Monday, December 07, 2009

Late note

Since my earlier post today the e-minis have dropped about 9 points to 1100 and so far have held that level. While I didn't anticipate the afternoon break I do not think it negates the prognosis I offered earlier today, i.e. that the market is on its way to 1130 or higher.

Why? The afternoon break so far has held at the lower boundary of the green trend channel. In fact the drop so far has held above the low established at 1098.75 in electronic trading this morning. It has also held above the Friday low at 1095.50, thus preserving the pattern of higher lows since November 27. A drop below 1095 would negate these apparently bullish hints, but until that happens I am going to maintain the short term bullish stance I announced earlier today.


F&H Painting said...

Thanks Carl,

Good stuff

jeff said...


By my Elliott Wave count, we have finished an ABC retracement up to 1110 after a classical 5 wave down. At close, I think we have already finished subwave I down and subwave II up. As such, I agree with your 1095 assessment here. If that happens, that will confirm that we are in subwave III down and will look for this continued 5 wave down to complete itself around 1080 or so, which would mark Wave E of a larger A-E wave formation that started around November 20th. After we hit 1080, I will be looking for final 5 wave up move up to 1025-1030 by the end of the year.

However, I would note that bredth and volume continue to dry up and the weekly MACD on the SPX charts are on the verge of falling over.

After a classical 5 wave down that started in October 2007 and ABC retracement (A up, B down, and the current C up pattern)that started in March 2009, I'm looking for another 5 wave pattern(continuation of the original trend) to commence sometime in the next 1-3 months that will take us down to S&P 400 by mid-2011.

As confirmation, I will look for these events:

1. An S&P close below 1030
2. a Hindenberg effect
3. the $USD to stay above the 50 DMA(notice that last Friday, the $USD closed above this critical mark for the first time since April).

As such, I'm looking for us to first hit 1080 in the next week, then 1130 by the end of the year, then to start our descent down 400 by 2011. Given the technicals and fundamentals, not to mention hedge fund managers desire to protect profits, I see no way we make new highs for at least 10 years to come. After experiencing one of the worse credit excesses in the history of our country, we simply have too much de-leveraging that has to occur.

extrader said...


Your Magazine Cover prediction on NYX was right own... Ever since your post on ur other blog, NYX was trading near 30... today NYX is trading at 24.... that is a 20% haircut since ur prediction of going back to 70!

TradingNuggets said...

Whatever the direction of the market at the open, Meredith Whitney will be responsible for a few of those pts in either direction because she is on CNBC on this Tuesday morning.


slip5ham said...

extrader, Shhhhhhh nobody has sounded quite as silly as you have since you exited hibernation. It's a lot easier when you can elect to take 100's of points off between posts.