by Chart School - October 16th, 2009 3:20 pm
Courtesy of Jesse’s Café Américain
Here is the chart we have been keeping through this decline and now into the bounce.
The bounce will end when it ends. It is a ‘false flag’ intended to spark a recovery in confidence and the economy. It is fueled by an enormous infusion of liquidity by the Treasury and Federal Reserve into a few favored banks, who are making the bulk of their newly found profits by trading.
The rally cannot be sustained without continuous printing of money. The difficulty with this tried and true monetary approach which has lifted the economy out of the last two bubble breaks is that the financial sector is closer to the heart of the credit bubble than tech or housing, which were just vehicles for the Ponzi scheme.
And the largesse is not being distributed evenly, as relative outsiders like Ken Lewis are finding out. "Not all animals are equal." And not all the pigs have purchased premier positions at the trough.
So, when will it end? On the charts, the area between 1060 and 1100 is likely, since it is in the area of a valid and confirmed neckline. But given the strength with which the SP has penetrated the prior resistance, one has to approach any forecast of an end to a rally like this with fear and trembling, and a generous portion of caution.
Still, our point is not to make a killing for the punters, but rather to help to illuminate the perfidy at the heart of the US financial system. It is truly amazing at how brazen it has become, especially under their token reformer.
The comments on this chart are those that had already been there. All that has been done is to update the chart from July, and to clean it up a bit for readability.
[click on chart for larger view]
Tags: S&P 500 chart, Stock Market, weekly chart
Posted in Chart School | No Comments »
by ilene - June 19th, 2009 11:59 pm
Courtesy of Corey at Afraid to Trade
Per multiple reader request, I’m providing the “bigger picture” backdrop against which to classify past and possibly future price structure in the S&P 500. Let’s take a look at one of the most mainstream Elliott Wave counts and projections on the S&P 500 Index (monthly).
(Click for Larger Chart)
Many Elliotticians agree that we completed a large-scale Third Wave into the 2000 highs and that we are now in a 10-year Fourth Wave correction phase that began off the 2000 highs.
This Fourth Wave will (has) subdivide into a three-wave corrective phase as all fourth waves do. Wave A was the move from 2000 – 2002; Wave B up was the bull market from 2003 – 2007. We are now structurally in Wave C down.
To step it into more detail, Wave C subdivides into a Five-Wave sub-structure (fractal). We have already moved four waves of that expected five wave structure.
Technically, the entire move from 2000 to present has been an “Expanded Flat” where Wave B made a nominal high and Wave C is expected (has already) made a new low beneath the “A” Wave.
That is the historical count in which we trade and invest currently. Wave C is much, much closer to its end than its beginning, but many Elliotticians agree that we have one more wave to the downside to finish-out the C wave before putting in a bottom and rallying off these levels – perhaps as low as 550 on the S&P 500 (an exact discussion on targeting is beyond the scope of this post).
With that being said, the rally from the March 2009 lows to present (if not even the November 2008 lows) has been a fractal Primary 4th Wave rally that targeted the 1,000 index level.
It now appears this rally is also coming to an end… if not has already ended already.
Whether or not we pop higher from here to challenge the 1,000 level, the future Elliott Wave pathway seems to call for one more swing down to test – at a minimum – the 666 lows from March (which would be a 5th wave truncation). I get the sense that most seem to believe we will be breaking these lows.
Any Elliott Wave posts I do will be based on this…
Tags: Elliott Wave Theory, S&P 500 chart
Posted in Phil's Favorites | No Comments »
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.