Thursday, August 19, 2010
Still correcting short move
Okay. I believe the GBP has finished five ways down and is currently retracing. From the chart you can see that I anticipate the correction to carry up to about the 1.5880 area. this will complete the five waves of C wave. From there the short trend should resume. I don't think that will be till next week sometime. The cirtical points are 1.59967. Price must stay below this point for the near term bearish forecast to remain valid. Also, price must break 1.5670 before breaking 1.5507 for the outcome that I have hypothesized to remain valid. A first break of 1.5507 before 1.5670 would mean the correction is likely over and the short trend has resumed.
Monday, August 16, 2010
Still correcting long. Last push
Sterling should make a new high above 1.5701 and reach the target retrace zone I outlined in earlier posts of 1.5711 to 1.5776. Once that movement is over, I believe that will complete a 5 wave ending diagonal that began on 8/15/10 at 19:00. Since that pattern denotes an end to the correction I expect sterling to resume its decline. A good first target for profit on shorts will likely be around 1.5390. Hard to give an exact point now as wave 2 is not over yet.
Friday, August 13, 2010
Triangle and then correct long
I still think the GBP will retrace to above 1.5680 and likely my first retrace zone from the previous chart. In this chart you can see we are coming out of a triangle. this move shoudl prove terminal and then the move long later this afternoon or early evening.
Thursday, August 12, 2010
GBP Ready for a retrace but trend likely to remain short
I think the GBP is ready for a significant retrace. An extended first is my top count but the count may be more bearish. I have indicated retrace zones for both possibilities.
Thursday, July 15, 2010
One more push to a new high
The fifth wave coming out of the triangle looks incomplet. I would expect one more push long above 1.5471 before the seguence long ends. Structrually 1.5522 would be a good place to stop but it could be more or less.
Wednesday, July 14, 2010
A little bit longer for Sterling
The wave structure indicates that another high will llikey come. I am looking for an initial pull back into the 1.5200 to 1.51625 area and then a push past 1.5300. Once this sequence is complete, the GBP should have the ability to turn short.
Tuesday, July 13, 2010
Correction near over
WOW! The GBPUSD has been correcting for almost 2 months now. I believe it is just about over. I believe sterling will make a new high above 1.5240. Once the 5 wave structure is complete to a new high I expect the short to resume and take us to a new low below 1.42295. Once it gets there we will talk again. Could take several weeks.
Tuesday, July 6, 2010
20 Questions with Robert Prechter: Devaluation Won't Work
By Elliott Wave International
The following article is an excerpt from Elliott Wave International’s free report, 20 Questions With Deflationist Robert Prechter. It has been adapted from Prechter’s June 19 appearance on Jim Puplava’s Financial Sense Newshour.
Jim Puplava: In 1933 at the bottom of the crisis, the Roosevelt administration comes in. In its first week they declare a bank holiday, they reopen the banks with the FDIC, they sever gold, they come in with massive fiscal stimulus and they devalue the dollar substantially. The result was from 1933 to1937 we have positive CPI, economic growth, a robust stock market. If fiscal and monetary measures fail to revive the economy and the market, could the government try devaluation to change the deflationary outcome the way they did 1933?
RP: Well, you have to have a benchmark in order to devalue a currency. Our currency isn't pegged to anything, so I don't understand even what the term devaluation would mean. What would they do to do create a devaluation?
Editor’s Note: The article you are reading is just one small excerpt from Elliott Wave International’s FREE report, 20 Questions With Deflationist Robert Prechter. The full 20-page report includes even more of Prechter’s insightful analysis on fiat currency, gold, the Fed, the Great Depression, financial bubbles, and government intervention. You’ll learn how to protect your money -- and even profit -- in today's environment. Read ALL of Prechter's candid answers for FREE now. Access the free 20-page report here.
JP: Maybe they come out with a formal saying: the dollar is now worth a half a euro, X amount of yen or it’s a formal statement. They just declare it formally.
RP: Yeah, but everybody already knows what it's worth, because it's floating freely against these other currencies. And they certainly couldn't fix it to a lesser currency like the euro. And then the managers of this other currency would simply make another decree and negate it. That’s not going to work.
Let's take your example, because it's very important. The whole idea of the government being ahead of the curve is bogus. You know the collapse was from September 1929 down to July 1932, right? The government did not act until it was over. They waited for the bottom of the collapse—of course—and then they finally decided they're going to do something about it. So, months after the low in 1932, they finally shut the banks and pass laws such as Glass-Steagall, which created the FDIC, and the Securities and Exchange Act, and that sort of thing, to bring confidence back into the banking system. I think the same thing is going to happen here. They're going to try the same old stuff, more and more lending, more and more borrowing—which is the problem, not the solution—until everything collapses, and then they'll go, “Oh maybe we should try something else,” and by that time we'll already be at the deflationary nadir, and it'll be time to look for an inflationary outcome.
My whole thesis is exactly along those lines. We want to stay prepared for a deflationary crash, and when it’s over, we're going to convert whatever money we have to stocks, and raw land, and gold, and whatever else we want to buy. That's when—if the government makes a political decision to inflate through currency printing—it would make the decision. They're not going to make it before the bottom. The government has never acted before the bottom, never acted in a new way. Right now these bailouts and other schemes are simply pressing the accelerator harder on what we've been doing since 1913.
Editor’s Note: The article you are reading is just one small excerpt from Elliott Wave International’s FREE report, 20 Questions With Deflationist Robert Prechter. The full 20-page report includes even more of Prechter’s insightful analysis on fiat currency, gold, the Fed, the Great Depression, financial bubbles, and government intervention. You’ll learn how to protect your money -- and even profit -- in today's environment. Read ALL of Prechter's candid answers for FREE now.
The following article is an excerpt from Elliott Wave International’s free report, 20 Questions With Deflationist Robert Prechter. It has been adapted from Prechter’s June 19 appearance on Jim Puplava’s Financial Sense Newshour.
Jim Puplava: In 1933 at the bottom of the crisis, the Roosevelt administration comes in. In its first week they declare a bank holiday, they reopen the banks with the FDIC, they sever gold, they come in with massive fiscal stimulus and they devalue the dollar substantially. The result was from 1933 to1937 we have positive CPI, economic growth, a robust stock market. If fiscal and monetary measures fail to revive the economy and the market, could the government try devaluation to change the deflationary outcome the way they did 1933?
RP: Well, you have to have a benchmark in order to devalue a currency. Our currency isn't pegged to anything, so I don't understand even what the term devaluation would mean. What would they do to do create a devaluation?
Editor’s Note: The article you are reading is just one small excerpt from Elliott Wave International’s FREE report, 20 Questions With Deflationist Robert Prechter. The full 20-page report includes even more of Prechter’s insightful analysis on fiat currency, gold, the Fed, the Great Depression, financial bubbles, and government intervention. You’ll learn how to protect your money -- and even profit -- in today's environment. Read ALL of Prechter's candid answers for FREE now. Access the free 20-page report here.
JP: Maybe they come out with a formal saying: the dollar is now worth a half a euro, X amount of yen or it’s a formal statement. They just declare it formally.
RP: Yeah, but everybody already knows what it's worth, because it's floating freely against these other currencies. And they certainly couldn't fix it to a lesser currency like the euro. And then the managers of this other currency would simply make another decree and negate it. That’s not going to work.
Let's take your example, because it's very important. The whole idea of the government being ahead of the curve is bogus. You know the collapse was from September 1929 down to July 1932, right? The government did not act until it was over. They waited for the bottom of the collapse—of course—and then they finally decided they're going to do something about it. So, months after the low in 1932, they finally shut the banks and pass laws such as Glass-Steagall, which created the FDIC, and the Securities and Exchange Act, and that sort of thing, to bring confidence back into the banking system. I think the same thing is going to happen here. They're going to try the same old stuff, more and more lending, more and more borrowing—which is the problem, not the solution—until everything collapses, and then they'll go, “Oh maybe we should try something else,” and by that time we'll already be at the deflationary nadir, and it'll be time to look for an inflationary outcome.
My whole thesis is exactly along those lines. We want to stay prepared for a deflationary crash, and when it’s over, we're going to convert whatever money we have to stocks, and raw land, and gold, and whatever else we want to buy. That's when—if the government makes a political decision to inflate through currency printing—it would make the decision. They're not going to make it before the bottom. The government has never acted before the bottom, never acted in a new way. Right now these bailouts and other schemes are simply pressing the accelerator harder on what we've been doing since 1913.
Editor’s Note: The article you are reading is just one small excerpt from Elliott Wave International’s FREE report, 20 Questions With Deflationist Robert Prechter. The full 20-page report includes even more of Prechter’s insightful analysis on fiat currency, gold, the Fed, the Great Depression, financial bubbles, and government intervention. You’ll learn how to protect your money -- and even profit -- in today's environment. Read ALL of Prechter's candid answers for FREE now.
Tuesday, June 15, 2010
Big Bear Markets: More Than Falling Stock Prices
Many infamous authoritarian regimes emerged during or after big bear markets
By Elliott Wave International
Fear and uncertainty that drive a severe bear market are the same emotions which can set the stage for authoritarianism, in most any nation.
"Bear markets of sufficient size appear to bring about a desire to slaughter groups of successful people. In 1793-1794, radical Frenchmen guillotined countless members of high society. In the 1930s, Stalin slaughtered Ukrainians. In the 1940s, Nazis slaughtered Jews. In the 1970s, Communists in Cambodia and China slaughtered the affluent. In 1998, after their country's financial collapse, Indonesians went on a rampage and slaughtered Chinese merchants." - Bob Prechter, Wave Principle of Human Social Behavior, p. 270
Why do authoritarian tendencies emerge only during bear markets in stocks?
"As society becomes more fearful, many individuals yearn for the safety and order promised by strong, controlling leaders." - The Socionomist, May 2010
Learn How to Anticipate and Prepare for Political Conflict and War, Bull Markets and Bear Markets. The 118-page Independent Investor eBook covers a vast array of investment topics and exposes myths that mainstream investors accept as fact. Once you learn the real cause of conflict and war, you might be surprised how the stock market plays a key role in forecasting major social events. Click here to download the 118-page Independent Investor eBook for FREE
Bob Prechter's new science of socionomics explains that stock market fluctuations mirror trends in people's collective mood. In simple terms, when the market is buoyant, it indicates positive social mood; the opposite when a bear market takes over.
The fascinating part is that because the stock market and social mood trend closely together, a forecaster can apply Elliott wave analysis to both -- and predict both.
Generally, widespread brutalities and wars do not follow the first phase of a bear market. Extreme violence, when it does occur, often follows the worst part of the market's downturn -- like the end of the Great Depression, a negative social mood period that ultimately ushered in World War II.
But even during the first phase, a negative social mood grows. So, if a forecaster determines correctly where in the wave structure social mood resides, he can make educated forecasts about what will follow in society -- given what has happened before under similar social mood trends.
Authoritarianism is a subject of heated discussions these days, which makes it a timely topic for a socionomic study. The latest, two-part issue of the monthly Socionomist gives you just that: A look at historic trends and specific forecasts for the years ahead.
Learn How to Anticipate and Prepare for Political Conflict and War, Bull Markets and Bear Markets. The 118-page Independent Investor eBook covers a vast array of investment topics and exposes myths that mainstream investors accept as fact. Once you learn the real cause of conflict and war, you might be surprised how the stock market plays a key role in forecasting major social events. Click here to download the 118-page Independent Investor eBook for FREE
By Elliott Wave International
Fear and uncertainty that drive a severe bear market are the same emotions which can set the stage for authoritarianism, in most any nation.
"Bear markets of sufficient size appear to bring about a desire to slaughter groups of successful people. In 1793-1794, radical Frenchmen guillotined countless members of high society. In the 1930s, Stalin slaughtered Ukrainians. In the 1940s, Nazis slaughtered Jews. In the 1970s, Communists in Cambodia and China slaughtered the affluent. In 1998, after their country's financial collapse, Indonesians went on a rampage and slaughtered Chinese merchants." - Bob Prechter, Wave Principle of Human Social Behavior, p. 270
Why do authoritarian tendencies emerge only during bear markets in stocks?
"As society becomes more fearful, many individuals yearn for the safety and order promised by strong, controlling leaders." - The Socionomist, May 2010
Learn How to Anticipate and Prepare for Political Conflict and War, Bull Markets and Bear Markets. The 118-page Independent Investor eBook covers a vast array of investment topics and exposes myths that mainstream investors accept as fact. Once you learn the real cause of conflict and war, you might be surprised how the stock market plays a key role in forecasting major social events. Click here to download the 118-page Independent Investor eBook for FREE
Bob Prechter's new science of socionomics explains that stock market fluctuations mirror trends in people's collective mood. In simple terms, when the market is buoyant, it indicates positive social mood; the opposite when a bear market takes over.
The fascinating part is that because the stock market and social mood trend closely together, a forecaster can apply Elliott wave analysis to both -- and predict both.
Generally, widespread brutalities and wars do not follow the first phase of a bear market. Extreme violence, when it does occur, often follows the worst part of the market's downturn -- like the end of the Great Depression, a negative social mood period that ultimately ushered in World War II.
But even during the first phase, a negative social mood grows. So, if a forecaster determines correctly where in the wave structure social mood resides, he can make educated forecasts about what will follow in society -- given what has happened before under similar social mood trends.
Authoritarianism is a subject of heated discussions these days, which makes it a timely topic for a socionomic study. The latest, two-part issue of the monthly Socionomist gives you just that: A look at historic trends and specific forecasts for the years ahead.
Learn How to Anticipate and Prepare for Political Conflict and War, Bull Markets and Bear Markets. The 118-page Independent Investor eBook covers a vast array of investment topics and exposes myths that mainstream investors accept as fact. Once you learn the real cause of conflict and war, you might be surprised how the stock market plays a key role in forecasting major social events. Click here to download the 118-page Independent Investor eBook for FREE
Wednesday, June 9, 2010
Prechter Called the Uptrend 'Out' in April
By Elliott Wave International
Even non-sports fans have heard by now about the recent debacle known as Baseballgate.
With two outs in the ninth inning, a first-base umpire called "SAFE" when the runner was clearly "OUT." But this was no ordinary missed call; it cost Detroit Tigers pitcher Armando Galarraga a perfect game.
And as the blogosphere flooded with memories of other historic slip-ups that cost "so and so" star "this and that" honor. Demands for the commissioner of baseball to reverse the bad call grew louder by the hour.
It was indeed a very bad call. But the biggest, baddest call of all was not made on a sports field. It was made in the field of finance -- specifically on the stock market. To wit: The mainstream umpires of finance stood near first base, and in April made this emphatic call for the uptrend in stocks:
"SAFE!!"
Call Your Own Shots -- Remove Dangerous Mainstream Assumptions from Your Investment Process. Elliott Wave International's FREE, 118-page Independent Investor eBook shows you exactly what moves markets and what doesn't. You might be surprised to discover it's not the Fed or "surprise" news events. Click here to learn more and download your free, 118-page ebook.
In case you missed the event, here's an instant replay:
"Stocks Remain In A Powerful Bull Market." (April 10 Bloomberg)
"Stocks Haven't Lost Their Appeal As The Market Goes Up, Up, And Away." (April 21 US News & World Report)
"You can use any number of words to describe this bull market. Frothy is not one of them. This market is reasonably priced." (April 21 AP)
"US Stocks Post Longest Winning Streak Since 2004. The recovery should be sustainable and that will drive the market." (April 24 Bloomberg)
"All the economic reports are pointing up... despite lingering worries over debt problems in Greece. Right now, there is virtually no evidence of a top." (April 30 USA Today)
Yet from its April 26 peak, the DJIA turned down in a jaw-dropping 1000-plus point selloff. The market suffered its worst May since 1940.
The markets have no commissioner to reverse the bad call of the financial mainstream. But at least one team of analysts remained ahead of the most game-changing moves in the world's leading stock market, including a forecast that called the rally "OUT" in April 2010. Consider the following insight from EWI President Robert Prechter:
On April 16, Prechter published his April Elliott Wave Theorist titled ""Deadly Bearish Picture." Notice the dates.
"We can project a top...between April 15 and May 7, 2010. It is rare to have technical indicators all lined up on one side of the ledger. They were lined up this way -- on the bullish side -- in late February-early March of 2009. Today, they are just as aligned, but on the bearish side."
April 26 marks the high for the DJIA, followed by the devastating drop on May 7 -- exactly within the date range Prechter's forecast called for.
Call Your Own Shots -- Remove Dangerous Mainstream Assumptions from Your Investment Process. Elliott Wave International's FREE, 118-page Independent Investor eBook shows you exactly what moves markets and what doesn't. You might be surprised to discover it's not the Fed or "surprise" news events. Click here to learn more and download your free, 118-page ebook.
This article was syndicated by Elliott Wave International. EWI is the world's largest market forecasting firm. Its staff of full-time analysts lead by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
Even non-sports fans have heard by now about the recent debacle known as Baseballgate.
With two outs in the ninth inning, a first-base umpire called "SAFE" when the runner was clearly "OUT." But this was no ordinary missed call; it cost Detroit Tigers pitcher Armando Galarraga a perfect game.
And as the blogosphere flooded with memories of other historic slip-ups that cost "so and so" star "this and that" honor. Demands for the commissioner of baseball to reverse the bad call grew louder by the hour.
It was indeed a very bad call. But the biggest, baddest call of all was not made on a sports field. It was made in the field of finance -- specifically on the stock market. To wit: The mainstream umpires of finance stood near first base, and in April made this emphatic call for the uptrend in stocks:
"SAFE!!"
Call Your Own Shots -- Remove Dangerous Mainstream Assumptions from Your Investment Process. Elliott Wave International's FREE, 118-page Independent Investor eBook shows you exactly what moves markets and what doesn't. You might be surprised to discover it's not the Fed or "surprise" news events. Click here to learn more and download your free, 118-page ebook.
In case you missed the event, here's an instant replay:
"Stocks Remain In A Powerful Bull Market." (April 10 Bloomberg)
"Stocks Haven't Lost Their Appeal As The Market Goes Up, Up, And Away." (April 21 US News & World Report)
"You can use any number of words to describe this bull market. Frothy is not one of them. This market is reasonably priced." (April 21 AP)
"US Stocks Post Longest Winning Streak Since 2004. The recovery should be sustainable and that will drive the market." (April 24 Bloomberg)
"All the economic reports are pointing up... despite lingering worries over debt problems in Greece. Right now, there is virtually no evidence of a top." (April 30 USA Today)
Yet from its April 26 peak, the DJIA turned down in a jaw-dropping 1000-plus point selloff. The market suffered its worst May since 1940.
The markets have no commissioner to reverse the bad call of the financial mainstream. But at least one team of analysts remained ahead of the most game-changing moves in the world's leading stock market, including a forecast that called the rally "OUT" in April 2010. Consider the following insight from EWI President Robert Prechter:
On April 16, Prechter published his April Elliott Wave Theorist titled ""Deadly Bearish Picture." Notice the dates.
"We can project a top...between April 15 and May 7, 2010. It is rare to have technical indicators all lined up on one side of the ledger. They were lined up this way -- on the bullish side -- in late February-early March of 2009. Today, they are just as aligned, but on the bearish side."
April 26 marks the high for the DJIA, followed by the devastating drop on May 7 -- exactly within the date range Prechter's forecast called for.
Call Your Own Shots -- Remove Dangerous Mainstream Assumptions from Your Investment Process. Elliott Wave International's FREE, 118-page Independent Investor eBook shows you exactly what moves markets and what doesn't. You might be surprised to discover it's not the Fed or "surprise" news events. Click here to learn more and download your free, 118-page ebook.
This article was syndicated by Elliott Wave International. EWI is the world's largest market forecasting firm. Its staff of full-time analysts lead by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
Wednesday, May 26, 2010
Bigger Than A '10% Correction'?
Every Big Bear Grew From a Cub
May 26, 2010
By Elliott Wave International
The famous "10% correction" that market pundits talk about sounds so nice and tidy, so predictable and tolerable. It's as if this "cute little correction" came neatly wrapped, looked like an M&M candy character, and smiled at you and your family after you open the box.
If only it were so.
"If all the market ever did on the downside was dip 10% once every two years, then investing would be easier than shooting fish in a barrel. Obviously, this is not the case. The fact is that the stock market's movements are a fractal. Declines come in widely varying sizes." - The Elliott Wave Theorist, December 2001
There is no way to know in advance whether a particular market downturn will fall 11%, 35% or 89%. Even the Wave Principle only forecasts probabilities -- not certainties.
Read Part One of Robert Prechter's Latest Two-Part, April-May Theorists FREE
The April-May Theorist series entitled "Deadly Bearish Big Picture" reveals a lucid picture for 2010-2016. It's the flipside of Robert Prechter's February
2009 Forecast for a 'Sharp and Scary' Rally. Click here to download the 10-page part one for FREE now.
One thing that is certain -- every bear market reached a 10% drop before prices fell even further.
And another near-certainty is that too many money managers will use the phrase "buying weakness" when the market falls 10%. On May 7, after the Dow Jones had fallen several hundred points in a few days, two money managers being interviewed side by side said in effect, "Buy." Not a word was said about caution. Not a word was offered about even the possibility of a major trend change in the market.
On the other hand, it was refreshing to hear a representative of a fund family say, "I don't know why anyone needs to be a hero, and try to catch the bottom."
You may be tempted to jump back in because the market has recently "corrected." Yet consider what EWI's Short Term Update subscribers read on May 7 -- ". . .we would caution that some of history's largest stock declines have occurred only after stocks were deeply oversold."
Two key features of the Elliott Wave Principle is its ability to establish a price target for the current trend, and a time range.
In his latest Elliott Wave Theorist (a two-part April-May issue), Robert Prechter tells why market participants should look far beyond a mere 10%-15% move in the now-unfolding trend.
Read Part One of Robert Prechter's Latest Two-Part, April-May Theorists FREE
The April-May Theorist series entitled "Deadly Bearish Big Picture" reveals a lucid picture for 2010-2016. It's the flipside of Robert Prechter's February
2009 Forecast for a 'Sharp and Scary' Rally. Click here to download the 10-page part one for FREE now.
May 26, 2010
By Elliott Wave International
The famous "10% correction" that market pundits talk about sounds so nice and tidy, so predictable and tolerable. It's as if this "cute little correction" came neatly wrapped, looked like an M&M candy character, and smiled at you and your family after you open the box.
If only it were so.
"If all the market ever did on the downside was dip 10% once every two years, then investing would be easier than shooting fish in a barrel. Obviously, this is not the case. The fact is that the stock market's movements are a fractal. Declines come in widely varying sizes." - The Elliott Wave Theorist, December 2001
There is no way to know in advance whether a particular market downturn will fall 11%, 35% or 89%. Even the Wave Principle only forecasts probabilities -- not certainties.
Read Part One of Robert Prechter's Latest Two-Part, April-May Theorists FREE
The April-May Theorist series entitled "Deadly Bearish Big Picture" reveals a lucid picture for 2010-2016. It's the flipside of Robert Prechter's February
2009 Forecast for a 'Sharp and Scary' Rally. Click here to download the 10-page part one for FREE now.
One thing that is certain -- every bear market reached a 10% drop before prices fell even further.
And another near-certainty is that too many money managers will use the phrase "buying weakness" when the market falls 10%. On May 7, after the Dow Jones had fallen several hundred points in a few days, two money managers being interviewed side by side said in effect, "Buy." Not a word was said about caution. Not a word was offered about even the possibility of a major trend change in the market.
On the other hand, it was refreshing to hear a representative of a fund family say, "I don't know why anyone needs to be a hero, and try to catch the bottom."
You may be tempted to jump back in because the market has recently "corrected." Yet consider what EWI's Short Term Update subscribers read on May 7 -- ". . .we would caution that some of history's largest stock declines have occurred only after stocks were deeply oversold."
Two key features of the Elliott Wave Principle is its ability to establish a price target for the current trend, and a time range.
In his latest Elliott Wave Theorist (a two-part April-May issue), Robert Prechter tells why market participants should look far beyond a mere 10%-15% move in the now-unfolding trend.
Read Part One of Robert Prechter's Latest Two-Part, April-May Theorists FREE
The April-May Theorist series entitled "Deadly Bearish Big Picture" reveals a lucid picture for 2010-2016. It's the flipside of Robert Prechter's February
2009 Forecast for a 'Sharp and Scary' Rally. Click here to download the 10-page part one for FREE now.
Saturday, May 22, 2010
The Federal Reserve Does NOT Control the Market
FREE eBook reveals why the Fed is powerless to change the economic course
By Elliott Wave International
As the world's leading stock markets continue to play stomach-hockey with investors via one triple-digit turn after another, the mainstream community takes solace in this core belief: No matter how uncertain things become, the Federal Reserve can at any moment swoop in to set the economy right.
In reality -- the Fed has no such power. This is the revelation of Elliott Wave International's newest complimentary resource from Club EWI: the 35-page eBook titled "Understanding the Fed." Including excerpts from the selected works of EWI President Robert Prechter -- including his 2002 book "Conquer the Crash" and several past "Elliott Wave Theorist" publications -- this riveting report exposes once and for all the most dangerous myths about the Federal Reserve.
Chapter 3 (of the 8-chapter anthology) attends to the "Potent Directors Fallacy" -- i.e., the false notion that the central bank is in control of the U.S.'s money, market, and economy -- and offers this "Conquer the Crash" insight:
"For recent examples of the failure of the idea of efficacious economic directors, just look around. Since Japan's boom ended, its regulators have been using every presumed macroeconomic 'tool' to get the Land of the Sinking Sun rising again, as yet to no avail. The World Bank, the IMF, local central banks, and government officials were 'wisely managing' South East Asia's boom until it collapsed spectacularly in 1997. In America, the Federal Reserve has lowered its discount rate from 6% to 1.25%, an unprecedented amount in such a short time... What will it do if the economy resumes its contraction; lower rates to zero?"
Note: The underlined sentence above was written in 2002. Today, that forecast has come to fruition after the Fed's rate-slashing campaign since September 2008 has brought rates to the zero level.
Chapter 3 then goes on to explain WHY the Fed's monetary policy failed to lift the hot-air balloon of the economy out of the violent credit and housing downdraft. Here, the eBook writes:
"The Fed's ultimate goal is to influence public borrowing from banks. During economic contractions, banks become fearful. At such times, low Fed-influenced rates cannot overcome creditors' disinclination to lend and/or customers' unwillingness or inability to borrow. Thus, regardless of assertions to the contrary, the Fed's purported 'control' of borrowing, lending, and interest rates ultimately depends upon an accommodating market psychology and cannot be set by decree."
Once again, flash ahead to today and the disintegration of optimism and shift toward conservation can be seen in the following data from February 2010:
Year-over-year bank credit was (negative) - 6.8% vs. 10% in 2007
Loan availability to small businesses plunged to the lowest level since interest rate crisis of 1980, thus drying up a major means of debt repayment.
The number of banks tightening their lending standards has soared, while consumer credit and tax revenue is plunging.
And, residential and commercial mortgages are plunging, as more and more home/business owners are walking away from their leases.
In Bob Prechter's own words: Once you can assimilate the truths contained in this eBook, "you will have knowledge of the banking system that one person in 10,000 has."
Do you want to really understand the Fed? Then keep reading this free eBook, "Understanding the Fed", as soon as you become a free member of Club EWI.
By Elliott Wave International
As the world's leading stock markets continue to play stomach-hockey with investors via one triple-digit turn after another, the mainstream community takes solace in this core belief: No matter how uncertain things become, the Federal Reserve can at any moment swoop in to set the economy right.
In reality -- the Fed has no such power. This is the revelation of Elliott Wave International's newest complimentary resource from Club EWI: the 35-page eBook titled "Understanding the Fed." Including excerpts from the selected works of EWI President Robert Prechter -- including his 2002 book "Conquer the Crash" and several past "Elliott Wave Theorist" publications -- this riveting report exposes once and for all the most dangerous myths about the Federal Reserve.
Chapter 3 (of the 8-chapter anthology) attends to the "Potent Directors Fallacy" -- i.e., the false notion that the central bank is in control of the U.S.'s money, market, and economy -- and offers this "Conquer the Crash" insight:
"For recent examples of the failure of the idea of efficacious economic directors, just look around. Since Japan's boom ended, its regulators have been using every presumed macroeconomic 'tool' to get the Land of the Sinking Sun rising again, as yet to no avail. The World Bank, the IMF, local central banks, and government officials were 'wisely managing' South East Asia's boom until it collapsed spectacularly in 1997. In America, the Federal Reserve has lowered its discount rate from 6% to 1.25%, an unprecedented amount in such a short time... What will it do if the economy resumes its contraction; lower rates to zero?"
Note: The underlined sentence above was written in 2002. Today, that forecast has come to fruition after the Fed's rate-slashing campaign since September 2008 has brought rates to the zero level.
Chapter 3 then goes on to explain WHY the Fed's monetary policy failed to lift the hot-air balloon of the economy out of the violent credit and housing downdraft. Here, the eBook writes:
"The Fed's ultimate goal is to influence public borrowing from banks. During economic contractions, banks become fearful. At such times, low Fed-influenced rates cannot overcome creditors' disinclination to lend and/or customers' unwillingness or inability to borrow. Thus, regardless of assertions to the contrary, the Fed's purported 'control' of borrowing, lending, and interest rates ultimately depends upon an accommodating market psychology and cannot be set by decree."
Once again, flash ahead to today and the disintegration of optimism and shift toward conservation can be seen in the following data from February 2010:
Year-over-year bank credit was (negative) - 6.8% vs. 10% in 2007
Loan availability to small businesses plunged to the lowest level since interest rate crisis of 1980, thus drying up a major means of debt repayment.
The number of banks tightening their lending standards has soared, while consumer credit and tax revenue is plunging.
And, residential and commercial mortgages are plunging, as more and more home/business owners are walking away from their leases.
In Bob Prechter's own words: Once you can assimilate the truths contained in this eBook, "you will have knowledge of the banking system that one person in 10,000 has."
Do you want to really understand the Fed? Then keep reading this free eBook, "Understanding the Fed", as soon as you become a free member of Club EWI.
Friday, May 14, 2010
Wednesday, May 12, 2010
Looking for a new low.
I am still looking for a new low below 1.4474. Nothing in the movment sicne 5/7/2010 negates that outlook. The whole move up was corrective. The cable is still under pressure.
Prechter Describes The "Stunning Long-Term Elliott Wave Picture"
By Robert Folsom, Elliott Wave International
Please join me to consider a time in the stock market that lasted just under three years: 32 months, to be precise.
During this period a series of powerful rallies stand out clearly on a price chart. The shortest of these rallies was four weeks, the longest more than five months.
I can even list seven of these rally episodes, with the number of calendar days and percentage gains.
1. 152 days +52%
2. 28 days +11%
3. 77 days +19%
4. 69 days +27%
5. 31 days +30%
6. 35 days +39%
7. 28 days +27%
Get Robert Prechter's Latest Analysis -- Click Here to Download His 10-Page Market Letter FREE
For a limited-time, you can download Robert Prechter's April 2010 Elliott Wave Theorist, the first in a two-part series entitled "Deadly Bearish Big Picture," for FREE! Click here to learn more and download your free Theorist.
This information obviously seems to paint a bullish picture: The stock market was in double-digit rally mode during 43% of the total calendar days in question.
But in fact, those rallies were the days when the bear was catching his breath. The market was the Dow Jones Industrials; the overall period was from November 1929 to July 1932. It devastated investors. The Dow lost 80% of its value. Yes, that includes the rallies listed above.
I said that these rallies stand out on a price chart, and indeed they do -- it's just that the declines stand out even more. There's virtually no "sideways" action. Prices moved rapidly in one direction or the other.
You can see the chart for yourself in the first issue (April issue, page 4) of the two-part series Bob Prechter has published in The Elliott Wave Theorist. Part One was in April, "A Deadly Bearish Big Picture." The final sentence of that issue said Part Two "will update the stunning long-term Elliott wave picture."
Bob just published Part Two. It completes the "Big Picture" he has now delivered to subscribers.
The past doesn't "define" the present or the future, but it sure does provide context. No analyst alive today understands this better than Bob Prechter.
Believe me when I say that the charts and analysis in this two-issue series are unique. The word "stunning" only begins to describe what you'll read
Please join me to consider a time in the stock market that lasted just under three years: 32 months, to be precise.
During this period a series of powerful rallies stand out clearly on a price chart. The shortest of these rallies was four weeks, the longest more than five months.
I can even list seven of these rally episodes, with the number of calendar days and percentage gains.
1. 152 days +52%
2. 28 days +11%
3. 77 days +19%
4. 69 days +27%
5. 31 days +30%
6. 35 days +39%
7. 28 days +27%
Get Robert Prechter's Latest Analysis -- Click Here to Download His 10-Page Market Letter FREE
For a limited-time, you can download Robert Prechter's April 2010 Elliott Wave Theorist, the first in a two-part series entitled "Deadly Bearish Big Picture," for FREE! Click here to learn more and download your free Theorist.
This information obviously seems to paint a bullish picture: The stock market was in double-digit rally mode during 43% of the total calendar days in question.
But in fact, those rallies were the days when the bear was catching his breath. The market was the Dow Jones Industrials; the overall period was from November 1929 to July 1932. It devastated investors. The Dow lost 80% of its value. Yes, that includes the rallies listed above.
I said that these rallies stand out on a price chart, and indeed they do -- it's just that the declines stand out even more. There's virtually no "sideways" action. Prices moved rapidly in one direction or the other.
You can see the chart for yourself in the first issue (April issue, page 4) of the two-part series Bob Prechter has published in The Elliott Wave Theorist. Part One was in April, "A Deadly Bearish Big Picture." The final sentence of that issue said Part Two "will update the stunning long-term Elliott wave picture."
Bob just published Part Two. It completes the "Big Picture" he has now delivered to subscribers.
The past doesn't "define" the present or the future, but it sure does provide context. No analyst alive today understands this better than Bob Prechter.
Believe me when I say that the charts and analysis in this two-issue series are unique. The word "stunning" only begins to describe what you'll read
Thursday, May 6, 2010
Elliott Wave Financial Forecast
Get a free copy of the Elliott Wave Financial forecast by visiting my website
Monday, April 19, 2010
Great Short Oppotunity
The short trend is in place from the April 15th high. We are currently in wave 2 of the larger five. I believe the short will resume shortly after the rise breaks 1.5373 . That is a great spot to go short and ride it to below 1.4780. These are the high probablility wave forms I love.
Monday, April 12, 2010
Short
The long retrace is over and now I expect a move below 1.4780. I'm not feeling well. I'll try and get around to posting a chart.
Sunday, April 11, 2010
A little more long
I have been tracking the subdivisions of this fifth and final wave long. I believe we are still in the 3rd wave of the ending 5th. I will try and announce when I think the wave has ended but it should be soon. Meaning within the next 24 hours or so. I will try and post a chart when I believe the lesser third of this fifth wave is complete. The coming short move should take us below 1.4780 at a minimum.
Thursday, April 8, 2010
Tricky
The market is it's own master. As an analyst it is a good trait to give up quickly on a count when the evidence is staring you in the face. I thought we were getting smaller degree first and second waves for a down run but now it is apparent that the formation that began 4/5/10 at 8am is a triangle. You can see it very clearly on a 60 min chart. I am posting a 5hr chart to give a little more perspective. I think the triangle is completing a 2nd X wave for the entire pattern that began on March 1st. We should have another 5/3/5 wave count in the long direction that will most likely complete the pattern. This could take many days to play out.
Wednesday, April 7, 2010
Short
Based on the latest developments in the wave structure, I believe that wave (iv) is over and that the recent volatility in the GBP is the first series of larger then smaller first and second waves. Odds favor that the Pound should make a new low below 1.4780 now. Chart of the developing short is below.
Monday, April 5, 2010
Last Push Long
Well it did not retrace as deep as I thought it would but it is making the ending diagonal. Looks like it is goingto be shallower on both ends then I thought. I am looking for the GBP to make a new high above 1.5319 and then resume the short move.
Sunday, April 4, 2010
Modification to Short resumption post
Even though the market turned to go short when I predicted, I now believe the long has a little further to go. A detailed analysis of the long leg that began on 3/25 and ended on 4/1 is simply the first leg of what will end up being an ending diagonal. Diagonals are 5 waves. So the current short will probably come down to about 1.5080 (but possibly deeper) and then the long will resume to push above 1.5297. That will be the third leg. I do not believe it will be a strong swift move long. It will look like a zigzag as that is exactly what each leg of an ending diagonal is. I have posted two charts the first labels wave 1 up and the second is an approximation of the ending diagonal.
Thursday, April 1, 2010
Short resumption
As you can see from my last chart, it made the retrace I was expecting. I think the long retrace is just about over. Now the short should resume soon to make the next leg down that should take us beneath 1.4780 and perhaps a good bit further. This coming short wave may be as long as a 1046 pips. Targets are the trend line or equality as represented by the horizontal line at 1.4248
Monday, March 29, 2010
Small push long and then retrace
Just like the title says. I think it could push to 1.5030 and then significantly retrace the long move that began at 1.4800. After those moves, it will make a new high. Too tired to post a chart
Sunday, March 28, 2010
Critical Juncture
I know in my last post I said I would not try and call retraces and so I won't. I do want you to be aware that it is highly probable that wave (iv) on the daily is not over as I had previously labled but merly in the b wave portion. The probably of a significant retrace of several hundred pips or more is possible. I expect it to make one more push short, possibly below 1.4780, and then potentially turn long to make the c wave of (iv). In todays posting I have included my oscillators. There is very clear divergance. This is a strong warning signal of a trend reversal. Ultimately the trend WILL remain short but it could be weeks before the resumption of that trend.
Wednesday, March 24, 2010
Lesson Learned
I was thinking we were going to get a pop long last night before the short resumed. No dice. The lesson is that in a fast moving bear market one should not look too hard for text book or "normal" retracements. The C wave of ii was truncated and then wave iii began. If you have been following this blog you know that I have been calling the major trend short since the begining. The short trend has quite a way to go yet. I won't try and call retracement points. I am simply going to let you know when I think they are over. When I think the dominate short trend is over, only then will I discuss it. A 300 min chart is attched for some perspective. The trend remains short.
Tuesday, March 23, 2010
Going Long
The trend should be long tonight. It should move up into the 1.5180 to 1.5220 range before it resumes the predominently short trend. No chart. I've had a long day!
Monday, March 22, 2010
A or ii
The short has confirmed and we are in wave ii of the (v) wave short that should end somewhere near 1.4320. Currently we have 3 waves long. This is either wave .A of ii or wave ii is complete. I favor the former scenario. In this case, we should have another down up movement before wave ii is over and the short resumes. This event could take another day or so. Either way, this is a great place to get in short and hold till wave iii is complete. See chart below.
Sunday, March 21, 2010
Short
The point was broken and the short seems to be the trend. A break of 1.4870 should seal the deal. Once that is breached a run down to 1.4320 is possible. Of course along the way there will be significant retraces.
Not Sure?
My current count has the pair continuing long. 1.49763 is a critical point at the moment and it is extremely close to breaking it. I am waiting to see if this point is broken. If it does not break then my current count will remain valid. Once I feel I have a strong handle on it I will make another post along with a chart. A break of 1.49763 does not necessarily invalidate a long move I will just have to reassess my current count. I will make another post as soon as the movement warrants it.
Friday, March 12, 2010
Day chart label correction
Based on last nights movement, a relabeling of he day chart is required. The beauty of wave theory is, soemtimes, even when you are wrong you can turn out right. It is looking like (iii) was completed on Mar. 1st as a 9 wave motive wave. This is a motive wave with an undefined extension. Now we are in the (iv) wave correction which should turn out to be a flat. I believe we are very near the a wave completion of that (iv) wave. Since a wave was a 3 wave movement, I would expect the b wave to be a flat or a triangle. A flat is the highest probability. and expanded flat is the highest. this scenario would have price making a new low below 1.4780 before moving long again. We will just have to wait and see. The bottom line is we will likely be trading in the 1.5300 to 1.4700 range for weeks to come.
Thursday, March 11, 2010
Quick Update
Contrary to my previous post, now that the movement has matured, I have a count that could have the short correction complete at 1.5086. This is a spot, that if correct, adhered very well to my post of 3/10 predicting a retrace to 1.5080. I can count 5 waves down on a 5 minute chart begining at 15:10. We will just have to wait and see. Im in heavy and riding to 1.4870. Yeehaa!
A little more long
Looks to me like it is going to correct a little longer than I thought. I am now projecting the retrace will perhaps push as long as 1.5120. It looks like the current move long is turning into a triple zigzag. None of this changes the outlook of another low below 1.4780. It will likely take a while to get there. Perhaps a week or more. The below chart details the long correction that will make up a larger second wave of this ending diagonal that will end up being wave (5) of 3(circle) on the daily chart.
Wednesday, March 10, 2010
Short still on track
I know it is tracing long right now but the short is still the trend. I expect it to continue moving up until at least 1.5020 but more likely to 1.5080 and then resume short below 1.4780. From there I would expect another retrace long above 1.4870 before pushing down one last time to a new low. The attached chart should give an idea what I am talking about.
Tuesday, March 9, 2010
Quick update
I believe themovement since 2 am today is very corrective. I expect the short to resume without much more retrace in the long direction. I would expect 1.5030 would be the limit of the move up. From there the short should resume. At the moment the correction looks like a flat or may morph into a double three correction. I will post a count when it is over. I am still lookigfor it to mvoe below 1.4780 at a minimum.
Monday, March 8, 2010
Push Short and then bigger correction sideways to long
Looks like the call from my last post hit perfectly. Now I expect the GBP to at least make a new low. From there it could go into a sideways to long movement that could last two weeks. During that period I would be looking to sell tops and ride them down until they look exhausted and then do it all over again. I will try and identify when the current short is done and the structure of the bigger fourth wave correctioni as it unfolds. Here is a day chart for now.
Thursday, March 4, 2010
Triple Zigzag
That is what I believe the correction is morphing into. If that is the case the below labeling should be correct. I would expect the stopping zone for the long move to be between 1.51881 and 1.52668. I would try and tighten this up as the correction matures. Please keep in mind that 3 zigzags are the most allowed under wave theory. So once this last zigzag is complete it cannot become more complex and keep correcting. It will make a new low below 1.4780. Great place to take a postion short. Very high probablility trade.
Wave Principle Crash Course: There's No Going Back
For over ten decades, the mainstream financial world has embraced the view that external news events drive trend changes in the markets. In less than ten minutes, EWI's senior tutorial instructor Wayne Gorman shatters that very idea into a fine dust, swept away into thin air.
In part one of his exclusive, three-part Club EWI video series "Why Use The Wave Principle," Wayne first assesses the pitfalls of relying on macroeconomic models to forecast; namely: "An investor is lured into the market at just the worst time, when it's time to sell, and forced out just at the best time to buy."
As for real world examples of this happening, Wayne spans three hundred years of financial history to reveal how the most pivotal economic, political, and environmental events failed to alter the course of their respective markets. Here, the free video includes groundbreaking charts on these (and more) well known episodes:
The S&P 500 and Enron from 2000-2002: The stock market ROSE and continued to proceed upward AFTER the largest US corporate scandal and bankruptcy ever (at the time).
The Dow Industrials and GDP quarterly data from 1970 to early 2000s: After the release of major negative GDP numbers, the market for the most part ROSE, just the opposite of what most market analysts and investors expect.
The Dow and profound political events over the last 80 years: In the 1930s and 1940s, a series of negative incidents -- i.e. Hitler rising to power, World War II, and the Holocaust -- preceded a powerful uptrend in stocks all the way into the 1960s.
Stock market charts of the five countries most affected by the 2004 Indian Ocean Tsunami (India, Indonesia, Malaysia, Sri Lanka, and Thailand). Four out of the five ROSE after the natural disaster...
Believe it or not, we've only scratched the surface. In his myth-busting, free video "Why Use the Wave Principle," Wayne Gorman presents a total of 40 charts that capture failed fundamental analysis of the world's leading financial markets. Wayne recalls this expression from a famous, Nobel Prize winning economist:
"Economic reasoning will be of no value in cases of uncertainty."
And he offers this response:
"But isn't that what we have in financial markets: cases of uncertainty? We need a different type of reasoning, one that will help us to avoid the pitfalls shown on the previous charts. That's why the Wave Principle is so important. It offers a unique perspective and a market discipline of rules and guidelines that help investors avoid buying at tops and liquidating at bottoms. It helps to explain and understand trends before they happen."
The flaw in Economic 101, cause-and-effect theory is one of the easiest things to prove. But it's also one of the hardest things for many investors to accept. Now is the time to do so. Watch the free "Why Use the Wave Principle" video in its entirety today at absolutely no cost. Simply sign on to join the rapidly expanding Club EWI and take advantage of the amazing educational benefits membership has to offer.
In part one of his exclusive, three-part Club EWI video series "Why Use The Wave Principle," Wayne first assesses the pitfalls of relying on macroeconomic models to forecast; namely: "An investor is lured into the market at just the worst time, when it's time to sell, and forced out just at the best time to buy."
As for real world examples of this happening, Wayne spans three hundred years of financial history to reveal how the most pivotal economic, political, and environmental events failed to alter the course of their respective markets. Here, the free video includes groundbreaking charts on these (and more) well known episodes:
The S&P 500 and Enron from 2000-2002: The stock market ROSE and continued to proceed upward AFTER the largest US corporate scandal and bankruptcy ever (at the time).
The Dow Industrials and GDP quarterly data from 1970 to early 2000s: After the release of major negative GDP numbers, the market for the most part ROSE, just the opposite of what most market analysts and investors expect.
The Dow and profound political events over the last 80 years: In the 1930s and 1940s, a series of negative incidents -- i.e. Hitler rising to power, World War II, and the Holocaust -- preceded a powerful uptrend in stocks all the way into the 1960s.
Stock market charts of the five countries most affected by the 2004 Indian Ocean Tsunami (India, Indonesia, Malaysia, Sri Lanka, and Thailand). Four out of the five ROSE after the natural disaster...
Believe it or not, we've only scratched the surface. In his myth-busting, free video "Why Use the Wave Principle," Wayne Gorman presents a total of 40 charts that capture failed fundamental analysis of the world's leading financial markets. Wayne recalls this expression from a famous, Nobel Prize winning economist:
"Economic reasoning will be of no value in cases of uncertainty."
And he offers this response:
"But isn't that what we have in financial markets: cases of uncertainty? We need a different type of reasoning, one that will help us to avoid the pitfalls shown on the previous charts. That's why the Wave Principle is so important. It offers a unique perspective and a market discipline of rules and guidelines that help investors avoid buying at tops and liquidating at bottoms. It helps to explain and understand trends before they happen."
The flaw in Economic 101, cause-and-effect theory is one of the easiest things to prove. But it's also one of the hardest things for many investors to accept. Now is the time to do so. Watch the free "Why Use the Wave Principle" video in its entirety today at absolutely no cost. Simply sign on to join the rapidly expanding Club EWI and take advantage of the amazing educational benefits membership has to offer.
Wednesday, March 3, 2010
No Drastic Change
Although the pair is pushing up higher than I anticipated, it still has the chareteristics of a flat/zigzag double correction. I think it is likely that the move could continue up as far as 1.5200 before resuming the short. Here is my current labeling (by the way, I know that the degrees labeling is not necessarly correct but that is a small issue. If you understand wave principal this should not a big deal)
Tuesday, March 2, 2010
Its not a triangle
So, the next likely scenario would be a double 3 correction. More specifically a flat to a zigzag. I think a good stopping area for this formation will be about 1.5080. And then I still expect it to make a new low.
Triangle Forming
Looks like a triangle is forming on the 34 min chart. This is consistent with my last post that there will be one more push short before wave .iii is finished on the daily chart. The movement will make a new low below 1.4780 and likely hit 1.4716. It is not possible to tell right now if the triangle is complete or if it has simply finished a complex c wave. Time will tell. Either it does not change the outlook. Once the move is finished I would expect a rapid retrace long to 1.5574. More on that once the low is in place.
Monday, March 1, 2010
Im Back
First a quick appology. I went on a getaway and that is why there have not been any updates. I'm back now and here is where I think we are. I think wave .iii on the daily chart is nearly over. The trend has been short since Aug 17th. I think the GBP will make one more new low before wave .iii ends. I think it may have the potential to go as low as 1.4716 before wave .iii is over. Once that is achieved I am looking for a prolonged sidesways movement that will retrace about 38% of the short move from Jan 19th. a daily chart is attached.
Sunday, February 21, 2010
Last push short
I think price will trace up to about 1.5510 and then below 1.5351 and perhaps as low as 1.5260. That is my trade for the night
Currently in correction
The Sterling is currently in a corrective pattern that will most likely be a flat or combination three. It looks like the a wave is complete or just about. Since a wave looks to be a three wave affair I expect the b wave to trace short to at least 1.5365 and perhaps as far as 1.5300 before turning long to make the c wave leg of the flat. The zone is indicated by the lines on the graph. I won't try to predict the end of c wave. Normally it would come back to about the terminus of a wave but we will just have to see if that plays out. Once that is over the short trend should resume (assuming it does not become a double corrective pattern) and a good target for the near term short to end would be about 1.5220 to 1.5180. After that zone is achieved, the Pound will go into a larger degree fourth wave corrective pattern. We will analyze that in detail once it has begun. The longer term trend remains predominatly short.
Friday, February 19, 2010
The "Prechter Point"
What is it? You should know because we are coming closer to it. Visit Elliott Wave International by cliking the banner and learn more about the scariest day of trading in recorded history. Its coming and subscribing to the Elliott Wave Theorist will prepare you.
Thursday, February 18, 2010
A little more short
I am expecting one more small push short before we go into the larger (iv) wave correction of wave .iii. Since wave (iii) is shorter than wave (i), wave (v) will be shorter than (iii). If this assesment is correct price will not go below 1.52??. I will update that number when I think wave (iv) is over. then the larger wave .iv correction will begin. More on that when we are there.
Bob Prechter Points Out The Many Signs Of Deflation
Yes, You Heard Us Right
February 18, 2010
By Nico Isaac
Everywhere you look, the mainstream financial experts are pinning on their "WIN 2" buttons in a show of solidarity against what they see as the number one threat to the U.S. economy: Whip Inflation Now.
There's just one problem: They're primed to fight the wrong enemy. Fact is, despite ten rate cuts by the Federal Reserve Board to record low levels plus $13 trillion (and counting) in government bailout money over the past three years -- the Demand For and Availability Of credit is plunging. Without a borrower or lender, the massive supply of debt LOSES value, bringing down every exposed investment like one long, toppling row of dominoes.
This is the condition known as Deflation.
And, in a special, expanded November 19, 2009 Elliott Wave Theorist, Bob Prechter uncovered more than a dozen "value depreciating" developments underway in the U.S. economy as the two main engines of credit expansion sputter: Banks and Consumers. Off the top of the Theorist's watch list are these "Continuing and Looming Deflationary Forces":
A riveting chart of Treasury Holdings as a Percentage of US Chartered Bank Assets since 1952 shows how "safe" bank deposits really are. In short: today's banks are about 95% invested in mortgages via the purchase of federal agency securities. Unlike Treasuries, IOU's with homes as collateral have "tremendous potential" to fall in dollar value.
Loan Availability to Small Businesses has fallen to the lowest level since the interest rate crises of 1980. In Bob Prechter's own words: "The means of debt repayment [via business growth] are evaporating, which implies further deflationary pressure within the banking system."
An all-inclusive close-up of the Number Of Banks Tightening Their Lending Standards since 1997 has this message to impart: Since peaking in October 2008, lending restrictions have soared, thereby significantly reducing the overall credit supply.
Both residential and commercial mortgages are plummeting as home/business owners walk away from their leases at an increasing rate.
The major sources of bank revenue -- consumer credit and state taxes -- are plunging as more people opt to pay DOWN their debt. Also, a compelling chart of leveraged buyouts since 1995 shows a third catalyst for the credit binge -- private equity -- on the decline.
All that is just the beginning. The November 2009 Elliott Wave Theorist includes 13 pages of commentary, riveting charts, and unparalleled insight that make it impossible to ignore the deflationary shift underway in the financial landscape. For that reason, we have compiled the most timely insights from the entire, two-part Theorist in a special article for Club EWI members. In our opinion, this bundle of exlusive Theorist excerpts are "the most important investment report you'll read in 2010."
Elliott Wave International's latest free report puts 2010 into perspective like no other. The Most Important Investment Report You'll Read in 2010 is a must-read for all independent-minded investors. The 13-page report is available for free download now. Learn more here.
February 18, 2010
By Nico Isaac
Everywhere you look, the mainstream financial experts are pinning on their "WIN 2" buttons in a show of solidarity against what they see as the number one threat to the U.S. economy: Whip Inflation Now.
There's just one problem: They're primed to fight the wrong enemy. Fact is, despite ten rate cuts by the Federal Reserve Board to record low levels plus $13 trillion (and counting) in government bailout money over the past three years -- the Demand For and Availability Of credit is plunging. Without a borrower or lender, the massive supply of debt LOSES value, bringing down every exposed investment like one long, toppling row of dominoes.
This is the condition known as Deflation.
And, in a special, expanded November 19, 2009 Elliott Wave Theorist, Bob Prechter uncovered more than a dozen "value depreciating" developments underway in the U.S. economy as the two main engines of credit expansion sputter: Banks and Consumers. Off the top of the Theorist's watch list are these "Continuing and Looming Deflationary Forces":
A riveting chart of Treasury Holdings as a Percentage of US Chartered Bank Assets since 1952 shows how "safe" bank deposits really are. In short: today's banks are about 95% invested in mortgages via the purchase of federal agency securities. Unlike Treasuries, IOU's with homes as collateral have "tremendous potential" to fall in dollar value.
Loan Availability to Small Businesses has fallen to the lowest level since the interest rate crises of 1980. In Bob Prechter's own words: "The means of debt repayment [via business growth] are evaporating, which implies further deflationary pressure within the banking system."
An all-inclusive close-up of the Number Of Banks Tightening Their Lending Standards since 1997 has this message to impart: Since peaking in October 2008, lending restrictions have soared, thereby significantly reducing the overall credit supply.
Both residential and commercial mortgages are plummeting as home/business owners walk away from their leases at an increasing rate.
The major sources of bank revenue -- consumer credit and state taxes -- are plunging as more people opt to pay DOWN their debt. Also, a compelling chart of leveraged buyouts since 1995 shows a third catalyst for the credit binge -- private equity -- on the decline.
All that is just the beginning. The November 2009 Elliott Wave Theorist includes 13 pages of commentary, riveting charts, and unparalleled insight that make it impossible to ignore the deflationary shift underway in the financial landscape. For that reason, we have compiled the most timely insights from the entire, two-part Theorist in a special article for Club EWI members. In our opinion, this bundle of exlusive Theorist excerpts are "the most important investment report you'll read in 2010."
Elliott Wave International's latest free report puts 2010 into perspective like no other. The Most Important Investment Report You'll Read in 2010 is a must-read for all independent-minded investors. The 13-page report is available for free download now. Learn more here.
More short
The correction is over and the v wave of the (iii) wave has begun. Looks like the first two waves are already complete and we should get two progressively shorter pushes short (if it is an ending diaganol). I am thinking the entire short move will end at 1.5411or just past that point. Once that is complete, I expect a larger (iv) wave correction. When over, there will be even more downside potential. Here is the currentl labeling of the short move. Keep in mind that price might make one more push long to just above 1.5674. If so that will end wave (ii) and the short will resume from there. Either way it should ultimately keep trending short.
Wednesday, February 17, 2010
Still Correcting !!!!!!
Wow! This correction is taking forever. Even though it did what I said it would do in my last post, I believe the GBP will make one more push long above 1.5814 before resuming the short. I have slightly modified the labeling from my last post. I believe the final component of the correction is an ending diagonal now. The push long should stop just short of the trend line and then resume the short. A break of 1.5626 to the short side before making the above new high would negate the current labeling. Either way the trend should move further short below 1.5533 eventually.
Tuesday, February 16, 2010
Potential labeling for Correction
Below is a potential labeling for the current corrective move. If this labeling turns out to be correct, I would expect to see one more push long before the short resumes.
Not a Triangle
Price broke out of a level that would have allowed for a triangle pattern. It is obviously a complex correction. At this time, the most likely scenario is a double three that will turn out as a Flat to a zigzag. We won't be able to know till it is over but the overriding trend is still short. Please keep in mind there is an Alt scenario that has bullish potential. I am keeping this as a lesser likely hood due to the dollar strength and weakness of the other dollar crossed pairs.
Nothing New
Market keeps going sideways. I will post the labeling when it is done. There will be one more push short before it moves into an even larger correction. I think the larger iv wave correction will likely be a deeper retrace that is quicker than this one.
Friday, February 12, 2010
Still correcting but is it a triangle now?
Well, I keep trying to call the correction over but the market keeps right on doing its own bidding. Neverless the movement seems to be developing into a triangle. If that turns out to be correct, there will only be one more 5 wave leg short before begining a larger degree iv wave correction. I think a likely stopping point for the final thrust out of the triangle will be 1.5453. If it breaks that point in a strong way then the short could continue down till meeting the trend line on the left. I will update the end point of wave .5 (currently 1.5453) depending on where wave (e) of the triangle actually ends up finishing.
Thursday, February 11, 2010
Robert Prechter on Herding and Markets' "Irony and Paradox"
To anyone new to socionomics, the stock market is saturated with paradox.
February 11, 2010
By Editorial Staff
The following is an excerpt from a classic issue of Robert Prechter's Elliott Wave Theorist. For a limited time, you can visit Elliott Wave International to download the rest of the 10-page issue free.
Market Herding
Have you ever watched a dog interact with its owner? The dog repeatedly looks at the owner, taking cues constantly. The owner is the leader, and the dog is a pack animal alert for every cue of what the owner wants it to do. Participants in the stock market are doing something similar. They constantly watch their fellows, alert for every clue of what they will do next. The difference is that there is no leader. The crowd is the perceived leader, but it comprises nothing but followers. When there is no leader to set the course, the herd cues only off itself, making the mood of the herd the only factor directing its actions.
Irony and Paradox
To anyone not versed in socionomics, everything the stock market does is saturated with paradox.
— When T-bills sported double-digit interest rates in 1979-1984, investors saw no reason to abandon their T-bills for stocks; when T-bill rates were low in the 2000s, investors saw no reason to put up with the “low yield” of T-bills and sought capital gains in stocks. The first period was the greatest stock-buying opportunity in two generations, and the second period was the greatest stock-selling opportunity ever.
— When long-term bonds yielded 15 percent in 1981, investors were afraid of Treasury bonds even though they were about to embark on the greatest bull market ever; in December 2008, when the Fed pledged to buy T-bonds, rising prices appeared so strongly guaranteed that the Daily Sentiment Index indicated a record 99 percent bulls, just before prices started to fall.
— When oil was $10.35 a barrel in 1998, no one made a case that the world was running out of black gold; but when it was 7-8 times more expensive, some three dozen books came out arguing that global oil production had peaked, a theme that convinced investors to begin buying oil futures…about a year before the price collapsed 78 percent.
— In the second half of the 1990s, the idea that stocks would always be the best investment “in the long run” became popular just as a long period of superior returns was coming to an ignoble end. A new study... shows that as of today the S&P has underperformed safe, boring Treasury bonds for the past 40 years, since 1969.
— Just when nearly everyone -- including world-famous investors -- finally panicked and conceded in February-March 2009 that the financial and economic worlds were in dire shape, the market turned around and shot upward in its fastest rally in 76 years.
And so on. The exogenous-cause model fools investors exquisitely. One reason is that rationalization follows upon mood change. Mood change comes first, and attempts at reasoning come afterward. Socionomists recognize that social mood is primary and has consequences in social action, so we never have to wrestle with paradox. This orientation does not mean that we are always right. It means only that we are not doomed to be chronically wrong.
To succeed in the market, you must learn initially to embrace irony and paradox, at least as humans are unconsciously wired to interpret things. Once you get used to the world of socionomic causality, the irony and paradox melt away, and everything makes perfect sense...
--------------------------------------------------------------------------------
Read the rest of this classic Elliott Wave Theorist issue now, free! You’ll get 10 pages of Bob Prechter's unique insights on:
Why Finance and Macroeconomics Are Not Subsets of Economics
How Correct Are Economists Who Forecast Macroeconomic Trends?
The “Beat the Market” Fallacy
Stock-Picking Geniuses or Just a Bull Market?
Index Funds and Diversification
Market Confidence vs. Certainty
Observations on Corporate Earnings
Why Being a Bear Doesn't Equal "Doom & Gloom"
More
Visit Elliott Wave International to download your free 10-page issue.
February 11, 2010
By Editorial Staff
The following is an excerpt from a classic issue of Robert Prechter's Elliott Wave Theorist. For a limited time, you can visit Elliott Wave International to download the rest of the 10-page issue free.
Market Herding
Have you ever watched a dog interact with its owner? The dog repeatedly looks at the owner, taking cues constantly. The owner is the leader, and the dog is a pack animal alert for every cue of what the owner wants it to do. Participants in the stock market are doing something similar. They constantly watch their fellows, alert for every clue of what they will do next. The difference is that there is no leader. The crowd is the perceived leader, but it comprises nothing but followers. When there is no leader to set the course, the herd cues only off itself, making the mood of the herd the only factor directing its actions.
Irony and Paradox
To anyone not versed in socionomics, everything the stock market does is saturated with paradox.
— When T-bills sported double-digit interest rates in 1979-1984, investors saw no reason to abandon their T-bills for stocks; when T-bill rates were low in the 2000s, investors saw no reason to put up with the “low yield” of T-bills and sought capital gains in stocks. The first period was the greatest stock-buying opportunity in two generations, and the second period was the greatest stock-selling opportunity ever.
— When long-term bonds yielded 15 percent in 1981, investors were afraid of Treasury bonds even though they were about to embark on the greatest bull market ever; in December 2008, when the Fed pledged to buy T-bonds, rising prices appeared so strongly guaranteed that the Daily Sentiment Index indicated a record 99 percent bulls, just before prices started to fall.
— When oil was $10.35 a barrel in 1998, no one made a case that the world was running out of black gold; but when it was 7-8 times more expensive, some three dozen books came out arguing that global oil production had peaked, a theme that convinced investors to begin buying oil futures…about a year before the price collapsed 78 percent.
— In the second half of the 1990s, the idea that stocks would always be the best investment “in the long run” became popular just as a long period of superior returns was coming to an ignoble end. A new study... shows that as of today the S&P has underperformed safe, boring Treasury bonds for the past 40 years, since 1969.
— Just when nearly everyone -- including world-famous investors -- finally panicked and conceded in February-March 2009 that the financial and economic worlds were in dire shape, the market turned around and shot upward in its fastest rally in 76 years.
And so on. The exogenous-cause model fools investors exquisitely. One reason is that rationalization follows upon mood change. Mood change comes first, and attempts at reasoning come afterward. Socionomists recognize that social mood is primary and has consequences in social action, so we never have to wrestle with paradox. This orientation does not mean that we are always right. It means only that we are not doomed to be chronically wrong.
To succeed in the market, you must learn initially to embrace irony and paradox, at least as humans are unconsciously wired to interpret things. Once you get used to the world of socionomic causality, the irony and paradox melt away, and everything makes perfect sense...
--------------------------------------------------------------------------------
Read the rest of this classic Elliott Wave Theorist issue now, free! You’ll get 10 pages of Bob Prechter's unique insights on:
Why Finance and Macroeconomics Are Not Subsets of Economics
How Correct Are Economists Who Forecast Macroeconomic Trends?
The “Beat the Market” Fallacy
Stock-Picking Geniuses or Just a Bull Market?
Index Funds and Diversification
Market Confidence vs. Certainty
Observations on Corporate Earnings
Why Being a Bear Doesn't Equal "Doom & Gloom"
More
Visit Elliott Wave International to download your free 10-page issue.
Still Correcting
In my last post I thought the correction was over. It clearly is not. Looks like the structure is morphing into a double flat. I fully expect the drop to achieve the 1.5380 level. The question is when will the drop begin. From the below chart you can see that we likely need another down up before we can call the five ways long complete to finish wave .4 . Wave .1 was 426 pips so I expect wave .5 to be close to the same. I believe the long retrace should end near 1.5800 and then drop to near 1.5380
Wednesday, February 10, 2010
Tuesday, February 9, 2010
Zigzag to Flat
That is what this corrective structure looks like. It began on 02/05/10 at 11:32 am and will probably finish tonight. I expect one more move long to the 1.5780 to 1.5820 zone. From there I expect it to move short to 1.5380. Once that zone is achieved, it is quite possible the movement could come all the way back to 1.5800. Only time will tell but I still very much favor short movements. Look to sell tops.
Monday, February 8, 2010
ALT Count
There is also a possibilty that the entire corrective movement is a double zigzag and now complete either way the trend is still short. A break of 1.5548 should confirm the correction is over
Long correction nearing an end?
The movement from Friday till now looks quite corrective. I think the probability that it is in the last bit of the (c) wave correction is likely. A stopping zone for the Sterling is 1.5659 to 1.5700. Once this is achieved, as long as it does not become more complex, the short should resume with a likely target at 1.5380
Sunday, February 7, 2010
Trade the short
The trend should remain short. With the strength the Dollar is showing, I think it would be foolish to try and call bottoms or to look for what would be normal retracment zones. Retracements are likely to be shallower than normal. I would look to sell tops. Once the GBP breaks through 1.5415 we should see even more strength to the short side.
Thursday, February 4, 2010
Forget the Daily Triangle
Well, the evidence is becoming overwhelming that the triangle formation, on the daily chart from Aug., I have been holding on to is not going to play out. It is better to admit an error than to continue to hold on to it. In that light, I believe the markings on the below chart are most likely accurate. I think we are completing a minute degree first wave. This means there is likely to be a retrace. With the strength that the dollar is displaying it is possible that the retrace won't be that deep perhaps only 38.2% of the move down from Nov 09. That point would be 1.6166. I really don't think it will be any deeper than 1.6437 which is a 61.8% retrace. At this point, I would fear long trades and only be looking for bottoms to take profit and retraces to get back in short. Once 1.5706 is breached there is not doubt that the short is on like Donkey Kong. Going forward over the next many months I would expect the GBP to approach Par.
Wednesday, February 3, 2010
Short Over?
I think the Sterling won't make it to the short side daily trend line. Between 1.5865 and 1.5880 will probably be the limit on the short before it moves long. Now, I expect it to trend long to the upper trend line on the daily chart which is currently at 1.6754. It may fall a bit short of that but will make that call when we get there.
Tuesday, February 2, 2010
One more short at least
Here is the scenario. If price breaks 1.5951 before it breaks 1.60064 it should trend short to at least 1.58640. Once again, for the daily chart triangle scenario to remain in tact price can not break 1.5706 to the short side. If price then moves decisively long after touching the trend line at 1.5855 to 1.5864. That will most likely signal the end of the c (circle) wave of the daily chart triangle. Price should then trend long to above 1.6600 to make the d (circle) wave. The d (circle) wave should take many days.
One more push short?
Well the pound hit my zone and then pushed long but it was a weak movement. The total long move looks corrective. This leads me to believe that it is going to push short one more time below 1.5849. As long as it stays above 1.57063 the triangle scenario will reman intact. A break of that point means the short is in force as a major trend. At this point we will just have to wait and see.
Monday, February 1, 2010
Quick Update
Based on the current movement, don't be surprised if the retrace is much shallower than I previously stated. Perhaps the max retrace point will be 1.5920. Either way I think the trend is long.
Triangle still working
Last night met my minimum expectation by hitting the trend line at 1.5884. The low did not violate the overall triangle hypothesis failure point. So we should now be working leg d (circle) of the triangle. The first 5 wave move long will be three connected zigzags labeled w, x, y, x, z that will complete (a). the first x wave is now moving short and might end somewhere near 1.5895 to 1.5880. Once that move is over I would expect it to move at least another 120 pips long to make the next leg labled y wave.
Sunday, January 31, 2010
Revision of last post
The aforementioned confirmation point is not correct. I believe the GBP will move long into the 1.6000 to 1.6020 zone and then move short to 1.5888 to complete wave c (circle) of the triangle. From there it has the potential to resume the next long leg that will be labled d (circle). Again, if it breaks 1.5706 before moving long the triangle formation is invalid and the short has begun in earnest.
Confirmation point
When the GBP breaks 1.6007 in he long direction, this should be solid confirmation that wave c (circle) of the triangle is over and long is the trend for the next 2-3 weeks that will probably terminate near 1.6700. and then move short again.
Revision of long term triangle analysis
In earlier analysis I had claimed that the triangle pattern that I believe has been developing since Aug 5th was complete. This was highly premature. Considering the movement to this point, if this is indeed a developing triangle, it has much further to go. As you can see in the chart below, I now think that leg c (circle) wave is not quite complete yet. It may complete at or below the trend line. The trend line crosses 1.5877 today. As you can see the c (circle) wave is more complex than a (circle) and b (circle) waves. If price goes below 1.57063 this would negate the triangle scenario and signal that the long term short trend is firmly in place. If not then I have drawn a likely completion of the triangle that will led to new recovery highs to approximately 1.7400 over the next several months. From that point the short trend should once again take strong hold.
Wednesday, January 27, 2010
Long should prevail tonight
I will post some more detailed chart anaylsis tomorrow. I am looking for the long trend to continue, likely to 1.6350. A break of 1.62081 should confirm this analysis
Tuesday, January 26, 2010
Should trend Predominatly long for days. Final Move!
Okay, This morning I am posting two charts. The first shows what I believe to be an (x) wave triangle that began on Aug 5th 2009 and completed Jan 22nd 2010. Triangles preceed the final actionary wave. The second chart shows the first and second waves after the triangle completion. I have labled them A and B (they may have to be changed to 1 and 2 later, only time will tell). If this is correct, over the next several days or even a couple of weeks, the Sterling should move long in 5 waves. This movement should take it close to 1.6700. Please keep in mind, because this is a post triangle movement, once it is complete, the long trend that began in Jan 2009 will end. Over the next year or more then trend in the GBP will become short.
Monday, January 25, 2010
Short then long
I think It is quite likely we will see a pull back to 1.6140 before it breaks long again to a new high.
Sunday, January 24, 2010
Trend is now long
The trend for the next couple of weeks at least should be long. When it is over I expect it will end somewhere near 1.6700. I will post a chart later today to make my case.
Friday, January 22, 2010
Expandig Diagonal. Last wave long
Last night worked out well. Triangles are so easy to trade. I love them. I have relabeled the chart i have posted before. I believe the structure that is developing since 12/30/09 is an expanding diagonal. If this interpretation is correct, this is the fifth leg and should be very easy to trade because expanding digonals ALWAYS end beyond the third wave. In this case the one marked wave .iii . This means the new long move should end beyond 1.64573 with and ending target of at least 1.6638 and probably stay within the upper trend line. The last part is not required, just the 1.6638 target.
Thursday, January 21, 2010
Triangle?
The GBP appears to be making a triangle on the 21 min chart. If this is correct it is going to pop long. Probably not very far, 20-40 pips, and then turn and run short to probably 1.6120 or there about. Once there I would expect it to turn hard in the long direction.
Short then long or just long?
Per the chart below, we have completed a double zigzag or are still in the process of a triple zigzag. A break above 1.62352 would likely confirm the short move was over. A break below 1.61335 would confirm the triple zigzag scenario. If the bottom resistance number is broken a likely stopping point would be 1.6020. Once one of these scenarios plays out I will project an upside stopping point.
GBP ???
Even though it did what I said it would last night, I am not convienced the short is over. It may still make one lower low before moving long. At this point in the movement, I can't really tell. I am going to take a wait and see attitude and when the picture clears up I will comment.
Wednesday, January 20, 2010
Still correcting short
Current move will retrace long to 1.6320 to 1.6340 zone and then resume short to approximately 1.6100. From there it will move long angain to new highs above 1.6457
Tuesday, January 19, 2010
In Wide corrective (iv) wave
We are in a corrective fourth wave that began at last nights high of 1.6407. Going forward the movement should pop above 1.6442 and then move short to about 1.6200. Once that happens we should see new highs in the GBP.
Monday, January 18, 2010
Trend still long
Here is a 240 min chart that shows a slight revision to some of the lableing of the last chart. I think we will see a pull back to about 1.6200 and then the GBP will continue on to make a new high. It is really not possible to know if this is the last push long or if it willl become more complex and go further long. I'll do my best to keep the count. My Alt count has a wave as i and b as ii with this current wave as iii.
Sunday, January 17, 2010
Big Picture
Okay, I thought I would give a bigger picture outlook for this chart. The Sterling made it to my retrace zone now it should move short. I think the short move will end in the 1.6210 to 1.6140 zone. It could run shorter than that (perhaps as far as 1.6080) but only time will tell. Once that move is over I think the trend long will resume per the chart below. From Aug 5th, 2009 till Dec 30, 2009 the Pound has traced out a three wave movement. That is corrective. I am going to lable it (X). Then it moved up in 3 waves that will be labled a wave and should befinishing b wave by tonight or tomorrow. From there it should move long in 5 waves to, most likely, above 1.6877 to finish to long movement that began Jan 23, 2009. The ensuing short move should then take the GBP to below 1.3500 and likely much lower.
Trend is Short
The current long move will end in the 1.6290 - 1.6308 zone. I favor the longer side at 1.6308 from there the short trend will reume. A likely stopping point for wave (iii) will be somewhere near 1.6100. I'll try and post a chart later today after the Chargers game is over. :)
Thursday, January 14, 2010
Just a bt further long
Check out the attached chart. The push long should go just a bit longer i think 1.6350 to 1.6400 is a likely stopping zone. I favor closer to 1.6400. Then the multi day short should resume.
New Short Confirmation Point
I have moved my strong confirmation point up to 1.6286. A break of this point short will signal a multi day new short trend.
Tringle Information
Please be aware that triangles always preceed the final actionary movement. So, if my triangle count is correct, there can not be a triple zigzag as noted in my last post. I just remembered that. So this should be the last push long
Wave .iv Extension
From a trading statndpont last night was frustrating. I didn't trade because I couldn't figure out the movement. From a technical sandpoint it was exciting. That was the first expanding triangle have called in real time and I was able to notice it quickly. I thought I would have a hard time with it and it was actually the first thought I had, as it was forming. That was satisfying. Anyway from the chart below you can see it is completing the Y leg of wave .iv. Now this could extend and become more complicated to make a Z leg tripple zigzag but there is no way to know. But a break of 1.6250 should eliminate this possibility. So when it breaks 1.6250 the short has resumed for perhaps as much as 600 pips.
Wednesday, January 13, 2010
Short Confirmation point change
Based on the last push long the GBP must now break 1.62453 to confirm the short movement.
Long Over?
I know it is still early in the evening but the movement looks quite weak and I think I have a count that shows it is over. A break of 1.62633 should be strong confirmation of the short movement resumption
A Bit Longer
We'll I have been looking at the movement long and hard. I believe the long move will end in the 1.6400 area and then begin trending short again.
Still Moving long
Well here is my current labeling. If this is correct there is definetly more upward potential. if wave .5 meets equality with wave .1 then we can expect it to move to 1.6480. This would give us approximatly a ratio of 1.38% of wave (c) relative to (a) which is quite within the normal range. Please be aware that I have an alternate count that has much more long potential. There is no way to know until it plays out. This is the labeling for now.
Tuesday, January 12, 2010
Latest and greatest
I keep counting the move but I'm also keeping in mind technicals even though it broke 1.6180 that does not signal a new strong long movement. I believe we are in the 5th of a 5th wave. The long correction is SOOOO close to being over. a break short of 1.61356 should be sufficient conformation of this outlook.
More upward potential?
After analyzing the corrective movement from 8 am PST this morning. I believe there is much more upward potential. Anywhere from 1.6300 to 1.6400. A break above 1.6180 would be solid confirmation of this outlook. If this happens I will post another chart with the labeling. If it doesn't happen then I wll stick with my original labeling on the last chart. If it does I will post a new chart
Off Track. Revised Count
Okay. the beauty of wave analysis is you can be right and be wrong all at the same time and still make money. I have been saying for some time that the trend is still basicly short. I thought it was making a triangle but the break of 1.6192 tells us it is not. So what happened. Easy (a) was actually 5 waves rather than 3. You can see this from the below chart. wave i was extended (something I have not seen before at that degree). If you measure it, it all works. wave iii is not the shortest. So i think the current labeling is correct and the long correction is very close to being finished. One more rise above 1.61936 and it should be finished. (how far is hard to say but I think it will stay under 1.6220 but we will just have to see) That will end wave {iv}. After that I am looking for equality with wave {i} which should take us close to 1.5600
Still On Track
Nothing has happenend to change my triangle scenario. I will update if something does.
Monday, January 11, 2010
Why You Should Care About DJIA Priced in Gold
January 11, 2010
By Vadim Pokhlebkin
The following article is provided courtesy of Elliott Wave International (EWI). For more insights that challenge conventional financial wisdom, download EWI’s free 118-page Independent Investor eBook.
-------------
Of the many forward looking market indicators we at EWI employ, one of the most interesting tools (and least discussed in the financial media) is the DJIA priced in gold -- "the real money," as EWI's president Robert Prechter calls it.
We've been tracking the Dow/Gold ratio for many years and it has serves our subscribers well. It's not a short-term timing tool, yet in the longer term, as our January 6 Short Term Update put it, "the nominal Dow eventually plays catch up to what is transpiring in the Dow/Gold ratio."
Here's a good example. Remember when the nominal DJIA hit its all-time high? October 2007, just above 14,000. At that time, most investors expected new highs still to come. But our Elliott Wave Financial Forecast warned five months prior, in May 2007:
One key reason [for a coming top in the DJIA] is the undeniable bear market status of the Dow Jones Industrial Average in terms of gold, the Real Dow...
Notice, by contrast, the relative strength of the Real Dow versus the nominal Dow, the index in terms of dollars, from 1980 to 1982. By August 1982 when the Dow denominated in dollars bottomed, the Real Dow was rising strongly from its 1980 low... The nominal Dow soon played catch-up, and they both rallied more or less in sync until 1999.
Now, instead of soaring the Real Dow is crashing relative to the nominal Dow. In fact, it’s barely off its low of May 2006. This dichotomy reveals the weakness that underlies the financial markets’ push higher. When mood turns and credit inflation reverses, the ensuing drop in the nominal value of the market should be dramatic.
"Dramatic drop" did indeed follow: Between October 2007 and March 2009, the DJIA lost 53%, high to low.
For more information, download Robert Prechter’s free Independent Investor eBook. The 118-page resource teaches investors to think independently by challenging conventional financial market assumptions.
--------------------------------------------------------------------------------
Vadim Pokhlebkin joined Robert Prechter's Elliott Wave International in 1998. A Moscow, Russia, native, Vadim has a Bachelor's in Business from Bryan College, where he got his first introduction to the ideas of free market and investors' irrational collective behavior. Vadim's articles focus on the application of the Wave Principle in real-time market trading, as well as on dispersing investment myths through understanding of what really drives people's collective investment decisions.
By Vadim Pokhlebkin
The following article is provided courtesy of Elliott Wave International (EWI). For more insights that challenge conventional financial wisdom, download EWI’s free 118-page Independent Investor eBook.
-------------
Of the many forward looking market indicators we at EWI employ, one of the most interesting tools (and least discussed in the financial media) is the DJIA priced in gold -- "the real money," as EWI's president Robert Prechter calls it.
We've been tracking the Dow/Gold ratio for many years and it has serves our subscribers well. It's not a short-term timing tool, yet in the longer term, as our January 6 Short Term Update put it, "the nominal Dow eventually plays catch up to what is transpiring in the Dow/Gold ratio."
Here's a good example. Remember when the nominal DJIA hit its all-time high? October 2007, just above 14,000. At that time, most investors expected new highs still to come. But our Elliott Wave Financial Forecast warned five months prior, in May 2007:
One key reason [for a coming top in the DJIA] is the undeniable bear market status of the Dow Jones Industrial Average in terms of gold, the Real Dow...
Notice, by contrast, the relative strength of the Real Dow versus the nominal Dow, the index in terms of dollars, from 1980 to 1982. By August 1982 when the Dow denominated in dollars bottomed, the Real Dow was rising strongly from its 1980 low... The nominal Dow soon played catch-up, and they both rallied more or less in sync until 1999.
Now, instead of soaring the Real Dow is crashing relative to the nominal Dow. In fact, it’s barely off its low of May 2006. This dichotomy reveals the weakness that underlies the financial markets’ push higher. When mood turns and credit inflation reverses, the ensuing drop in the nominal value of the market should be dramatic.
"Dramatic drop" did indeed follow: Between October 2007 and March 2009, the DJIA lost 53%, high to low.
For more information, download Robert Prechter’s free Independent Investor eBook. The 118-page resource teaches investors to think independently by challenging conventional financial market assumptions.
--------------------------------------------------------------------------------
Vadim Pokhlebkin joined Robert Prechter's Elliott Wave International in 1998. A Moscow, Russia, native, Vadim has a Bachelor's in Business from Bryan College, where he got his first introduction to the ideas of free market and investors' irrational collective behavior. Vadim's articles focus on the application of the Wave Principle in real-time market trading, as well as on dispersing investment myths through understanding of what really drives people's collective investment decisions.
Triangle?
I think I figured out why this correction is not meeting my expectations. It is making a traingle. If you look at a 4 hour chart begining on 12/30/09 at 04:00 you should be able to see this clearly. Although it has been frustrating to this point figuring it out, Im pretty sure that is what it is doing. The good new is that triangles are 100% accurate in their predictive capabilities. Once this thing finishes 5 waves ending in an E wave in the long direction it should make a final move short for perhaps as much as 600 pips before making a significant retrace long. If my triangle scenario is correct the current short move should stay above 1.5895 before moving long again and that long move should stay below 1.6192 to keep this scenario intact.
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