DanV
Short

SP500 Bearish Outlook - Close to forming Generational Top

INDEX:SPX   S&P 500 Index
Like most of the major equities Indices are in very bullish mode since 2009 low and it seems nothing could go wrong. All the "Fundamentals" point to many profitable years ahead.

In fact I have hear a presentation from notable commentator suggesting 2009 will is a generational low ie will not be revisited ever in his life time. I think he is in his fifties.
He has shown many charts in his presentation boasting over 30 years of real life experience in the technical analysis of financial markets. Therefore many stock that are languishing at 50% of the retracement of the 2000 high to 2009 low are heading to retest their all times high.

If he is correct about these retesting their all time high, then I think they are running short of time.

From my chart you can see that we are only couple of months away fro forming truly forming a generational "TOP" that really is unlikely to be retested for more than generation. In fact we might spend another 15 years or so cascading down before forming a lasting low at a level likely below 2009 low.

So the wind will change may be by Early Sept to late October with SP500             hitting 2000 zone and could spike into 2030 area.

Could the end of Tapering and prospect of rising interest rate be the catalyst? I wonder.

Likewise could Gold             bottom by then? Check out my published chart
GOLD Is Unloved - Could this lead to a capitulation?


Well for the trader this could be an opportunity of a life time.

As always, this is my interpretation of the price action. Be sure to do your own analysis before planning a trade.
DanV MOD
2 years ago
A close up look
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mkdeep04 DanV
2 years ago
it interesting move sp500 done.. now all eye on retracement up..Q is 3wave down wave A .. if we r in wave B or r we eyeing wxy .. if so we can not ruleout new top.. let c.. also abc or wxy is wave 4? as few analysis r stating... DAN good chart
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DanV MOD mkdeep04
2 years ago
Thanks for your comment. Though it could also be just a start of impulsive move or the down side with the current bounce late last week as wave 4 and then wave 5 to follow. If so it would give us complete 5 wave decline making it is either larger wave A or Wave 1. So a further weakness could not be rules out and if does follow the uptrend would be broken and more clearly visible. Let see how it unfolds.
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doTheBounce
2 years ago
Why do you put in November 2011 and not in April 2009 ?
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doTheBounce doTheBounce
2 years ago
Why do you put in November 2011 and not in April 2009 ?
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doTheBounce doTheBounce
2 years ago
Why do you put -- in November 2011 and not in April 2009 ?

sorry for multi reply but -- disappear
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doTheBounce doTheBounce
2 years ago
4 in bracket

(fuck)
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ShortThePlanet doTheBounce
2 years ago
lol
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DanV MOD doTheBounce
2 years ago
Thanks for your question. Many analyst are struggling with this. However, having looked at DAX, FTSE100 DOW Ind , Dow Transport, Nikkie and correlation between them I fell that the entire price action in these market since 2000 top to 2011 low ia a contracting triangle clearer on some than others is ideally suite to to being larger degree wave 4. Once we get that in then all the subsequent price action in impulsive 5 waves in very narrow rising wedge makes perfect sense from Elliotwave Analysis perspective. Hoe this helps.
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Muwa
2 years ago
What makes you think the decline will last that long? Even the 1929 collapse lasted a mere 3 years for the low to form. Are you expecting the bear trend to be like the Japanese one?
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DanV MOD Muwa
2 years ago
Yes. The market that will be correcting is the entire cycle that stated in 1929 with 2000 making the larger degree wave 3 and now we are making wave 5 top. So nearly 84 year market rise will correct and even if it only last 23.6% in time it would be in the region of 22 year. It it last 38.2% of the time then we are talking nearly 32 year, so not out of the real of possibilities.
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ShortThePlanet Muwa
2 years ago
That's because we are about to finish a major supercycle, and the 1929 collapse was an internal correction of this cycle. So I would expect something more ugly than the 1929 collapse. Moreover, some analysis of history from ages ago tells me that this decline will probably be just a part of a higher-level correction (which could last about 120 years).
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DanV MOD ShortThePlanet
2 years ago
Ouoooch. Agree with you for higher degree of correction but even I would dare consider 120 years, that would result in human civilization ending as we know it. Hmm hard to comprehend. LOL
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ShortThePlanet DanV
2 years ago
No, the same periods were already existed in history. We are still alive, so don't worry :D
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DanV MOD ShortThePlanet
2 years ago
Hehehe. I know. But can you imagine 120 of correction. Every economical models used by governments, money managers and baking which had to be bailed out by many countries would prove utterly hopeless and human misery that would cause. What cost in decimation of wealth and such would have. So in that sense I say human society as we know it would disappear. Not sure what will come out on the other end. Well most of use will never survive to see that. But not impossible
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ShortThePlanet DanV
2 years ago
I can say for sure that we should not live in USA/Europe/Russia during this mess.
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ShortThePlanet ShortThePlanet
2 years ago
because this type of a correction (even if it lasts 30 years, not 120) could mean not only economical troubles, it could mean major civil wars.
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ShortThePlanet ShortThePlanet
2 years ago
*world wars
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DanV MOD ShortThePlanet
2 years ago
Such bear market would indeed foster very negative moods that then is expressed in such things as you mention for sure. In terms of where these would be more dominant and where it would be safe is a question I have never asked and would really struggle to answer that. Don't know enough in that area really.
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Muwa DanV
2 years ago
Do you think this long bear market will be global? Or will there be pockets of bullishness?
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DanV MOD Muwa
2 years ago
Global with only some sectors or regions escaping the worst and may be still fining some bullish progression. Medical Technologies, securities both electronic and internet securities management services would do well. Basic consumers retail could just plod along. Something along that. But again not spent enough time nor have the knowledge to examine that in details.
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SS96 PRO
2 years ago
My question to you sir - How successful were you at trading 2000 and 2007 market tops?
Did you capitalize on those once in a lifetime opportunities?
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DanV MOD SS96
2 years ago
Thanks for your question. 2000 top I exited my 100% equity portfolio by March 2000. Regarding 2007 I was keenly expecting but unfortunately was not able to take advantage as I was caring full time or both my aged parents from 2004 and had used up my savings and did not wish to take risk with the remaining balance due to unknown factor of how long my caring duties would last. However, this time round I am fully prepared and intend to take advantage by use of long term out of the money PUT Options and bearish spread Puts. Hope this answers your qustion
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gb3cker
2 years ago
Since this post is agreed on by the most of the user and not only for the day but ever, this must be a good time to stay long. Yes market is over extended but it is continue to make higher highs and and higher lows and until market breaks shorting this market is silly.
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DanV MOD gb3cker
2 years ago
Yes, agree with your reasoning on HH and HL so still an uptrend. No suggestion of shorting this right now in any of my comments nor do I think others who agree are implying that. The objective of this chart is to anticipate possible area where price action could also begin to confirm that the uptrend could be coming to an end and in that context start planning for short. So nothing to suggest that shorting point is now at current level. Thanks for your comment.
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gb3cker DanV
2 years ago
One good indication of market turning is to whatch spy/gold ratio below 2 12 month moving average.
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Muwa gb3cker
2 years ago
Indeed, there are no bearish longer term confirmations (like weekly EMA cross etc). This fed pumped bubble can stay irrational for a long time.
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DanV MOD
2 years ago
Almost a week since publishing this chart. Whilst, there are many fundamental arguments for the market to continue higher which you all know well, I am asking of 2000 is the barrier proving to be the major top. As an update on the chart I have zoomed in enough to give you a look at the entire last wave up, but still show the internal counts in details and it seem to me we have possibly complete final 5 waves of this rally which mean we should or have already started the anticipated decline which should provide additional evidence as it unfolds. Here is the chart.
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dionvuletich DanV
2 years ago
I agree with your analysis but am not sure the first decline will be shallow... 2000 and 2007 had sharp drops followed by sharp rises possibly to make a new high (divergent) do you agree with the idea that this is possibly still a large expanded B wave in a long term 3 or double 3 pattern - similar to 1970's secular bear market (we are definitely in a secular bear market since 2000 - fed tinkered bear market, but still a bear market) I am already preparing to short and short nasdaq right now and dax...
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DanV MOD dionvuletich
2 years ago
Well like many I had been viewing this as possible wave B from 2007 and in some correlated charts that might still be the case. However, as I was preparing to publish the above chart, I had examined FTSE100 (UK Index), DAX, SP500, DJI, Dow Transport and few others. I am of the opinion that wave B likely hood at least in nominal term is now far stretched and would be called into question if we have any more upside. Therefore, my conclusion is that we have Sept 2011 as low for triangle wave 4 and since then it shows perfect wave 5 consisting of rising wedge 3-3-3-3-3 and which is very close to or has completed. SP500 touching 2000 I think is the prime example of major top at round number with all counts almost complete at several Fib projections and extensions. So whilst sharp leg down as you describe is not completely out of question but I think we are more likely to have larger abc zigzag down at leat to retest 20019 low or make lower low. Hope this helps.
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dionvuletich DanV
2 years ago
Yes, I agree... the SP500 looks like it just completed a 5th wave ending diagonal in my view with a throw-over to boot - which makes it even better... I am looking to short that as well... on a rally...
I am not an elliott guy - and only understand the basics (up to flats, 3's triple 3's etc) and I don't use elliott wave for trading... so excuse my bad terminology but I guess the question is from a longer term perspective, do you think we are in the end of a wave three or a the end of a wave B?
I believe the rally from 2009 looks corrective, due to deep pullbacks, low volume and lack of fundamental support (conflicting data) and suspect the rally is the end point of a Wave B flat or expanding triangle similar to 1973 on a log chart that will lead to either a longer term double or triple tree with a triple 3 triangle more likely... till we get rid of excesses and let the market normalise?
My trades are not looking for gigantic targets right now and only back to channel supports, but if it drops hard and rallies to new highs I will be scouring to look for open ended profit targets to the downside and building a longer term short position

If it goes lower than 2009 I would be a very happy camper... =)

btw ftse is at long term resistance in giant triangle (quarterly chart)
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dionvuletich dionvuletich
2 years ago
btw I am struggling with your vie re the 2011 low being the low of a triangle..? first time I have heard of it being used in that manner... from what I can see the 2011 high to low is an A-B or 1-2..?? can you explain? (purely out of interest)
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DanV MOD dionvuletich
2 years ago
In wave 4, Wave B or Wave "X" you can have what is know as contracting triangle with each swing made up of 3 minor swings known as 3-3-3-3-3. So this would assume that 2000 top was larger degree wave 3 and then abcde triangle having low in 2011 from when the final 5th leg commenced. This is coincidently a rising wedge in many indices some very clear ans in others not so but nevertheless noticeable. Hope this helps.
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dionvuletich DanV
2 years ago
I agree, that is possible... I would think a rising wedge on a quarterly chart scale is very unlikely, (although i just traded one 8hrs ago on euraud) with other analysis tools...
FTSE is the only long term chart I think fits a contracting triangle formation reasonably well, I believe it would be a stretch to call them ending diagonals/ contracting wedge - whatever it is termed... just yet, on teh DOW it is a near perfect Expanding triangle from 2000, on the SP500 it appears to be extended, but still looks like a 3 wave advance so far which is either corrective or impulsive and the Nasdaq is forming a bearish gartley on the quarterly chart right at the 78.6%
I am currently short the DAX and Nasdaq as I mentioned above, but am not ruling out another rally to new highs, and as I mentioned above the first pullback is often sharp following by a 3 wave advance to new highs..
If it did that I would absolutely love to short it again and it could be the start of the macro decline you mention or possibly lead to a wave 4 decline which is still going to be a large % move
Either way, i appreciate your post and totally agree with the charts above, just not necessarily the wedge concept - yet...
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DanV MOD dionvuletich
2 years ago
Thanks for your comments. We will let the price action unfold what is in store.
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johnrfraser DanV
2 years ago
Hi Danv, David Alcindor recommended you as an EW expert for your opinion on wave structure in BTC, where we're at in terms of 1s, 2s, 3s, As, bs and Cs and so on, so I thought I'd drop you a link in case you might want to offer an opinion. Thanks a lot, John
https://www.tradingview.com/v/HM51GS2Y/#tc92841
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DanV MOD johnrfraser
2 years ago
Hi just posted my chart to reply to you. Not sure if it is in the right place. But here it is.
snapshot
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johnrfraser DanV
2 years ago
Brilliant, thanks DanV, yes saw it on the other page. I'll reply there as I guess its more in context there...
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cmilburntx
2 years ago
Hey Dan...It look's as though everything is going to plan here, (with gold breaking lower and the S&P 500 starting to stumble)....

What is your most recent thought on your outlook hear?

I appreciate all of your work Dan.

-CM
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DanV MOD cmilburntx
2 years ago
Thanks. Gold indeed is weak and could gather momentum to the downside and develop strong directional move. S&P in short term it is feasible that it might poke a little higher but getting close for the anticipated top to form.
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cmilburntx DanV
2 years ago
Thanks for the update DanV!
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Timing is key
2 years ago
Good call DanV, Got the correction as we were discussing a few weeks back, Expect a bounce up to around .618 of resent correction........When everyone feels better that it was only a glitch, the lambs will be ready for slaughter:) Sorry for the analogy but if you look back at most of the major tops before the crash this was the common theme:) we will have to wait and see.

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Timing is key Timing is key
2 years ago
referencing S&P500 above sorry
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DanV MOD Timing is key
2 years ago
Yes indeed. The question now is is this the beginning or just a pull back? The bounce will hopefully clarify this. Thanks for your comment.
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Timing is key DanV
2 years ago
I re-assessed my pivot count on the Dow ( my contrarian ego coming out ) and for me we are close to an important level for a pivot 4 on the daily, again forming an even bigger expanding wedge, with pivot 5 making a new all-time High! This scenario would make my ego's day. I'll do a daily chart work up when ( if ) we get the upward reversal. Tks
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DanV MOD Timing is key
2 years ago
Oh, OK . We will see.
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Timing is key DanV
2 years ago
Looks like my ego won this battle:) My charts on the S&P500 & the Dow are nudging the extreme upper pitchfork parallel on the weekly & almost there on the daily. and they are completing expanding wedges in both timeframes on both Indicies! I will be looking at daily candles for early signs of an exhaustion move. Keep well and thanks for your detailed charts & analysis.
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DanV MOD Timing is key
2 years ago
Thank you for your comments. Well done for anticipating new high from the sell off. However, the larger picture has not changed and remain bearish. Should the analysis be proven wrong, I will be willing to review it. But for now let the price action show the future action.
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ProgramBaynesJourneyman DanV
2 years ago
Bearish sentiment are growing btw :D

http://i.imgur.com/9SsLmq8.jpg

The amount of shorters is just around 55% 10 hrs ago, now up to 76%.
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Timing is key ProgramBaynesJourneyman
2 years ago
Another way to see what the insiders are doing, ie. Banks, Hedge Funds, etc. is to track premiums of the OTM puts, you will notice a rise or spike as they accumulate their positions anticipating the reversal. I have done this in the past with good results. Tks
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Timing is key DanV
2 years ago
I agree Dan, New high retesting upper parallel which is statistically a selling area, especially a fork this size! We will let the price be the final judge, jury & executioner:)
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DanV MOD QuantitativeExhaustion
2 years ago
Possible. But what alternative do you have in mind? ie is the rising wedge an ending diagonal or leading diagonal? That could answer your question.
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Cfsqbwn.
2 years ago
DanV thank you for sharing your charts...Please I need ask you: Still valid this configuration??
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DanV MOD Cfsqbwn.
2 years ago
YW. Keeping in mind that it is on larger time frame, even though we had a sharp drop and bounce back, nothing has changed from anticipated top. Worth keeping an eye out for evidence that suggest we should review. But till then there is limited upside.
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Cfsqbwn. DanV
2 years ago
Thank you very much, your analisis is appreciate...Please a last question: This indice has relation with nasdaq100 ?? or Can you contribute with nasdaq100 analisis??? best regards
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CosmicDust
2 years ago
This is monthly chart. On a yearly chart, price, RSI, MACD and Stoch are all bullish, suggesting a multi-decades bull market.
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K155MY4R53 CosmicDust
2 years ago
The bull market has been manufactured by QE. Bubble has been inflated hugely and is about to burst harder than any of the others. 2008 showed us what happens when banks default: the governments bail them out. We're about to see what happens when whole countries default.
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CosmicDust K155MY4R53
2 years ago
All good points. If you take a look at the 100+ years chart, even 2008 dip is small. Human as a race is still in its early stage of technology advancement, and innovative companies are envisioning and creating new demands to make life easier and better (there will be a next Apple). So I think we should be reasonably optimistic. It is obvious the market is still trending up. I would stay in the market as long as it is above 10 Month Moving average.
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kilo1romeo
2 years ago
I have posted the following comment only because your prognostication is calling for a > 3 standard deviation move relative to a 15 year measurement. This is an extreme outlier series of events. A linear scale distorts the magnitude of the price moves over this length of time. Markets may move in a linear progression in the short term, however they do not on longer time frames. Most CMT's as well as the NY Institute of Finance CMT program advocate using (semi) log scaling. Can you please explain to those tuning in here exactly what a RSI is, why it is relevant here, how it is calculated and its weaknesses? You seem to be using it as a tool and a confirmation of your analysis. This would be important to the members that are new to this site and investing in general. I urge all to understand what is posted here are opinions not necessarily facts. These opinions could play out as forecasted or not.
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QuantitativeExhaustion PRO QuantitativeExhaustion
2 years ago
Ending 5th wave Super Cycle, or Grand Super Cycle as I see it, lasting only 5-6 years is non-symmetrical in time length. How can a super cycle wave that's been running since 1932 (82 years) only last 5-6 years?
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cdelaney PRO QuantitativeExhaustion
2 years ago
JR,
If you want to see an in depth analysis of the EW count since 1929 by someone who has done EW for 20 years (and is excellent at it), go to https://www.youtube.com/watch?v=x7cocbsDLB4&list=UU0pjWefu2RNLyLcHsgIx4cg .... there's a good 10 minutes or so dedicated to analyzing the very long term DOW and a few alternatives. They all show bearish outcome in the next year or two.
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yardsale
2 years ago
i can't believe that this will happen. We are in the beginnings of a cyclical bull market and i think anyone who shorts it is going to see their capital disappear. I can see why the chart might look stretched but without looking at it on a log basis and accepting the fact that when RSI breaks 80 we are in a bull trend of significant strength anyone who shorts it will be way too early.....plenty of years to go before this market stops rallying...first significant correction maybe 3 years away. watch out if
you play the short side....not without experience on this as began trading japan in 1987 and still active in the market even now!!!........good luck
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baraq.adnan
2 years ago
agree:

Potential Move - Typical but critical
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snapshot


More over. I'm starting to see a more likely result, US markets and dominance remains until 2051
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DanV MOD QuantitativeExhaustion
2 years ago
If you think so, that is fine with me. Personally I think it could be rather wishful wave counts. Not sure if you have considered if it conforms to EW rules and guidelines. In any case time will be needed for it to be proved right or otherwise. Thanks for sharing.
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DanV MOD QuantitativeExhaustion
2 years ago
I see. well that have some promoting targets line that. Just as they did in 2000 top. So nothing surprising there. lol
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QuantitativeExhaustion PRO QuantitativeExhaustion
2 years ago
Think about EW in line with economic expansion and improvement.

Wave 1 First cycle we went through war and atomic bombs/nuclear energy/advanced transportation/infrastructure,

Wave 2 ...then came the energy glut of the late 60's through mid 70's (peak oil myth) Nixon shock / gold to petrodollar

Wave 3... after than came electronics, personal computers, printers, internet commerce (wave 2 of 5 cycle) then came excesses in bad loans, wage stagnation, personal debt, government debt explosion.
(Wave 3 of 5 cycle)... Now we are manipulating undermining what should be a grand super cycle correction , with unprecedented measures by means of countries purchasing there own debt and shelving the problem for decades to come. This shelving will help introduce a new economic expansive phase and that's miniaturization of electronic hardware .1-1 nm chips, 3-D Printed metals/human cell tissue, robotics, liquid electrode fuel.

What will wave 4 grand super cycle bring us? Scares of inflation, which should cause those central bankers to make interest payment adjustments for those indebted nations to payback at "special discount interest rate payments" after all why should the central bank care, there not in it to make money off of the bonds they purchased.

So after that's resolved and people understand there is no harm in the near term we can proceed on building human organ clones with our 3D printers, driveless cars (later planes) and computers/robotics taking over just about ever job there is forcing more debts from nations, while keeping the stock markets rolling. Lastly the cure all for disease and aging (reverse aging) which gives rise to childless low birth rates.
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DanV MOD QuantitativeExhaustion
2 years ago
Well, that all sounds very plausible. Some of those features and many yet uncovered or unrecognised aspect could come into play. Just how and exactly where all of those fits in the EW cycle you are referring to is little beyond me. I am looking at just the normal EW rules applied to existing price data available.Should these continue to show support to your view described above then I will have to reconsider. Till then I am sticking to my conclusion that we are on the verge of major correction that could at least equal that of 2000, 2008 and is likely to retest 2009 lows in many markets.
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QuantitativeExhaustion PRO QuantitativeExhaustion
2 years ago
snapshot


There's more to look at than simple EW. How about Dow theory and other visual observations?
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DanV MOD QuantitativeExhaustion
2 years ago
Well I appreciate your proposition. Dow theory do not tell you when it ends except when you have LL or HH that it has potential turned or rather retracing. It does not tell you how far it is likely to come. What you are doing with your seemingly art work is classic taking historical price and simply extrapolating this in to indefinite future as never ending cycle which continuously move with apparent identical pause at at predetermined juncture. You could be absolutely right. I have not way of knowing how this is likely to develop except based on EW which has been displaying all typical signatures of major top being formed, with waning momentum, falling volume, lack of participating stocks in each rally which has reach a significant level with several fib relationship and divergence amongst major markets of the developed world. So that is good enough for me for now, hence will look to trade with that conclusion, perspective and adjust my views as price unfolds. Will be ready to review the whole analysis if adequate evidence tell me I should. I do not have interest in just intellectual debate but would not wish to convince others as they will form their own conclusion. Hope this helps.
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DanV MOD QuantitativeExhaustion
2 years ago
Then please ignore all that I have said. As I have already mentioned I cannot comment any more, nor attempt to satisfy your never ending alternatives. So please Ignore all that I have said and by all means stick to your findings and research. Hope you and anyone else reading this post will understand. Thanks.
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DanV MOD QuantitativeExhaustion
2 years ago
You could be right. I don't have those details at hand, nor would understand then or know what to do with it. I don't have the ability to analyse all that. So I do the next best thing I can do. That is not to say you must also. So please continue with your endeavour. Wish you well and happy trading.
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DanV MOD QuantitativeExhaustion
2 years ago
No thanks.
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DanV MOD QuantitativeExhaustion
2 years ago
Thank you for your advice. As I said it is not likely to make such a big difference to my view which as you say is biased. But I am happy with that and will review when necessary. But not implying you should do the same. Thanks really.
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DanV MOD QuantitativeExhaustion
2 years ago
JR with respect, I have conceded a defeat. I am at loss to even understand what you wish me to do except become your clone. My bias will be mine only. If I am mistaken it will be my mistake. Why is that an issue for you? I have already said please ignore everything I have said. Yet that is not acceptable to you and you continue to insist I do as you say. I will call this subject close. Happy trading.
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DanV MOD QuantitativeExhaustion
2 years ago
Don't. That is outside your comprehension and my inability to explain. It is not your you problem. Jut ignore it. Let call it a day. This will be my last reply on the subject.
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DanV MOD QuantitativeExhaustion
2 years ago
I don't have necessary data beyond DJI from 1929 on TV. At least I can see that the cycle that began after wall street crash has now or is close to completing. From EWI's work they postulate that we could be completing even longer cycle. Regardless the basic guideline is that when cycle completes it often retraces back to wave 4 of one degree lower. So that initial puts 2009 as target, the next wave 4 could be possible congestion range of 1962-1982. So for now focus is on on at least 50-61.8 fall of the high with 2009 as visual point. Anything longer would be of no volume to me personally or even many mature traders now engaged in the market.
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LudmilaHanania QuantitativeExhaustion
2 years ago
All this cycles and Elliot wave and Gann are a waste of time and no trader using these ever made serious money. Trader Vic once told me that these methods never work, if it works once or twice so does a broken clock. Only sentiment and price action combined with fundamentals matter. He said it will all end badly , there is no way out of all this money printing and yes the end result will be hyperinflation , it might take a few years to happen but it will happen. He has the longest profitable track record of any big fish out there and i set up my finances according to his advise, cash in Norwegian banks in NOK , yes I know it is down now against the almighty USD , physical palladium and gold .
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DanV MOD LudmilaHanania
2 years ago
Thank you for your comments and view points. Happy trading
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cdelaney PRO LudmilaHanania
2 years ago
If EW didn't work, no one would follow it. Some of the most successful traders I know use EW.
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DanV MOD QuantitativeExhaustion
2 years ago
OK very well. I will let you continue your own search for what you feel makes sense. I can't comment any further.
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elp
2 years ago
2015 could be a down year, however, looking back on the sp500 using freestockcharts, their data 1962-2014, years ending in 5 have been up years. Looked at the DOW on Tradingview, 1915-2014 only one year ending with a 5 ended down, 2005. Was down by -0.69% from years open to close. Although this could just be coincidence? TY for your charts!
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DanV MOD elp
2 years ago
Thanks for your comments. Well spotted regarding 5th year of the decade. Normally it is an up year. However, this time round and the proximity of the price and weakening momentum, not sure how this will play out for 2015. Will have to keep it under close observation.
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elp DanV
2 years ago
I was made aware of it by a gentleman named Alan Palmer from Nasdog dot com Don't know him or ever meet him. He made a brief comment on it, curiosity got the better of me and had to look at the charts to validate it.
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DanV MOD elp
2 years ago
Aaah I see. Well W D Gann commented that year 5 of the decade is an ascension year, meaning price go higher. Not a rule written in stone, but could be valid. Then Another analyst made the observation that year 5 has higher odds of positive returns. If correct what I think could happen is that we could sell off big time now to form waves 1 (0r A), then in 2015 we might bounce strongly making a deep retracement to the upside as wave 2 (or B) before dropping in wave 3 or C.
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elp DanV
2 years ago
Very well possible! The next pullback will be the tell for price direction. This could also be minor 1 of intermediate 5, if that's the count then the next pulback would be a minor 2 of intermediate 5 then a w3 of w5?
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elp elp
2 years ago
minor 1 almost complete?
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elp DanV
2 years ago
One more comment and will stop bother you on a wonderful Saturday morning. The ESZ defended it's yearly open at Octobers low along with a hwb that has used the same anchor already to target
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Same anchor new highs has upside targets
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may or may not workout? TDB Have a great weekend!
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DanV MOD elp
2 years ago
Thanks. Not sure about this being minor 1 or 5 or 5. But agree next pull back it that is what will be the key, otherwise we will it will demonstrate a reversal.
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skeed1000
2 years ago
Given the amount Q.E. going on globally and even so World PMI's are only just holding over 50. US unemployment is very low (which never lasts long), the big mining countries (e.g. Australia) are contracting. And very few people see it coming... It is worth watching the charts for to see if this idea is right.
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skeed1000 skeed1000
2 years ago
Remember historically QE has only lead to one thing.... Hyper inflation, and markets never like that :)
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Pink Grasshopper PRO skeed1000
2 years ago
what do you mean historically? Isn't QE in its present form and flavor an invention of its own kind? On top of that, we're on a verge of a major deflationary crash. Hyperinflation is a myth. nothing more.
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KPEI
2 years ago
Cape Shiller Ratio is also looking grime so I'm definitely with you on this one.
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DanV MOD KPEI
2 years ago
I hadn't checked that. So thanks for the info, it is interesting. It could take a little longer for the confirmation of top being in place. Yet all other metrics ae suggesting the same. Here is S&P500 with Staple/Discretionary ratio is suggesting rotation to staple. Should this continue it will suggest weakness in the market to follow.
snapshot
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we may have a short-term hiccup but S&P is going for 3000 and likely higher. Dow will hit 20,000-40,000 level within years as well. DanV, there's absolutely no way we can have a correction of this size. Bond markets are virtually non-existent by now and possibly entering a bubble, commodities are volatile and/or way too small of a market, real estate is a illiquid (relative to other markets)... where is trillions of $ of global investment money to run? The equity markets will blow people's heads off, the harder the bears insist, the higher they'll go.
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DanV MOD Pink Grasshopper
2 years ago
You could be absolutely right. However, if you say Bond is in bubble and if it were to pop, normally it has been observed that the money go into stock. That could happen again. Yet what if there is s different dynamics at play. What if the US market has risen to current level due to money flow from like s of Japan and other major financial centres begin to reverse course from unwinding positions from leveraged funds. What if wealth repatriation finds that Bond sell off do not go back in to US stocks but a large portion leave US soil? I have no way of demonstrating this but should it pan out then I can see this getting real nasty as many accepted relations ships could fail. Therefore, whilst I sincerely hope you are right, I am concerned and would watch the market for the kind of weakness I am suggesting by my chart. Thanks for your comment. I Appreciate it.
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Kumowizard PRO DanV
2 years ago
What's more, what if it is a "double bubble" now? I mean no doubt the bond and debt mkts globally are a real bubble. US bond mkt will lead the selloff, I expect a serious flattening on 2yr/10yr and 5yr/10yr points of the yield curve next year. I just read a detailed chartbook from a major bank's analyst about US jobs and employment situation, it had all kind of comparisons. The conclusion is that FED is already extremely behind the curve! From 2015 inflation will very quickly pick up in US, mainly from a starting point of wage growth. So probably the FED will have to be very very sharp in communication, as if they hike too quickly and too agresively then the QE addict Wall Street will have problems with equities, while if they don't then inflation will hit real economy badly. I think they exactly know what is the problem here. That is the last round of QE and its extremely slow tapering was a big mistake. Last round of money printing had no added value to real economy, which likely could have been worked its way without it. However it caused such an asset inflation and such a leverage in banking system (espec in derivatives), that if the system collapses again, there will be a total freeze both on financial mkts and in real economy. So basically they will have to keep this dream alive, and they will have to tolerate a higher inflation. In fact 2 yr and 5 yr bonds are better shorts than the equities, as that bubble has no more room to grow. But finally when there will be no free money printing, and rates go higher, stocks will have to be repriced to the "old normal".
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DanV MOD Kumowizard
2 years ago
Thanks. Quite possibly. It is hard to anticipate every permutation except to be open minded and be willing to expect the unexpected.
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Kumowizard PRO DanV
2 years ago
Exactly. That's why I don't read zero hedge or don't look at CNBC, etc. All is just a noise, and push your mind to think in presumptions, instead of looking at the chart and think based on price actions and trade signals. Everything you have to know and see is there on the charts in time. There's nothing like "oh, it's too late to enter".
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DanV MOD Kumowizard
2 years ago
Thank you for your comments. Whilst I do not completely dismiss major factors or events and related news, I must agree with you in that I cannot easily workout where all of these things fit on the chart and what is the lag or lead time. Extent and duration of their influence, like some have attempted to do. So chart is my main approach and have some identifies area where any analysis being challenged would require a review or adjustment. Once again well expressed view and thanks.
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Pink Grasshopper PRO DanV
2 years ago
I completely agree about the foreign capital inflows into US. Europe will implode one way or another and Japan will have to taste its own bitter reality as a result of Abenomics and prior mismanagement. The question does remain, where will the money go, US debt or shares. US economy is scheduled for a nasty turn a year from now, as Kumowizard suggests. This however will be a major DEFLATIONARY factor. All the commodities have already been plunging as they are THE resources used in economy, it's only matter of time before officially the label "recession" will have to be placed on the economic situation. Historically, rising interest rates produce a rising market. Doing so will only stimulate foreign money even more to take advantage of parking in the US dollar. QE was suicidal from day one but the nasty truth is that while they decided to inject morphine, they never actually took enough to overcome the mess they created in the first place. QE needed to not exist at all or, since it WAS introduced, it needed to be 2-3 fold to bounce back the system. In the end, the worst of all possibilities was elected. This will be a tussle, no doubt, but US municipalities are moving towards the edge of insolvency and the Feds may not be able to keep the lid on the situation when US Treasuries are the last dirty shirt in the global hamper. Rates will rise but I don't think the Feb will be as insane as to announce a sudden uptick. In the end, the capital may opt for decent dividends and rising valuation of shares than to take chances in the sketchy bond markets. It's all about how long will the global eyes have faith in US Fed debt as that stand on nothing more than the momentum of PAST (and I mean decades and decades long) reliability of the US government and economy, both of which are currently failing. Alas, the worst is still ahead and end of 2015 will mark the beginning of unraveling. Thanks for your inputs.
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DanV MOD Pink Grasshopper
2 years ago
YW. Indeed lot of currents and counter currents. So will have to keep tabs on how prices react and what they show as to future trend.
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DanV MOD
2 years ago
I am in a process of updating and republish this chart as I think it is so important that we do not lose sight of the bigger picture amidst seemingly never ending sharp drops only to go on to achieve new marginal higher high. This could easily make many think we are in to new paradigm ie its different this time. However, I think we are very close and upside it very limited. it could real wild and post 2200 as an out side chance but not alter the bigger picture. Here is the interim chart
snapshot
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Another crash can happen, and nobody will see it coming. These days though it seems like everybody sees it coming. I like the comment about 15 years...what if it did something more like 1966-1982. That could serve to relieve the overbought condition, and still not bring about the end of days.
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dmagtrader
2 years ago
If the SPX tops, gold bottoms, what do you think of the US dollar? Do you think Gold and the US dollar can rise at the same time as everyone exits out the market and goes to cash, or is it possible for both the dollar to drop in value at the same time as the market. Trying to understand the correlation. Thanks for your insight!
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DanV MOD dmagtrader
2 years ago
Hi thank you for your question.

My analysis for Gold and DXY have been published and I will link the charts for you below.

It is my belief that the major top in Equities in process of being formed. Though since I have publish this chart it has gone on little higher than suggested but not to the extent that it has changed the overall picture.

You are correct that normally money would go into Bonds. But in this case if all or majority of the USD coming out of Equities goes in to US Bonds then from USD point of view it is neutral. Just like when money coming out of Bonds go into US Equities.

However, if some of the money coming out goes into Gold then I am not sure how much this might affect USD, may be not as it is denominated in USD. It might affect it some what, but can't quantify from my limited resources of analytical data and methods. However, unlike 2007/08 when every thing fell against USD, I think Gold is likely to benefit. It might be viewed as safe haven this time during the turmoil in the market (though it must be kept in mind that on larger perspective we are heading in to deflationary environment when it is not supportive of Gold going higher)

I suspect that during the last 2-3 years when both the and USD & US Equities have gone up probably as a result of net inflow of foreign money, some of these would be repatriated or reinvested in other currencies and geographical region.

I can't demonstrate this idea as plausible, but when I look at DXY and several USD currency pairs, they all require at least retracement as minimum then they could all continue to weaken against USD in which case we might have USD gaining for few more year.

OR as I suspect DXY is in major bear market which is about to resume then it might follow that USD sell off in equities would result in net outflow of money away from US soil. So that needs to be proven and how DXY behave over next 6 months or so would give us much better view of longer term price path of all USD denominated assets. It will confirm if the current USD weakness is just temporary or resumption of bearish cycle.

Therefore right now other than Equities forming a major top, I have flexible outlook on USD & DXY which will remain under review for few months before making conclusion. Similarly we could, as has often happened previously when both USD and Gold have go up together.

There are so many major factors at play in global finance that it is not easy to have them all fit in perfectly to conform to a particular model and during turmoil some of the standard behaviour could remain out of sync and confused.

Sorry can't be as clear as you might have expected. But it will give some points to ponder on.
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DXY - POSSIBLY AT REVERSAL ZONE
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DanV MOD DanV
2 years ago
Gold - Has Not Lost It
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DanV MOD DanV
2 years ago
snapshot
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DanV MOD
9 months ago
Announcement: Is generational top in? Please register for free webinar on Saturday 26th Feb 2016 at http://www.danv-charting.com/live-webinar.html
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DanV MOD
9 months ago
UPDATE: Please note that I have published and update this chart
A GENERATIONAL TOP IN THE MAKING
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