I don’t think that QE zombies count waves like 1 2 3 … they just buy dips and hope that Bernanke and FED are gonna step up and start the printing machines. So far the trend is bullish and it is bullish until it is bearish so I personally see no reason to short right now without a confirmation, though I also think that we may see a correction before the next wave up. Don’t forget also that this is an election year which historically has proven to be bullish (I think only 2 times in history the election year has been bearish).
Bob, I think you are right. Wave ii does look complex. Also witness the fact that all the sub waves within the diagonal are made up of 3 waves as required in ending diagonals. good luck.
Your book looks interesting. Perhaps i will buy it. You said to buy FB under $20. What does the wave count look like here? Does your advice still stand?
Hi Mike, I would prefer to hold back some more time because of my bearish outlook for the broader market. Besides, FB is still struggling. Although I did say back in June that we may consider building longs below 20, I am reluctant to follow through with that advice just yet.
Hello Ramki,
Besides the SP500 I follow the Dow Jones too.
I read your comment today about the SP500.
We know that these indices are not the same, but very similar and your counting doesn´t fit in the Dow.
How do you interpret this divergence? http://dl.dropbox.com/u/6854752/Acertar%20na%20mosca/E-DOW%20JONES.pdf
Regards,
David Gotlib
I do not pretend to know EW as well as you Ramki, but a fellow poster pointed out that this wave count was invalidated in early June when the market moved below 1267.06.
Lulzasaur, I had replied on Forbes, but I prefer that you post here because others also benefit. I had said in brief that yes, there is an overlap of 0.32 points, and I am willing to take my chances on that because (a) we are inside a correction, (I would have been more particluar if I was bullish here.) and (b) maybe there was a bad tick that caused this tiny overlap…
Dear Ramki,….in addition to “what design wave iv” I’m thinking we should expect/anticipate wave v to extend, in that wave i and iii are so close in length, and one impulse wave usually extends. Watching wave v unfold should prove to be….very exciting….”fifth wave extension”
Also sir i was counting your marked wave 3 top to your wave 4 bottom as a 5 wave move down which is clearly evident on daily charts & i was not expecting s&p 500 to clear the
highs of 1422.38.
so i was confused here , how did a 5 wave move down & the subsequent move up cleared the top of a 5 wave decline unless it was a final wave c of an abc correction.
Amit, If you count the wave 3 top as end of wave 5, then the whole thing will change. Let us wait for a few days and decide if a top is in place or not. As traders, we need to be confident of the count, and then move in.
Isnt there a 1 point overlap between waves 1 and 4 marked in Green for the S&P. Doest that make the impulse marking invalid? Wave 4 should not travel into the price of 1 but remain above it. Correct me
Hi Rohit, Yes, there is an overlap of 0.32 points, and normally I wouldnt allow that. BUt we are in a correction, and the infringement is very tiny (possibly a bad tic somehwere) hence, I am giving myself the benefit of doubt.We will soon know, and as there is (supposed to be) a lot of room on the downside, we can always sell on recoveries later on.
Jete, that deep tumble is a possibility, but as of now, consider that as a broad road map. We will negotiate a move down to teh bottom of the wedge first and then take up the big pic again
If valid we should bottom out Friday or first thing Tuesday and head up to 1433-1450 in mid September. A break of 1380 and this count is out the window.
If you look at the DOW it made a new high at the May 2012 highs where as the SPX failed to put in a new high, furthermore if you look at the structure around March-May 2012 it counts fine as a triangle, so the thrust for wave [v] of C was at the May 2012 highs
Counting from the May 2012 highs you have a 5 wave decline in both the SPX and DOW, most Elliotticians are counting the SPX from the March 2012 highs, this IMO is incorrect, the correct point should be at the May 2012 high as the DOW made the new high
So the SPX high into the May 2012 was a truncation
From the wave B low (Nov 2012 lows) you count 5 waves for wave C of [W]
The rally from the June 2012 lows can be considered a corrective B wave and set up a move lower in wave C back to the the Jun 2012 lows
Sebastian, My approach is wait till proved wrong. Secondly, dont trade against the trend, which means, although we have been antcipating this upmove for quite some time, we should wait for a sell signal to turn short.
Hi.
Many Thanks for your quick response.
Best Regards
d.singh on
Hi
what a great site, and the fact that you called this last impulsive move up to the 1435-50 region is very impressive as you even highlighted the fact it may breach the 1400 level only to break to the upside.
You are the only person out there that still holds the belief that we should go down and test 1100 s&p this year. Everyone keeps saying its an election year and that we will not fall or correct much. QE3 or not as you said sometimes things that are supposed to be conceived as positive are the opposite.
I hope your right it will only cement your reputation further
Hello D. Singh, Thank you. But please also appreciate the fact that EWP should be used as an aid to one’s investing and trading decisions. While I have not given up the expectation that there is a likelihood of a top approaching, we have to be mindful of the fact that the fundamnetals and market sentiment are pushing it up. Hence, it is best to wait for the top to be confirmed before attempting to short. On the question of my reputation, that is seldom built on one or two calls! Yet, I am aware that it will disappoint quite a few of my friends in the market if I get this wrong! Let us see.
Many thanks for the response, i understand we must wait till we know the top is in, i am applauding your stance on the markets potentially finding a top here with a big correction to follow as your call is in the face of fierce opposition. Whether you are right or wrong is beside the point the fact that unlike most other people you are not flip flopping between being long and short. Having read your site for a long time this is what i admire most.
I eagerly anticipate the next couple of months.
I had bought FWFF, It is an impressive and clear to understand book.
Reg your study and experience I can go through the posts, and it Sounds perfect.
May you see the light of wisdom by letting knowledge pass to the needy ones.
Why did wave 4 (from 1422 to 1265) look like a 5 wave move when it was supposed to be a corrective move? Corrections should have 3 waves (A-B-C) as per your book. I am confused about this. Thanks for your time.
Hi Karan,
Wave counting is a work in progress. That looked like a 5 wave intitially, but then I figured a way to count it as a 3-wave (wave A)
Just remember that all wave analysis is to allow us to take low risk trades. Irrespective of whether you count it as a 5 wave or 3 wave, you knew that you need to be long down there , and that is what matters to your bottom line
I also bought your book and in the process of reading and digesting it. It is written in a very nice understandable and interesting way. Thank you for keeping this thread alive and for your time sharing your thoughts.
Many people might have already asked this. In case they didn’t, May I ask for your thoughts on the stock market with today’s QE3 announcement from US Fed Govt ? Does your wave analysis still support the market crash as shown in your chart? Appreciate your thoughts..
40 Comments
I don’t think that QE zombies count waves like 1 2 3 … they just buy dips and hope that Bernanke and FED are gonna step up and start the printing machines. So far the trend is bullish and it is bullish until it is bearish so I personally see no reason to short right now without a confirmation, though I also think that we may see a correction before the next wave up. Don’t forget also that this is an election year which historically has proven to be bullish (I think only 2 times in history the election year has been bearish).
Dear Ramki….will wave ii (ending on July 24) be considered a “complex correction” giving us a hint as to the makeup of wave iv (a simple correction)
Bob, I think you are right. Wave ii does look complex. Also witness the fact that all the sub waves within the diagonal are made up of 3 waves as required in ending diagonals. good luck.
Your book looks interesting. Perhaps i will buy it. You said to buy FB under $20. What does the wave count look like here? Does your advice still stand?
Hi Mike, I would prefer to hold back some more time because of my bearish outlook for the broader market. Besides, FB is still struggling. Although I did say back in June that we may consider building longs below 20, I am reluctant to follow through with that advice just yet.
Hello Ramki,
Besides the SP500 I follow the Dow Jones too.
I read your comment today about the SP500.
We know that these indices are not the same, but very similar and your counting doesn´t fit in the Dow.
How do you interpret this divergence?
http://dl.dropbox.com/u/6854752/Acertar%20na%20mosca/E-DOW%20JONES.pdf
Regards,
David Gotlib
HI David, Thanks for the comment. Your chart looks pretty! Let me take a look on my own, and see if I can come up with something soon.
I do not pretend to know EW as well as you Ramki, but a fellow poster pointed out that this wave count was invalidated in early June when the market moved below 1267.06.
Lulzasaur, I had replied on Forbes, but I prefer that you post here because others also benefit. I had said in brief that yes, there is an overlap of 0.32 points, and I am willing to take my chances on that because (a) we are inside a correction, (I would have been more particluar if I was bullish here.) and (b) maybe there was a bad tick that caused this tiny overlap…
Dear Ramki,….in addition to “what design wave iv” I’m thinking we should expect/anticipate wave v to extend, in that wave i and iii are so close in length, and one impulse wave usually extends. Watching wave v unfold should prove to be….very exciting….”fifth wave extension”
Bob, That is a possibility of course..but i would prefer this to become a wedge, in which case the 5th will be shorter. Let us see.
Hello sir,
but the wave 4 here in s&p 500 overlaps wave 1. wave1 high 1267.06 & wave 4 low is 1266.74
pls comment
Hi Amit, Yes, I have responded to a similar question below. Thanks
Also sir i was counting your marked wave 3 top to your wave 4 bottom as a 5 wave move down which is clearly evident on daily charts & i was not expecting s&p 500 to clear the
highs of 1422.38.
so i was confused here , how did a 5 wave move down & the subsequent move up cleared the top of a 5 wave decline unless it was a final wave c of an abc correction.
Kindly guide
Amit, If you count the wave 3 top as end of wave 5, then the whole thing will change. Let us wait for a few days and decide if a top is in place or not. As traders, we need to be confident of the count, and then move in.
Isnt there a 1 point overlap between waves 1 and 4 marked in Green for the S&P. Doest that make the impulse marking invalid? Wave 4 should not travel into the price of 1 but remain above it. Correct me
Hi Rohit, Yes, there is an overlap of 0.32 points, and normally I wouldnt allow that. BUt we are in a correction, and the infringement is very tiny (possibly a bad tic somehwere) hence, I am giving myself the benefit of doubt.We will soon know, and as there is (supposed to be) a lot of room on the downside, we can always sell on recoveries later on.
Wow sir, really very deep tumble until wave 5, am I right?
Jete, that deep tumble is a possibility, but as of now, consider that as a broad road map. We will negotiate a move down to teh bottom of the wedge first and then take up the big pic again
Dear Ramki,
It would be interesting to see if there is an history of such move in S & P 500 in the past.
It will strongly validate your current analysis and foresight.
Regards
R Sathyamurthy
Dear Ramki,
what do you think about gold during the supposed short-market of the us-indices in september?
Thank you for answering!
Ralf
There is a good count in the hourly S&P that aligns with many of the general comments you have made on the S&P and Dow.
S&P Hourly Count
If valid we should bottom out Friday or first thing Tuesday and head up to 1433-1450 in mid September. A break of 1380 and this count is out the window.
Hi Twobits, your link doesn’t seem to work. Perhaps you need to shorten the url by using tinyurl.com THANKS FOR POSTING
If you look at the DOW it made a new high at the May 2012 highs where as the SPX failed to put in a new high, furthermore if you look at the structure around March-May 2012 it counts fine as a triangle, so the thrust for wave [v] of C was at the May 2012 highs
Counting from the May 2012 highs you have a 5 wave decline in both the SPX and DOW, most Elliotticians are counting the SPX from the March 2012 highs, this IMO is incorrect, the correct point should be at the May 2012 high as the DOW made the new high
So the SPX high into the May 2012 was a truncation
From the wave B low (Nov 2012 lows) you count 5 waves for wave C of [W]
The rally from the June 2012 lows can be considered a corrective B wave and set up a move lower in wave C back to the the Jun 2012 lows
please see link provided
http://i1177.photobucket.com/albums/x342/Wavepatterntraders/ter1923.png
what is your count on the S@P after this big move ? Are we still waiting for the big decline. THANKS.
Sebastian, My approach is wait till proved wrong. Secondly, dont trade against the trend, which means, although we have been antcipating this upmove for quite some time, we should wait for a sell signal to turn short.
Thank you for the quick response. Which signal are you looking for that would trigger that sell signal? Thanks Again.
Hi Sebastian , I will look for the same signals that are explained in my book FWTFF!
Will appreciate if you could let us know for the sell signal.
Regards
Hi Dinesh, sure..when the time is ripe for selling, i will probably update.
Hi.
Many Thanks for your quick response.
Best Regards
Hi
what a great site, and the fact that you called this last impulsive move up to the 1435-50 region is very impressive as you even highlighted the fact it may breach the 1400 level only to break to the upside.
You are the only person out there that still holds the belief that we should go down and test 1100 s&p this year. Everyone keeps saying its an election year and that we will not fall or correct much. QE3 or not as you said sometimes things that are supposed to be conceived as positive are the opposite.
I hope your right it will only cement your reputation further
Hello D. Singh, Thank you. But please also appreciate the fact that EWP should be used as an aid to one’s investing and trading decisions. While I have not given up the expectation that there is a likelihood of a top approaching, we have to be mindful of the fact that the fundamnetals and market sentiment are pushing it up. Hence, it is best to wait for the top to be confirmed before attempting to short. On the question of my reputation, that is seldom built on one or two calls! Yet, I am aware that it will disappoint quite a few of my friends in the market if I get this wrong! Let us see.
Many thanks for the response, i understand we must wait till we know the top is in, i am applauding your stance on the markets potentially finding a top here with a big correction to follow as your call is in the face of fierce opposition. Whether you are right or wrong is beside the point the fact that unlike most other people you are not flip flopping between being long and short. Having read your site for a long time this is what i admire most.
I eagerly anticipate the next couple of months.
Many thanks again for replying
I had bought FWFF, It is an impressive and clear to understand book.
Reg your study and experience I can go through the posts, and it Sounds perfect.
May you see the light of wisdom by letting knowledge pass to the needy ones.
Hi Mac, thank you for your kind words.
Hi Ramki,
Why did wave 4 (from 1422 to 1265) look like a 5 wave move when it was supposed to be a corrective move? Corrections should have 3 waves (A-B-C) as per your book. I am confused about this. Thanks for your time.
Regards,
Karan
Hi Karan,
Wave counting is a work in progress. That looked like a 5 wave intitially, but then I figured a way to count it as a 3-wave (wave A)
Just remember that all wave analysis is to allow us to take low risk trades. Irrespective of whether you count it as a 5 wave or 3 wave, you knew that you need to be long down there , and that is what matters to your bottom line
Hello Ramki,
I also bought your book and in the process of reading and digesting it. It is written in a very nice understandable and interesting way. Thank you for keeping this thread alive and for your time sharing your thoughts.
Many people might have already asked this. In case they didn’t, May I ask for your thoughts on the stock market with today’s QE3 announcement from US Fed Govt ? Does your wave analysis still support the market crash as shown in your chart? Appreciate your thoughts..
HI Vish, My bearish call on the S&P500 from 1435-50 is no longer valid.