Thứ Tư, 8 tháng 8, 2012

BEARISH RISING WEDGE(S) - Nêm giảm giá đang tăng dần

Tuesday, August 7, 2012

Elliott Wave Update ~ 7 August 2012

I am bearish on the market long term even if 1422 SPX is breached to the upside.
First, we have a count of Minor 2 that sports a bearish rising wedge on lower volume.
Second, even if the market makes it above 1422 SPX for a new Primary [2] high, the market would actually be fulfilling an even larger rising bearish wedge.
In either case both patterns at the smaller Minor degree or at the larger Primary degree suggest dramatic price collapse is coming after the completion of the pattern.
If Minor 2 stays intact, the price collapse should take the S&P initially towards and then below 1300 SPX.
If the S&P manages a first higher high above 1422 SPX to create a new Primary wave [2] high, then a price collapse of epic proportions is possible.  In this case, a price collapse of the markets would take the S&P back toward 1000 SPX.

Should a new primary 2 take place, we could label it as such for simplicity's sake:
Or if you prefer, a triple zigzag with each zigzag getting progressively smaller and weaker:
No matter the short term gyrations, things look awfully beaish. If MINOR 2 tops prior to 1422 SPX, it may result in a price collapse due to the apparent pattern of a rising wedge.
If a NEW primary [2] high occurs, and even bigger price collapse is possible due to an even larger potential rising bearish wedge.
There are a lot of non-confirmations occurring between many indexes on low volume. 

Tuesday, August 7, 2012

Bullish pressure

The market continued to follow through by making a higher high today and I am expecting a bearish wave any moment now to reset some of the overbought conditions. However, since there is the possibility that we are on a Wave 3 and not the end of a Wave 5, the market could keep on rallying to challenge the 1422 year high before taking a breather. The market could technically get a lot more overbought so I am sticking to my strategy of staying long and closing my short hedges by the end of the day, which has resulted in couple of more months worth of starbucks coffee for me today :)

Fundamentally speaking, the market is usually ahead of the news so perhaps there will be a turn around from the negative news and we'll see again headlines of a "recovering" economy. And if we get relatively good news on economies around the world, the market will surpass its all time high regardless of what bearish count anyone thinks we are on.. mark my words. Stay with the trend!

Long Term Portfolio: 100% Long
Short Term Trading Strategy: Shorting intraday extremes, closing same day 

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