The moon is in Retrograde....(sorry I'm kidding here)
Anatomy of an EWT pull back....(I know it's bullshit). This chart show the Macro pull back in Coach.
EWT says that Corrections show a 3 wave pattern, With Upmoves, roughly 50% of the way through the correction. "some would say that coach came down to it's Jan support, and is holding."
The red lines(yes Lines) show an ABC correction smaller Time Scale. The red lines make up the first Macro(cyclical) pull back(MACRO WAVE A), Which shows a Clear abc correction(but still in 5 waves).
The White Wave is the Macro B wave. (b waves Tend to not show ABC waves, and conform more to a 5 wave impulse)
The Blue Waves are a Developing Correction,
We can see a Clear A wave, and the Developing b wave(which we are now in). This should develop into a larger micro wave c correction.
The Developing micro B wave is part of a Macro C wave.
The upside move has a target of 32-29. And the downside break down, has a target of 20-15.
this does conform to a Broader market correction of 30-40% Which is that 9700 Target.
The financial Break down was 52% or so.... and there is a possibility that the market will correct to that level.... I would suggest that the Largest correction in the market should be in financials. so it may not represent the correction in the rest of the market.
BTW it only took 8 charts to find one that clearly fit my "reality"...(I'm sort of kidding, and yet not.).
That is a proper(Text book) wave form, but many stocks show that same form, and yet, it becomes very hard to read, and twice as hard to explain.....
An interesting Market sentiment indicator is that in wave "B" is that period of time the analysts come out and say "Valuations are good"
Sunday, July 20, 2008
Chart Astrology
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3 comments:
Great posts the last few days.
Dude, was that really Barry Ritholtz?!!! It didn't seem to me that you "trolled" so much as you engaged in a little hyperbole. Your explanation was very appropriate.
BTW, I was looking at the John Murphy link on sector rotation, and he says consumer staples, healthcare and utilities are the leaders at this point in the cycle.
Is AAPL really a technology bellwether? I would say it is more consumer discretionary, but that's me.
When Murphy posted that, it probably was(weeks ago). but look at the xlu now. It's lost leadership. And healthcare, has probably just started it's run.
, and maybe it is market leadership right now.... and maybe Until, financials can "Break out" it will outperform them, as could Transports.
"will there be a "dip buy" in the utilities?." maybe, maybe not.
It's probable that oil will catch a bid, at one point maybe $120 and then Financials, and transports will have a pull back.
It's possible, that oil could reverse, and make 150, or 200, and more pain for everything....but...
I posted a few things to B.R. about how it was great that "ibank coin, cramer, and Big picture were on the same side of the trade,and how that was an 11 sigma event" (that was the troll).
Cisco would probably be a better metric, but AAPL was a leader in the last technology run up.
But, discretionary and Tech, if you look at the chart (Save that sucker, it's my desktop right now) should cycle together. according to the chart.
Amusing that Financials have bottomed, the next great purchase will be consumer, and tech....
prep the shopping list for both.(but it's a few months away.
the reason I post that chart above every day, is because, it tells us what was strong and what was weak today. If you look at it every day, it gives you a sense of where we are in the cycle.
realize that Maybe in a week, financials will trade 22-20 range, Transports will outperform, Pharma/health care will outperform.
Tech and discretionary, will Under perform.
energy, could be a clear Sell.
Maybe this is clearer...
As, Brian shanon says, bottoming is a process.
Rotation is a Process, not an event. One day some stuff will be up, one day it will be other sectors..
the question is what will be Up the most, and what will be down the Least. some days energy will go up, some days consumer...
It's a rotation, and not Instant.
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