DOW update

INDU july 4 2014

Speaking of wedges, the DOW itself is displaying one that is almost as beautiful as the one on the CAC40. If there is a small triangle in the 4th wave position in this wedge, then it could be argued that one more minor leg would be required to complete the pattern, either with or without a slight throw-over. Again, as with the CAC the initial target would be the base of this structure, about 600 points lower. The charts below show how this wedge, always a 5th wave, fits in the big picture.

indu july 4 2014 mindu july 42014b

It would be the 5th wave of c of an a-b-c that is itself the larger B-wave. Interestingly, the low was at 6547 so the Dow has risen 10521 points so far or 160.7%. This is very close to an ideal Fibo number, which would suggest a top might occur at about 6547×2.618= 17140. That is only 66 points higher than yesterday’s high so this could be accomplished in less than a day. To read why this market might just be a little overvalued I recommend reading http://www.hussmanfunds.com/     ‘s latest article about delusions of the perpetual motion machine. Here is one person who does not quite agree with Janet Yellen’s view that this market is not overvalued!

DOW update

DOW  feb 4 2014

The DOW has dropped by slightly more than 1200 points, essentially erasing all those wonderful gains over the past 9 months. Most of that (95+%) was accomplished in the past ten or so days. I am using some of the novelties that are now available on StockCharts.com. First instead of the MACD I am using the POM, the price momentum oscillator, it is more reliable I have been told. Secondly there is now the option to add a thumbnail enlarged bit to the chart to explode the last little while.       We are not done yet in my opinion. 14500 would make much more sense as a 4th of prev. degree to complete wave 1 down, but short term the thing is a little oversold as measured by the RSI. Perhaps it is time for a 4th wave of 1.  We do not suggest trading the counter trend waves, they could be very short and fast.

Russell 2000 and Dow, update

RUT dec 6 2013DJIA dec 6 2013

A month or so ago we called for a top at around 1150 on the Russell 2000, not including a very common throw-over. We are there today and, in the mean time the Dow has managed to catch up with the pattern. The patterns are obviously not the same in EW terms and it is beyond my pay-scale to determine if this is one big expanding triangle (as with the Russell) or a series of 4-5s as with the DOW or , alternatively, a complex A followed by a B. In any event it is not the Jaws of something, which, like the serpent in Loch Ness (yes I was there) does not exist. Regardless these are not pretty patterns as the next big move should be down. The FTSE with its initial 5 waves down back in May/June (not shown), has still not negated itself and remains bearish.

DOW and DAX update

dow 19 dec 2012dax dec 19 2012

So, so far no banana, but as we pointed out earlier, this market will do anything to push the stocks up. This time it is Japan promising more stimulus , Greece  buying back debt at 31 cents on the dollar, Germany having its confidence factor that reached a 2 1/2 year low suddenly charging the other way and the fiscal cliff fatiguing everybody.

The Dow is hitting the lower line and perhaps had not yet completed the a-b-c as the c lacked the 5th wave. The Dax similarly is right up there completing its C wave. Stay tuned.