Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market $SPX, $VIX, and the Elliott Wave Terminal Diagonal Analysis

Stock-Markets / Stock Markets 2010 Sep 13, 2010 - 03:28 AM GMT

By: JD_Rosendahl

Stock-Markets

Diamond Rated - Best Financial Markets Analysis ArticleThis weekend I'm going to highlight one of the potential stock market patterns. First let's look at the market with a possible Elliott Wave Wedge forming in the wave B position.

$SPX: We have (abc) down into wave A, and we are forming what looks like (abcde) sideways into what looks like wave B. If this is the case, we could have a little more upside splashing above the 200 day MA and closing a little gap at price resistance. Then, we should expect wave C lower if the structure holds this view. The price target in this view is roughly 930.


S&P500

$VIX: If we switch our view to the volatility index we see a declining wedge formation with what looks like another test of the support line coming soon. We should expect this to occur if the $SPX is going to test resistance. The MACD might be forming it's own inverse head and shoulders pattern while price is forming a wedge.

Volatility Index

The Risk Chart: One of my favorite charts is the Risk Chart or $SPX/$VIX. It simply prices the market in terms of risk. Periodically, it gives off great signals and it was instrumental in late 2007 in helping us moving completely out of the stock market and to the short side. It's one of two technical reasons my parent's net worth went up in 2008.

Below we see the Risk Chart forming what might be an Elliott Wave Terminal Diagonal pattern. The obvious conclusion is if the stock market tests resistance of the wedge and the $VIX tests the support line then the Risk Chart should push right into the top of the wedge formation and test what is significant price trend resistance. What it does at that juncture could be very important. My potential turn days for that are Sept 16th and 28th based on a Fibonacci count from the recent market low. I like the end of September.

SPX:VIX

Note: This not something I'm trading at this point, but rather something we should keep our eyes on for the time being. With the various potential bullish and bearish wave counts this could easily turn out to be an exercise of theory.

IBM: The stock consolidates right on the 50 and 200 day MAs and pushes higher today. A move above this level adds to the bullish view and the next target is the upper Bollinger Band. I think it moves higher to help push the market towards resistance.

IBM

JNK: Still grinding higher as market participants reach for yield which is also a bullish market indicator for the time being. We have a little more room on the RSI. I like the idea of a weak test of the 70 level.

JNK

XLF: Starting to look weak with poor volume, but I still think it strikes the 200 day MA and potentially price resistance. If the market is going to fail at resistance and roll over, this will fail also.

XLF

$COMPQ:This has similarities to the XLF. I expect a test of the 200 day MA and the trend resistance line. If the stock market view above is going to happen this should fail at or slightly above the downtrend line.

NASDAQ

$USB: The bond market has rolled over. While we have no divergences, the RSI and MACD are clearly heading lower and supporting further declines in price. If the stock market is headed higher near term to resistance we should expect the bond market to slide lower. The bond market will have to trade back above the trend line to negate that view.

30-Year US Treasury Bond

GLD: Tried to rally early Friday but failed. The chart still looks near term bearish. I think we test the lower Bollinger Band and the 50 day MA soon. There still exists the chance of a little push higher, but that's not my primary view. MACD is right there to cross and head lower to support price moving lower.

SPDR Gold Trust Shares

AAPL: I suggested Thursday that AAPL was testing resistance and that was a natural place to stall. We got a little of that Friday.

Apple

PCLN: Still holding its uptrend line but it's starting to look a little tired.

Priceline

From My Trading Desk: For my recent trading ideas, please visit www.roseysoutlook@blogspot.com

Hope all is well.

By J.D. Rosendahl

www.roseysoutlook.blogspot.com

J.D. Rosendahl was a former stock broker/investment consultant (currently not licensed) before becoming a Commercial Banker for the past 14 years. He manages his family's wealth, helping them avoid the high tech bubble and the real estate bubble melt downs and preserving wealth.

© 2010 Copyright J.D. Rosendahl - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Orvin Five
15 Sep 10, 14:14
Elliott Waves only a labeling device

The fact that you can look at a chart and put labels (1,2,3,4,5, A,B,C, etc.) on prior movements tells you nothing about future movements. It's just taxonomy.

See http://orvinfive.blogspot.com for a logical explanation of why Elliott Wave theory cannot be valid.


Ether
18 Sep 10, 10:12
Elliott waves only a labelling device

If you believe putting labels on charts is taxonomy, then you shouldn't look at charts. All charts are shapes and lines.The labels vary, from Trendlines, to moving averages to wave counts. They represent different analytical systems, all with positive and negative characteristics. Either you can use charts, or you can't. How you use them is a detail after the event, if you use them successfully. If you feel elliott waves aren't useful for you, then don't use them.

But there are many who disagree with you, search the net and you'll find the places where they meet and communicate.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in