QuantitativeExhaustion
Short

SPY Elliott Wave Alternative

BATS:SPY   SPDR S&P 500 ETF
1272 13 26
Went through the SPY             chart looking for clues. Not too many people have a solid founding on EW counts with some sort of rule breaks. I went through with a Scalpel on that wave 1, proving it is possible to count those waves in a much smaller time frame. Wave 1 is also shorter in length than wave 3. So we did not break the 3 can not be the shortest in length rule. Everything else checked out on the way up. Now that we have finished that ascending wedge (c) on the 5th wave extended slope (or even broader scope-Expanding Flat A-B), we could see a bunch of possibilities.

What I'm looking for is a test of the high. However, I don't think we will get all the way up to the high before falling and making a new around July.
Why so bearish you ask? Look at the US bond market. Look at the commodities . Corn             , wheat             , sugar             , gold             , silver             . All nearing the 2009 lows. What will save this market? The same thing that saved us from a collapse every other market friction point. THE FEDERAL RESERVE and Helicopter Ben Bernanke. Bernanke will have the Jackson Hole event this August, before the US Federal Debt Ceiling is debated in Congress. The same debate that took place in 2011 and rocked the market for big drops.

Versus 2011, investor are more nervous this time around which is causing shakyness and market gyrations. Ultimately the proverbial can has been kicked to a breaking point once again. Who cares if the market is higher now than in 2011. It's artificial insemination of worthless ink and paper debt that has gotten us here. Debt has been racked up both for the individual consumer and the US Government.

US debt stood at 5.9 Trillion in 2000-01 versus 17.35 Trillion in 2013. Where has US GDP gone since 2000-1? 10.2 Trillion in 200-01 vs 16.2 Trillion GDP in 2013. So essentially for every 1.00 dollar the US Govt spends they only turn over about .35, which is a negative cash turnover. No business can last more than a few years with a -.65 cash churn rate. What's really troubling the negative churn rate gets worse every year. The United States has never experienced anything like this. Not even during the Civil War or the Great Depression. This is what everyone is worried about. Including Ben Bernanke.


Climbing even closer to 17.5 debt ceiling threshold with treasury rates rising these past two weeks, Investors are already looking down the road 6 months from now. We all have the same questions on our minds. Will we or won't we increase the debt ceiling? Will the Federal Reserve end QE             before the end of the year? Did the US bond bubble burst? How can multinational US businesses earn money with the Dollar higher than last year? We have more question now and worries than in 2011.


What do you think? Is this premature to call a bear raid on the bulls four and half year run?

The only Bullish proposal I have is that the Federal Reserve and Bernanke will expand QE             once again, and or eliminate or diminish interest on debt payment for the United States.

June 27
I hear rumors of China Central Banks possibly attributing to easy money now that the Federal Reserve has dropped the ball.

Some are arguing this is an terminal ending diagonal .' The most recent drop in the market ....

The ending diagonal triangle, or wedge as many call it, is a narrowing price move composed of two converging trendlines highlighting a wave 5 (many times) extension pattern. The chart to the right shows the ideal example. The ending diagonal is a special type of motive wave that occurs primarily in the wave 5 position when price has moved too far and too fast. I like to think of it as a rising or falling consolidation. Some ending diagonal triangles appear in the C wave of an ABC correction, but that configuration is rare. In all cases, the ending diagonal terminates the move of larger patterns. Diagonal triangles substitute for impulse waves.

The ending diagonal triangle shown to the right is bearish because price usually breaks out downward from the pattern with price often retracing back to at least the start of the triangle.

The blue inset in the figure to the upper right shows what is called a throw-over. Throw-overs occur when price breaks out of the pattern on the side connecting the end points of sub waves 1 and 3, quickly reverses, and then moves back into the pattern.

Each subwave of the ending diagonal triangle divides into a three, so the subwave count for the triangle pattern is 3-3-3-3-3. The picture above right (bull market) and right (bear market), shows the typical position of the triangle in an impulse (motive) wave. The two solid blue squares in the above right chart highlight the overlap of subwave 4 with subwave 1. The ending diagonal triangle is the only five wave pattern moving in the direction of the main trend that frequently, but not always, shows such an overlap.

The chart to the right shows the ending diagonal triangle in a bear market. Notice that the waves within the triangle subdivide into 3 subwaves each. This one also shows subwave 4 overlapping subwave 1. This pattern is bullish when price breaks out upward from the top trendline. Price often rises back to at least the start of the triangle.


The ending diagonal triangle has rules that govern its shape. They are listed here.

The subwave action usually follows two converging trendlines.
Subwave 4 often overlaps subwave 1.
The subwave count is 3-3-3-3-3.
A throw-over occurs when price pierces the trendline connecting the ends of subwaves 1 and 3.
The ending diagonal triangle usually occurs as part of a fifth wave extension.
-- Thomas Bulkowski

Lets test the bulls theory that this run continues. Because if it does not hold up> we can expect further declines.



http://www.thepatternsite.com/EWDiagTriangle.html
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Too much missing to call this a Descending Triangle
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Shortness of B caused E to be extended and overeached both descending support/resistance
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QuantitativeExhaustion PRO QuantitativeExhaustion
3 years ago
NOTE:

Check out EWP, Frost and Prechter, Chapter 1, Figure 1-21
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What could possibly come out of our complex descending triangle pattern?

Expanded Flat Elliott Wave

Flats come in three varieties, regular, expanded, and running. An expanded flat is more common than a regular flat. Elliott called an expanded flat an irregular flat. The chart to the below shows the basic configuration of an expanded flat in a bull market. Notice how wave B extends beyond the start of wave A, and wave C extends beyond the end of wave A.

The chart to the below has the same general shape as the preceding chart but with more detail. It shows the subwaves within the extended flat 3-3-5 correction. The red numbers 1-5 describe the line segments or subwaves within the ABC correction. Wave A is composed of three subwaves as is wave B, but wave C has five subwaves. That's where the flat 3-3-5 term comes from. A flat is a term used for any ABC correction that has 3-3-5 subwaves.

Expanded Flat Elliott Wave Rules

The three wave corrective phase has rules that govern its shape. They are listed here.

Corrective waves can head up or down.
The corrective phase aligns against the trend of one higher degree (a counter trend move).
Wave B terminates beyond the start of wave A.
Wave C terminates beyond the end of wave A.

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First it was gold, then it was the bond market, and now we have US equities at risk. With the recent throwback we are only 1/5 to 1/4 of the way to reaching our destination.
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BuboWaveTrader
3 years ago
looks that we gonna have a ugly summer here,,,
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QuantitativeExhaustion PRO BuboWaveTrader
3 years ago
Yeah.. maybe one more push for a top and we reverse.
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BuboWaveTrader
3 years ago
very intresting time now !
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Rethought the EW cycle pattern
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JimFred PRO
3 years ago
I am new to this forum. I have not had time to evaluate this application's EW tool. I have NEVER found a machine based EW counter that was worth using. How do you feel about the EW tool here?
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You have to plot the EW yourself. Know and understand the rules. I often use text to describe EW, rather than the tool.
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Decent site for EW counters http://blog.wavetrack.com/sp-500-mid-term-trend-remains-bullsih/
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