Analyze This

In Elliott Wave Theory and elsewhere, after the terminal pivot and a new first primary wave is in, the corrective 2nd wave is characterized by a deep retrace, with the consensus opinion being that the former trend is reasserting itself. Not.  Right now the Dow is indicating that we are in a "suckers rally" by putting in a lower low (though other indices are still stronger looking). Note the "b" wave lower low, with an abc subwave structure, suggesting it is all part of a larger corrective move to be labeled eventually a 2 . Will have to wait and see how the other indices resolve the move but it is highly unlikely to be as an explosive new high. Sell the friggin rally.

Stocks have reached a measured target for the completion of the wedge or diagonal triangle 5th wave (pls see previous post).  I wrote about the significance of the price point we surpassed Tuesday in the Nov. 9, 2014 post, Greatest Bull Market in History - Almost! stating,   "The SP 500 will have gained as much from the lows of 2009, as it did form the lows of 1975 to the highs of 2000, or 1465 pts, when it reaches 2131." The SP500 has achieved the greatest uninterrupted bull run in history by 2 points! Note the deterioration in the strength of the move below. Weekly  click to enlarge Where do you decide to get out of long term core equities? Do you wait for a a greater than 10% move down? That 's not an uncommon number but its a long way down from here. Weekly   click to enlarge That 10% pull back would of course put the market at new lows for the year.  Daily    click to enlarge The earliest confirmation that I will use for the end of

And so the final leg of the 5th wave of the diagonal triangle equities have been climbing, is underway and the high probability termination point is 2136 to 2145.  Daily  click to enlarge The 3rd wave is 53% of the 1st wave, and if the 5th wave is similarly 50% of 3 it targets 2139. The rally up from 4, an "a" carried 54 points, so c=a at 2135.  Pls see previous posts April 4, April 30,  May4.

The recent sharp rally of nearly 50% has achieved measured targets AND is now encountering a seasonal drag from the products. The cracks are wide, and of course there is no lack of supply. In fact supply is breaking records every week. Great report by Howard Weil on refining fundamentals as of May 6 here . Seasonal trends in gasoline are very regular and prices on average top out in May. Unleaded Daily click to enlarge Note the RSI negative divergence and trendline test. On the June contract its a c=a; Heating Oil not very different on the charts; c=a the common corrective targeting measure. Weekly  click to enlarge Daily The last leg up on the WTI chart does not count easily. There is no clear 5 wave count in the structure; too many overlaps of wave 1, and 3rd waves that are too small. There is little in the way of fibonacci relationships between the sub waves. We are left with a possiblity of a triple abc x structure. That could change with anothe

A plausible Elliott Wave count on the Shanghai Comp;  Weekly click to enlarge  as might be expected, it's looking a little overcooked.  How close to crisp is it in the short term?  click to enlarge This is the most negative possible wave count I could come up with. It is not unusual to have an extension show up in the 5th wave position as it is consistent with speculative frenzy. It is possible it is a 3 however, and there will be a series of higher  highs to complete the count up, but given the RSI negative divergence and MACD, it's very likely most of the way there. Todays  4% drop is not what momo players want to see. Note the daily chart above is not updated to include today. Real support is a long way down at 3050, and I would imagine short term, the bulls need it to stay north of 4000. Why do we care? China craps out crude craps out.

Looks like we are waiting for another iteration of the abc wedging structure to complete itself. If the   collapse to follow wasn't going to be so catastrophic you could fall asleep here. Kinda of like watching the mouse run over the sleeping lions nose. Get outside and go for a run ... click to enlarge  The above is my current count on the wedge with a target zone for the final abc up to complete the diagonal fifth wave. The .618 of wave 1 added to wave 2 targets 2144 and .382 of 1 thru 3 added to last weeks low produces 2147. Of course, even 2125 would do it, or it could even fail immediately, though that is less likely.  Breathe.