Sunday, November 20, 2016

Here's Where Some Others Think the Market is Going

In an article published on November 18, 2016, authored by J. L. Yastine, and published in the The Sovereign Investor Daily, here is where some other people think the market is going.

 Four Market Gurus Call for DOW 30 - 50,000

Right on? Not in my view! Have a good week & safe travels if you are on the road.

1. Hi Joe,
Referring to your post “Under the big top” and present DOW’s situation, what do you think about the ED for DOW but with below labeling:
1 = (0-A-B-C) = (15450.56-16510.98-15503.01-18167.63);
2 = (A-B-C) = (17331.07-18016 -17063.08)
3= (A-B-C) = (18622.01-18247.79-18668.44)
4 = (A-B-C) = (17992.21-18449.88-17883.56)
5 = (A-B-C) = (18934 or still ongoing - ??? - ???)
All Fib proportions (extension and retracement) are almost perfect. Labeling works only for DOW, does not for SPX. Looking forward for your opinion. Cheers.

1. You cite the biggest objection : labeling does not work on the SPX. Also, it remains very difficult to call wave 2 a true zigzag - especially in the ES futures.

2. Joe,
1/ Sorry, my expression was incorrect but understanding clear. DOW did not make the lower low in February (you called it “orphan wave”) but SPX did so in this case your (1)-(2)-(3) on DOW chart (still referring to your post “Under the big top”) can be also A-B-C. In this meaning above labeling does not work for SPX. Of course, I agree with you, SPX can make ED but wave (A) of (1) started in February as per your other charts (for example your post “Five waves up”) and not in January like for DOW. Generally, SPX is lagging and makes wave (3) now when DOW did already.
2/ what do you mean “a true zig-zag”. Your wave (4) is the W-X-Y formation when my labeling of wave (2) is (A-B-C) = (17331.07-18016 -17063.08). In what sense this is true or not true zig-zag?
3/ Really, future market does not bother me. Different emotions, different temperament, a different strategy to invest. Each pattern on the cash market does not to be perfectly reflected on the ES futures or full sized futures and vice versa.
Cheers

3. So far, it is what you are calling the 'aberrations' in the futures market which have kept me on the right side of saying higher highs are possible in cash. And the higher highs have occurred in the cash - as opposed to your count. So, if the cash count might say 1, down, and 2, up .. because there are five waves down to 1, and wave 2 has not made a new higher high, but the futures argue against it because the futures make a higher high at 2 in the cash, then there is no way I will call the wave a 1, down, 2 up. That is because no part of a second wave should exceed the starts of it's 1 wave.

The same is true with a zigzag. No part of a B wave in a zigzag should exceed the 'start' of it's A wave. That is true in both the futures and the cash. Those are the rules, and I respect them.

It is often true that those first five waves down being called 1, largely because they are five waves, are just the C wave of a FLAT for the fourth wave with higher highs to follow as wave five.

The same is true with the C wave of a FLAT (B) or (X) wave. One does not want to get faked out by those situations.

Hope you understand. Five-waves down is NOT always a 1, or an A. It can often just be C.

2. TJ. I hope you are right, but why would this be a top? There are so many stocks that are working right now. And the monthly index charts are looking very bullish. I know you were one of the few to nail the 2015 ED top. Is it common to have to ED back to back?

1. Hi Todd. As I have said numerous times in the blog, I have no preference whether Primary V completes as a diagonal or an impulse. See the Thanksgiving Day post for further information. A top in no way appears clear to me yet - at this point in time. Close, but not here yet.

2. Ok. I hear you say you have no preference, but how does one trade this? If we are in just the beginning of a wave 3 of 3 this could go significantly higher. But if we are "close," that makes me more hesitate to initiate any new trades. I'm not asking for trading advice. I'm trying to figure out if EW can be helpful in identifying entry and exits.

3. Todd, at the bottom of every post and of the site, in general, it clearly states that I do not provide trading or investment advice. All I do is count waves. However, in November of 2015, I posted a Paraphrase of Ira Epstein's Guidelines for trading and you are certainly welcome to review that article. I make no claims for the profitability of his guidelines, but I do 'like' them. Your use or non-use of them is purely your decision and no responsibility is accepted for your decisions. Here is the URL http://studyofcycles.blogspot.com/2015/11/paraphrase-of-ira-epsteins-rules-for.html and you can copy and paste to your browser if needed.

4. Thanks for your reply, TJ. I see that is a lot of info. I will dig into it later. It will be really interesting if you are right on this "top is close" call.