

Best of Trading

Heard On The Street

The S&P has rallied off the 4/18/2011 low but is the market really heading significantly higher or is danger lurking? Learn more by viewing this weeks video edition of Heard On the Street .



Best of Trading