Recap of yesterday's observations, perhaps more relevant given Friday's recovery.
SPX has reached the lower BB in the monthly chart, and meaningfully rebounded on Friday. Keep an eye on the mid-band line which is at 2897 (Chart 1).
The structure since the ATH is likely an ABC or 123 (Chart 2 on ES and Chart 3 on SPX)
The low is likely to be retested if we have an ABC structure and breached if we have a 123 structure.
Part 2 - Long Term Observations
Chart 4 presents long term tracking counts on stocks (using DJIA) that I put together on Christmas 2015 (in the Long Term Outlook section of the side-panel).
I do not have time at the moment to label the current chart (Chart 5). However, since the labels in Chart 4 would remain in the same positions, one can easily pair the two charts.
Based on the original tracking counts, the ATH would be
[blue] Wave 1-up of wave (5)-up. This is the most bullish count at the moment, but 2-down may not be over.
However, if it is the entire wave (5)-up, this would be the most bearish count.
[green] Wave 3-up of (3)-up. This would be quite bearish.
[red] Wave d-up of (4)-down (expanded triangle)
or wave-b-up of (4)-down (expanded flat or triangle), need to have the red (3) coincide with the green [iii].
The red count is a bit stretched in light of how far the market has risen to its ATH , but not impossible.
An expanded triangle or an expanded flat would be the most bearish count as the 2009 low would be exceeded.
Short Term Charts
MTUs Chart 1 -
ReplyDeleteshow the big picture that this rout is only a small section of the chart from 2009 (but he is using log scale as there has been a 29% fall in the DJIA the past few weeks).
The main support level if the trend has turned down with be the horizontal red line on chart 1 (old 2000 & 2007 tops) but that is years away in all prob.
Chart 2 -
My question from yesterday still stands is this a a-b-c or a 5 down, and if wave 3 or C still in progress ?
What I can't see in the last wave down the past 10 days is a proper wave iii - or a wave ii - all we see for iii is downside overnight gap not of any large size rel to the neg waves lengths of i & v. Thats unusual because usually wave iii would the largest. But the smaller waves have been distorted for years so it may be just that again.
Chart 3 -
MTU's red [1] - [2] to me doesnt make sense and there is a missing wave 2 where the gap is 6 days ago but the size of the rally on the close would prima facie seem to indicate theres a distorted 5 down completed there as of Thurs or Friday. Other charts I have been concur with that view. Thats on a std orthodox obv past view, but if the mkt isnt in that mode watch out. MTU's red [3] may be a red 1 if the mkts still in a red [3] on my alt count of an extended wave 3 or C.
If an extended 3 or C is still unfolding then MTU's blue C & red [5] point would be wave i of that extended red [3] and the current rally on the close prob its wave ii. Timings structure of the past few days does fit this.
But overall and std view the odds tho favor a low for the moments been reached.
But what type of low ? Its still not clear whether the mkt is unfolding an a-b-c or is still in a 5 at wave 3. I do note tho that the DJIA waves 1 & 3 so far are of approx same length. I would ask MTU to comment is that normal for a wave 3 or C ?
Its pity I can't upload a chart unlike when this blog was in the other format yrs ago - MTU ought look into that.
The remainder of 2020 is going to be interesting to watch.
My mathematical forecasting curve predicted this slide around this time frame in the stks I follow when I revised it last Nov and it can give a good guide to what is to follow. And I also sold some trading positions yesterday with worth 100x what I paid for them (many of the others 50x - 70x). Im sure some of the red hot traders in US UK HK etc who see this MTU page have done even better than that the past few weeks. A friend who I manage safer trades for made 1000%. But this sort of move only happens ever 4-5 years generally.
But stay alert and cover you positions adequately in case something really big is unfolding here.
MTU can you give us the exact ATH numbers for the DJIA SPX NYA & MID as I cant seem to find where to get them for fib assessment.
ReplyDeleteAre those numbers anything significant in fib terms in your view ?
DJIA 29568.57 on 2/12/2020
DeleteSPX 3393.52 on 2/29/2020
NYA 14183.26 on 1/27/2020
MID 2109.43 on 2/20/2020
thanks for sharing and do share
MTU if the true EE count peak is the mid Jan peak, what are the peak ATH numbers to then for them (excluding NYA) and the dates ? Can you provide those too.
Delete(Interestingly the most readable index - NYA - shows a lower peak in Feb which is in line with both UKX and my view that the Feb peaks are in fact wave 2 ct rally of the neg 5 wave down I believe has run since mid Jan.)
Chart 5 Long Term Count
ReplyDeletePrechter says 1932 is supercycle wave 2 end.
Neely says its 1949 after a long consolidation wave 2 from 1835.
After thinking about this I believe wave 2 ends in 1942 (inbetween those years) because it fits better as an a-b-c from the 1929 top is required which 1932 doesnt fit nor does 1949. Also 3 years to 1932 isnt enough time for a wave 2.
There are the 2 possible main counts from 1942.
Wave 1 = 1966, 2 = 1974, 3 = 2000, 4 = 2009 & 5 = 2018 - 2020.
The price action and timing relativities fit well.
The alt count from 1942 is :
Wave 1 = 1966, 2 = 1982, 3 = 2007, 4 = 2009 & 5 = 2018 - 2020.
All of these counts have min req now for possible 5 wave completed in 2018 or 2020.
But there is nothing guaranteed especially if the wave structure is expanding.
Chart 5 Observations.
ReplyDeleteIn looking at the approx fib ratios from the 1942 low where it bottomed around DJIA 200 points (I dont know the exact number) wave 1 to 1966 ended at around 1000pts which gives around 500% gain.
Interestingly the low in 2009 where we might consider wave 5 started at 6470 pts saw a rise to 29568 in Jan 2020 which is 457% - almost the same rel gain. This is relevant because where wave 3 is much larger (multiple of 2000% & 1500% gain approx from 1974 or 1982 lows to 2000 wave 3 peak) EW rules say and past obv often show wave 1 & 5 will be about same length (the 500%).
Any thts on fib ratios of ATH numbers and moves MTU ?
Some interesting timing observations :-
ReplyDelete2 months ago I noted the mkt was 20 years from the 2000 DJIA top and has just past 90 years from the 1929 top. We've seen what happened since then the past few weeks.
Also the mkts started to tumble almost exactly 4 years from the 2016 Feb low.
But whats interesting on the 1929 count that apart from 90, 45 years from it saw the Dec 1974 major low.
I note that DAX and NIKKI today is almost back to the 2016 low and UKX has just slightly exceeded it. ASX has reached it. This is normally the weaker support level for wave A down or if this move is part of a a corrective wave 4 etc.. in a uptrend that will continue later.