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Tuesday, March 30, 2010

Tuesday updates

Stock Market Predictions for 2010 and Beyond:
Why Is the U.S. Stock Market so Unpredictable?

I ran across this today on the Internet and listened to it and thought is was worthy enough to past on. It is a fifteen minute interview with Glenn Neely about the predictability of the wave patterns in the last ten years and why so many EWers have been having problems correctly forecasting with any accuracy over the last year. The bad news might be that this forecasting problem could continue for another three to four years before things change for the better.
(For the record, I have no affiliation with Neo-wave)

After the close, Wow, the eleventh day of this corrective mess, but now things are starting to make a little sense with a triangle almost completed to finish off the 4th wave. The trend remains up as triangles never occur near the beginnings of a waves, ruling out that a sell-off is already in progress. Triangles normally occur only near the end, and mostly in the 4th wave position.
Breadth for the day was a whooping 1.06:1, advancers as the Bollinger bands contunied to tighten in this consolidation phase of the rally from 1044.50. Upside targets are in the 1200-1225 levels, with the Fib fans, upper trendline resistance, and the 61% retracement from the '07 high all supporting a run to this level.
Levels that would start making this uptrend in danger of continuing would be 1161.48 (minor low). And at 1152.88 (major low) the trend would mostly become down as breaking below this would be making a lower low, and would most likely signal that the up count for the rally has been completed or the 5th wave truncated.

Click here for a live, and updated chart!!!
10:16, The Bollinger bands are closing in on the SPX, in what looks like a triangle nearing its final stages, hopefully if the count is correct, this will break to the upside for the start of the 5th wave.

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The Gray Fib fan continues to be heavily respected by the price action of the SPX, and has been acting as resistance, although the SPX has able to advance, it is doing so at a very slow pace just crawling along.
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6:56, The SPX might have a new channel forming, the gray dashed lines are parallel. I have the most likely count labeled in color, the gray labels are only an option that does not seem very likely because the sell-off is corrective looking instead of impulsive.
Click here for an updated real time chart!!!
Still no bearish Fib fans present.

1 comment:

  1. What a great point about the predictive power of EW. I feel it comes to light most obviously when trying to plot a corrective wave. You can see it just watching the blogs. Right after a significant turn, lots of counts come out. Many turn out to be wrong, and as the correction drags on confusion sets in as to what was a second wave versus a b wave versus an x. I like to think of it in terms of pluripotentiality - the ability of the wave to morph into many different patterns. Impulses have a more straightforward pattern, but corrections are another story.