Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Time is running out for the Stock Market

Stock-Markets / Stock Markets 2011 Oct 22, 2011 - 12:45 PM GMT

By: Anthony_Cherniawski


Best Financial Markets Analysis ArticleThe is an interpretation of the Broadening Top formation by Edwards & Magee’s Technical Analysis of the Stock Market. The Elliott Wave analysis would give us a triple zig zag. Both interpretations suggest that this pattern is “buying time.”

The time element in this equation has to do with Triple Witching Friday. Today is when options, futures and options on futures all expire simultaneously. The house wants to see those October put options to expire worthless, which apparently they will. If there was a large decline, options sellers would have to “gamma hedge” their positions by selling shares of stock in an already thin market. The same goes for futures and options on futures.

But the formation is storing up energy for the decline that follows, which may be a crash. The average decline beneath the lower trendline of a Broadening Formation is 20%, giving us a target of approximately 956. This is similar to the pattern that prompted me to call for a crash in early May, 2010.

There are so many iterations of the Elliott Wave count that it is hard to keep track of them all. But, as they say, all roads lead to Rome. That is to say, there is no doubt now that we are finishing a Wave 2. The Fibonacci retracement is a little more than 50% in either count and the retracement from the October 4 low has been 17 calendar days, or 13 trading days, a completed cycle.

The completed cycle of the May 2010 flash crash took only 10 days from high to low. The probability of a repeat of that experience is better than 50% at this time.

Now, for the big picture. We can see Broadening formations at all degrees of trend in the equities indexes, including monthly.

Another analyst, who will remained unnamed, is calling for a Head & Shoulders neckline at the 666 low in the SPX. The target of a Head & Shoulders pattern at that level results in a negative number. That is the basis of my disagreement with his analysis.

A Broadening Formation at the monthly level, however, yields an average target of 460. There is yet another analysis of the Elliott Wave relationships which posits that the most common relationship in an A-B-C formation is that A = C, (or, A seeks equality with C). This suggests that the average target for (C) may also be at or near 460.

The $XEU (Euro) has run up against neckline resistance at 139.00 for the second time in a little over a week. Although the completed Head & Shoulders pattern failed to meet its downside target, Recent action has resulted in a second Head & Shoulders pattern that may result in a much more significant decline. Since there seems to be a rising correlation between the SPX and the XEU, I suggest that the XEU may also be preparing for a crash.

Have a great weekend!



Our Investment Advisor Registration is on the Web

We are in the process of updating our website at to have more information on our services. Log on and click on Advisor Registration to get more details.

If you are a client or wish to become one, please make an appointment to discuss our investment strategies by calling Connie or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at .

Anthony M. Cherniawski, President and CIO

As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

Anthony M. Cherniawski Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


24 Oct 11, 07:48
No crash coming......


The difference between May of this year and now, is night and day. Back in May....bullish sentiment among INVESTORS was running rampant. Thus, there were a lot of POTENTIAL SELLERS that had not yet sold. The "bull-to-bear ratio" was close to 3 to 1. Fast forward to today, and you have the opposite. The bull-to-bear ratio is about .8 to 1.0. The sellers HAVE ALREADY SOLD. is the buyers turn. Market will continue up from the October 4th bottom in this leg until we once again get too many buyers on board. But that is not likely to happen for a couple of months or more.

Post Comment

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

6 Critical Money Making Rules