End of Year Break

I will not be posting again until after the New Year. I wish everyone the best in 2011.

Saxby

Elliott Wave - U.S. Dollar Index - 16 Dec 10

Elliott Wave - S&P500 Cash Index - 15 Dec 10

Elliott Wave - World Gold Index (Daily) - 14 Dec 10

Long Term World Gold Index (Weekly Chart)

Long Term World Gold Index (Monthly Chart)

     There have been no other Elliott Waves shown by the monthly chart since the fourth wave triangle completed in mid-2009. But that doesn't mean there aren't any items of interest!
     After the Sequential sell associated with the triangle (note countdown bar 13 in January 2008) we are on the verge of creating another sell setup (as long as we close December 2010 above 1248.00). This sets up what is called the 9-13-9 sell pattern. As we watch for this development on the monthly chart I will examine the weekly chart for supporting evidence in my next posting.

Ten Year Bond Yields (Daily)

     From the October 8 low the ten year yield as rallied nicely and is now in either wave '3' of an impulse or wave 'c' of a zigzag. We have not yet seen a complete TD Sell Setup during the advance, and would not expect the wave pattern to end until we complete one.

Ten Year Bond Yields (Weekly)

     Today's look at the yield of the 10 year bond is most interesting from a TD Sequential point of view. But first a quick note on the wave structure.
     Once a 21 bar price low was recorded after the end of wave 'b' on April 9 we could look for the end of wave 'c'. This occurred on May 7. Wave 'c' was certainly complete once we had a 13 bar price high after that point, which just happened on November 19. Thus we can say that a complete Flat pattern has played out from the June 2010 high.
     Wave 'a' of this flat was accompanied by a TD Buy Setup (the number 9) and bullish divergence between the RSI and Composite indices (shown above the price chart). We then had a nearly 100% retracement rally to the wave 'b' high.
     A TD Countdown 13 posted on June 25 but, although accompanied by a RSI/Composite divergence was not followed by a 'price flip'. Instead a new TD Setup followed which completed on August 20. After a minor corrective bounce it was followed by a new low. However, since it had another RSI/Composite divergence with it we were justified in placing a buy stop loss at 24.26 (the horizontal cyan line on the price chart). This line never had a confirmed break and then a final (third in the series) RSI/Composite bullish divergence led to the current rally and the end of the Flat pattern discussed above.
     Tomorrow we will look at the daily chart to see what has happened since the end of the Flat.

Ten Year Bond Yields (Monthly)

     Today's post continues the examination of the ten year bond yield begun yesterday. On the monthly chart shown above (which begins Jun 07) a TD Buy Setup completed (indicated by the number 9) in Apr 08 and was followed by a 50% retracement rally. After that there have been no other setup or sequential countdown milestones. Towards the end of the chart we can see that countdown bar #12 was posted in Sep 10 and a buy setup bar #8 in Nov 10.
     There are three Elliott Wave counts viable from the June 2007 high. The one depicted in pink is a developing Double Three (a-b-c-x-a-b-?); the one in gold a Triangle (A-B-?-?-?) and the one is silver a new corrective pattern (Flat or Triangle) that begins at the Dec 08 low. Note that with all of these counts the action over the past few months is important - did an Elliott Wave pattern end recently?
     I will focus on answering that question with a look at the weekly chart in the next posting.

Ten Year Bond Yields (Quarterly)

     Today starts a series on the U.S. Government 10 year bond yield, but with a different twist, as I will focus a bit more on DeMark indicators. Please refer to http://www.marketstudies.com for more information on these indicators.
      Starting from the swing high in 2Q2007, we had a Buy Setup complete (bar #9 marked) in 1Q2009. This caused a TDST resistance line to be put in place at the 53.16 level (red dashed horizontal line). Whenever a buy setup is finished one should anticipate at least a retracement rally, and this is what happened here.
     Notice that the bond yield ran into resistance twice at the 61.8% fibonacci level. The first time it was in conjunction with the short moving average (2Q2009) and the second time in conjunction with the medium moving average (2Q2010). With the resistance being strong it appears that the market now wants to retest the recent lows.
     Also note that from our 2007 starting point we cannot find a price bar with a high greater than any of the four price bars prior to it. This means that we cannot find an Elliott Wave in this chart.
     The analysis will continue next time with the monthly chart.

Elliott Wave - CRB Index (Daily) - 3 Dec 10

I will end the current series of postings on the CRB index with a daily chart depicting the strong advance from the May 2010 high. My Elliott Wave count shows this market in wave 'iv' of a larger wave '3'.

Elliott Wave - CRB Index (Weekly) - 2 Dec 10

     Continuing with the CRB Index ... The weekly chart shows a Leading Diagonal pattern from the February 2009 low up to the January 2008 high. This is either wave '1' of an impulse pattern or wave 'A' of a zigzag.
      The index then corrected in an 'A-B-C' to the May 2010 low. This decline held at the 50% fibonacci retracement level and is either wave '2' of a larger impulse or wave 'B' of a larger zigzag.
     The rally from May 2010 is not yet complete with the next target level at 322-324. I will examine this rally using the daily chart in my next posting.

Elliott Wave - CRB Index (Monthly) - 1 Dec 10

Today begins a series on the Commodity Research Bureau (CRB) Index. After the huge decline from July 2008 to February 2009, the index has recovered in (so far) three waves. The next logical target is just above the market at the TD Trend Factor (purple line) level of 325.74. A fibonacci level is also in this area. Tomorrow I will take a closer look at the move up from May 2010 using a weekly chart.

Elliott Wave - Dollar Index (Daily) - 30 Nov 10

Bottom line: The daily dollar chart is bullish even if a substantial pullback were to occur soon (TDST support is well below the market).

Elliott Wave - Dollar Index (Daily) - 29 Nov 10

     This post continues a brief series on the U.S. Dollar Index. The question asked yesterday was whether an elliott wave Flat pattern ended at the November 2010 low. It certainly looks like it did. I can count a five wave impulse pattern for wave 'C' of the Flat and there was bullish divergence in the RSI Index at the low.
     The implication is that a new upward moving wave pattern began at the November 10 low. I will conclude this series tomorrow by looking at that action.

Elliott Wave - Dollar Index (Weekly) - 26 Nov 10

As mentioned in the last posting, the U.S. Dollar Index made a five wave move to the upside beginning in March 2008. That impulse pattern is either wave '1' of a larger impulse or wave 'A' of a larger zigzag. Since the correction from the high has been so long and deep I favor the larger impulse scenario, which implies the action from the March 2009 high has been wave '2'. So far the correction appears to be playing out as a Flat. Waves 'A' and 'B' are complete. Is wave 'C'? I will look at that using a daily chart next.

Elliott Wave - Dollar Index (Monthly) - 26 Nov 10

     With so much attention lately on the dollar and currencies I thought I would use the next couple of postings to explore the US Dollar Index further. Today's monthly chart shows a complete five wave impulse pattern down from the July 2001 high.
     The impulse wave ended at the March 2008 low. From there we popped higher in a five wave sequence that I have labeled as wave (1) or (A). As of today we don't have a good reason (from the monthly chart) to believe that wave (2) or (B) is complete. Therefore, the action since March 2009 will be reviewed next time using the weekly chart.

Elliott Wave - S&P500 Cash Index - 23 Nov 10

 

If waves 'A' and 'B' are complete from the April 2010 high then we are now in either wave 'C' of an Expanded Flat or wave 'C' of a Triangle. This implies the minimum downside target is about 1120. First we will watch to see what happens at the TD Trend Factor target of 1158.85.

Long Term World Gold Index (Quarterly Chart)

Elliott Wave - 10 Year Yields (Daily) - 19 Nov 10

Elliott Wave - CRB Index (Daily) - 18 Nov 10

Today I begin coverage of the CRB Index.

Elliott Wave - Dollar Index (Daily) - 17 Nov 10

As noted a couple of days ago it appears many markets have, or are near, significant turning points. As such I will begin to rotate through various markets instead of just yapping about the SP500. I start with the Dollar Index.

Bigger Picture Update

Have a Number of Markets Made Significant Turns?

Elliott Wave - S&P500 Cash Index - 12 Nov 10

Elliott Wave - S&P500 Cash Index - 11 Nov 10

Choosing Between Options

Why choose the A-B-C scenario from the April high instead of ending the correction at the July low? One of my reasons is the RSI (shown above the price chart). When it dropped below about 40 in 2008 it signaled a bear market was underway. Until the RSI moves back above the red zone in the chart I will prefer to view the current action as a corrective wave.

Elliott Wave - S&P500 Cash Index - 9 Nov 10

Over the last few postings I have reviewed the larger wave structure using the DJIA. Turning back to the cash SP500, we have the same structure that the DJIA does from the April 2010 high. An "A" wave down which ended on July 1 followed by the approaching end of a "B" wave.

The area from 1222-1228 is a fibonacci cluster area which also contains the TD Trend Factor target from the August 27 low. If my impulse interpretation from August 27 is correct then it must end before 1236 is breached since wave iii can not be the shortest when compared to i and v.

DeMark D-Wave Analysis (Part 3)

Following on from the last post .... Tom DeMark's objective wave counting routine counts out an impulse (1-2-3-4-5) pattern from the March 2009 low. I always try to make an A-B-C count after an impulse so I am expecting that from the April high.

Note the possible RSI divergence developing. We also have a perfected TD Sell Setup on the weekly chart now. So, possible exhaustion here but certainly not confirmed yet. If so we could be ending wave B of an Expanded Flat or Triangle.

DeMark D-Wave Analysis (Part 2)

Here is the wave count when the monthly and weekly time frames are taken into account. Instead of where the quarterly and yearly charts want to end Primary wave three (see previous post), Primary wave three of Cycle wave three ends at the 2000 high and is followed by a large expanded flat pattern.

At the 2009 low the question becomes: "Is the corrective move from 2000 over, or will the pattern extend or become an expanding triangle?"

DeMark D-Wave Analysis (Part 1)

Now that the SP500 has surged higher and the TD Sequential sell has been nullified, let's see if TD D-Wave can shed any light on this market action. I want to begin with the "big picture" and work down the time scales in subsequent posts.

Analysis of the yearly chart of the DJIA (not shown) has Cycle degree wave one (from the 1932 low) ending at the 1966 high. Cycle degree wave two ends at the 1974 low. Cycle degree wave three was shown complete at the 2007 high.

In my interpretation of DeMark's D-Wave I need to see every time scale correctly nested before I harden in a wave ending date. In this instance, before I concede that Cycle wave three ended at the 2007 high I need to see the Quarterly, Monthly, Weekly and Daily charts agree with that assessment.

The Chart shown today is the DJIA Quarterly. It shows that according to D-Wave, Primary three of Cycle three completed at the 2000 high. Primary Four at the 2002 low and Primary Five at the 2007 high. This time frame nests nicely with the Yearly. However, I have put Primary waves Four and Five in Gold because they don't nest correctly on a monthly scale while Primary wave Three does. I will look at the Monthly chart in my next posting.

Elliott Wave - S&P500 Cash Index - 3 Nov 10

QE2 Day

Elliott Wave - S&P500 Cash Index - 1 Nov 10

Big Week Ahead

Elliott Wave - S&P500 Cash Index - 28 Oct 10

Elliott Wave - S&P500 Cash Index - 27 Oct 10

Still Watching for Reaction To TD Sequential Sell

Elliott Wave - S&P500 Cash Index - 25 Oct 10

Elliott Wave - S&P500 Cash Index - 22 Oct 10

Elliott Wave - S&P500 Cash Index - 21 Oct 10

Elliott Wave - S&P500 Cash Index - 20 Oct 10

Elliott Wave - S&P500 Cash Index - 19 Oct 10

Elliott Wave - S&P500 Cash Index - 18 Oct 10

Elliott Wave - S&P500 Cash Index - 15 Oct 10

Elliott Wave - S&P500 Cash Index - 14 Oct 10

Perhaps I was premature in abandoning the 'x' wave scenario? If so then the latest move up is wave 'a' of an 'a-b-c' sequence. A move below 1155.71 from here would make that the primary count (again).

Elliott Wave - S&P500 Cash Index - 13 Oct 10

Watching TD Sequential Unfold ....

I am watching the CRB Index because it is my contention that stocks have been trading like they are a commodity for some time now.

Elliott Wave - S&P500 Cash Index - 11 Oct 10

I hate to do it but I have changed the wave count. I now believe that either an impulse pattern continues to form from the late August low or a new corrective pattern began at the 30 September high.

Elliott Wave - S&P500 Cash Index - 8 Oct 10

Elliott Wave - S&P500 Cash Index - 7 Oct 10