GLD is now within a point or two of a perfect a-b-c, time to get reverse? See HGD.
Month: February 2012
Dow Jones, again.
On closer inspection, I got the number wrong. It should be 12876 (2 May, 2011) and the high today is 12869.95 so there are still 6 ticks to spare. Should the scenario be negated, then it is worth keeping in mind that this is occurring on the Dow only (at least among major indexes) so the scenario would still be intact. Also the Dow might be the most watched but it is also the most easily manipulated (see previous blog on CAT), simple because just 3 or 4 stocks have a disproportionate effect on the Dow.
Dow Jones Industrials
At this morning’s high the Dow was within 16 ticks of the 2011 spring high. If that happens it would negate the most plausible count that underlies the immediate bearish scenario. What will take its place remains to be seen. We will cross that bridge when it happens. The number is 12841 intraday, see previous blogs.
Nice to know; the average holding period for a stock in the US?? 22 seconds!
DOW, Dow Chemical
As the Dow Jones looks like it may break through a critical level today on the job numbers, that other Dow still supports the big picture outlook. Here are the charts;
The pattern is essentially the same as that of hundreds of other stocks, a first wave down (A) followed by a very clear B-wave up and now the C. Wave 1 down and an a-b-c up are now pretty well complete, see detail below.
Anything is possible so this leg up could still develop into something bigger and higher but going by the present evidence this would be highly unlikely. Both the 5 waves down of wave 1 and the a-b-c up are unmistakable. Also this fits the bigger charts perfectly. The rebound has been a little over 62% and very close to where c=a. The RSI is at nose-bleed levels and deteriorating AND the MACD is in a similar position. The 5th minor wave of c may be a wedge with perhaps another dollar to the upside but that should be about it.
Fundamentally the stock is expensive at close to 14X p/e, but a yield of 2.8% still compares well to that of 10-year govies. But who cares. This stock is about to dive back down.