Facts Are Stubborn Things Part 2Central Banks' in Tattersby Joseph Russo, Elliott Wave Technology | April 14, 2008Print http://www.financialsense.com/fsu/editorials/russo/2008/images/0414b.24.gif
THE ALADDIN’S LAMP OF CENTRAL BANKING COMING FULL CIRCLE
If one is inclined toward general agreement with the notion that the pinnacle of power in the world is the power to create money, - then one must hastily conclude that; the government-aligned private organizations of central banking cartels, whom fund all of the worlds imperial centers of power, – must then be held as the absolute mightiest of powers, whom preside at the highest seat of omnipotent influence over a vast array of interconnected relationships across the entire global landscape.
If one further accepts the premise that all power tends to corrupt, and that absolute power tends to corrupt with far greater certainty – one is then compelled to make the natural assumption that central banking cartels would inherently possess an inordinately high level of probability in harboring substantial tendency toward hatching steady streams of pervasive intrigue and corruption throughout their tenures.
Harmfully adding to their mystique, central banks often maintain a level of autonomy from the governments to which they contract or have been granted charter in the delivery of their product and service.
The most obvious product and service central banks peddle - are their exclusive charter agreements with select governments in securing that government’s official authorization to lend it money, and for acquisition of absolute monopoly franchise in the manufacture and management of the associated country’s legal tender system.
Astonishingly, in addition to the grant of such omnipotent monopoly franchise, governments have somehow been compelled to grant central banks broader powers to regularly meddle and tinker with the supplies of money they create, the amount of credit they make available to various entities, the freedom to adjust various terms and rates of interest, and the liberty to directly intervene in their financial markets at will, or upon any perceived necessity to do so.
To briefly digress with regard to the United States, it is somewhat bewildering when one pauses to consider why congress, whom by the legal authority of its constitution possesses the power to coin its own money and regulate its value, would find it compelling instead, to borrow money on the credit of its Nation, under willful contract with a separate entity, to which it is then obligated to pay back with interest.
Clearly, it is necessary for governments to establish a uniform medium of exchange for its citizenry, and also for the purpose of fairly and effectively trading their surpluses with other agreeable nations. Should for whatever reasons beyond our comprehension, governments find it necessary to borrow money at interest from a central bank vs. creating their own - free of usury, so be it. We entrust that such reasons may be of practical necessity, though we are not certain what those reasons might be.
However, it is inarguably NOT a necessity for governments to then grant central banks a much broader set of unchecked elaborate authorities, which embody the express supreme power to impose critical influence on either sovereign or global economic endeavors, or the express authority to execute direct covert interventions amid a sovereign nation’s supposedly free financial market.
In light of the culminating malaise in the credit, currency, and financial markets, we thought it may be illuminating to view the collective product of central banks through the prism of their respective fiat currencies in relation to the price of gold.
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Adopting a National Currency and Banking System
The ways and means by which various governments do so – is quite illuminating as to the equitable and fiscally prudent manner in which various nations embark upon dealings with neighboring countries, and the manner in which such nations responsibly steward fiduciary prudence over the interests and future destinies of their respective populations.
One would naturally assume, that in order to engender full faith in any given government and the credit worthiness of its treasure, that the medium of exchange, or legal tender such governments elect to adopt, would be comprised of a currency medium that is stable in its value, and possesses a durable, reliable, and sustainable metric of equal weight and measure.
Shockingly, ALL modern-day legal tender manufactured by central banks around the world, have no such stability or metric beyond the decree to which those governments whom endorse its issuance approve, and upon the day-to-day faith and confidence that such currencies will be accepted as legal tender in exchange for goods and services whom its citizenry relies upon for planning their futures, and in providing for the sustenance of their day-to-day survival.
Who’s the Boss
Central banks have been carefully positioned to exist as private legal entities, somewhat separate and independent from the governments they serve, and sometimes defined as quasi-government entities so as to in part, avoid plausibility of any partiality relative to specific political influence in setting their autonomous monetary policies.
If one is to rationally assume, that Governments, under which such central banks have been contracted to serve, assuredly have formidable, if not a complete and vigorous oversight control over the central banking entity to which it has awarded such momentous monopoly franchise, - one must inarguably conclude that the private, quasi-governmental separation status of political impartiality, is likely to be revealed a complete farce.
If in truth however, governments do NOT possess any meaningful power and oversight over their respective central banking entities; one must then be compelled to conclude that the central banks themselves, that have the upper hand in command and control of the governments who are deeply indebted, and wholly dependent upon them for survival.
In this frightening scenario, desperate governments who are in perpetual dire need of money and credit to finance their operations, and to provide reasonable opportunities for their citizenry - must naturally bow in total subordination to the central banks will at every measure and turn of events.
We suspect it is in part, for this very reason of extreme and dangerous vulnerability, that that the framers of the American Constitution issued congress the power to coin money - regulate its value, and to fix its standard weights and measures.
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The Founders Original Intent
For all of the fair and noble wisdom to which the framers’ valiantly labored in providing constitutional safeguards and provision to protect against such dangers, at this present moment in time, one has no other choice but to rationally conclude, that since Hamilton succeeded in defeating Jefferson and Madison in passing a string of policies associated with his rather ambitious and intriguing assumption act, which set the stage for the first central bank of America; This particularly regrettable brand of evil has prevailed against the greater good, inherent in the founders’ original wisdom.
In the years following Hamilton’s economic architecture of intrigue, there were numerous episodes of strident dissent, which led to banking wars, upheavals in trade and commerce, the legal tender act of 1862, and ultimately, to a series of constitutional legal tender cases heard by the Supreme Court.
In the first of such cases in 1870, the Supreme Court held that paper-money violated the United States Constitution. Two subsequent cases were heard in 1871 and 1874, which regrettably reversed Hepburn v. Griswold in 1870.
In 1886, George Bancroft, an eminent philosophical historian of the ages, prepared a brilliant 40-page essay on Judicial Power and Unconstitutional Legislation in response to the legal tender cases reversing the Supreme Courts original findings.
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Introduction
Good money must have an intrinsic value. The United States of America cannot make its shadow legal tender for debts payable in money without ultimately bringing upon their foreign commerce and their home industry a catastrophe, which will be the more overwhelming the longer the day of wrath puts off its coming. Our federal constitution was designed to end forever the emission of bills of credit as legal tender in payment of debts, alike by the individual states and the United States; and it will have that effect, if it is rightly interpreted and firmly enforced.
Bancroft’s Complete 40-page Essay AN ABSOLUTE MUST-READ CROWN OF GENIUS
To set the subject in the clearest light, it will be proper to trace the history of American bills of credit until they were abolished by Massachusetts and Connecticut; to revive the memory of the great struggle for their suppression by the separate colonies or states to the end of 1786; and to ascertain what decision on paper money was made by the constitutional convention, and accepted, one by one, by every state. It will then be the time to examine the new interpretation of the constitution by the present court; and ask after the defenses of the people against the revolution with which they are threatened.
Fractious tidbits OLD and NEW:
RECENT HEADLINE
Fed Weighs Its Options in Easing Crunch
“The internal discussions are part of a continuing effort at the Fed, similar to what is under way at foreign central banks, to determine its options if the credit crunch becomes even more severe. Fed officials believe the availability of such options largely eliminates the risk of exhausting its stockpile of Treasury bonds and thus losing its ability to backstop the financial system, as some on Wall Street fear.”
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RECENT HEADLINE
Chavez Muses About Buying IMF Gold
"Look at how the U.S. Empire must be in unimpeded decline, that the International Monetary Fund ... is selling its crown jewels," Chavez said during a speech at a military parade. "The International Monetary Fund is selling what gold it has left to be able to pay salaries," Chavez said. "We could give a loan to the Monetary Fund. ... We could buy some gold bars. ... I think they're selling gold cheap." Chavez spoke as the IMF and World Bank were holding weekend discussions in Washington. One proposal on the agenda would trim 15 percent of the IMF's staff and sell about US$11 billion (euro7 billion) in the institutions' vast gold reserves. A vociferous critic of the U.S. government, Chavez also has long opposed the policies of the IMF and the World Bank. He called the IMF "the financial arm of the empire."
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Conclusion
No doubt this too, is indeed a most interesting time in which we live. We are by no means suitably equipped to offer any speculation of merit, as to how such a vexing set of entanglements may begin to equitably become unraveled amid the complex daisy chain to which they so fragilely cling.
Perhaps at some future flashpoint of enlightenment, our species will be collectively compelled to appoint such endeavor, to a council of universally embraced and globally renowned scholars of varied notable disciplines. Their universal mandate may perhaps consist of extracting, and equitably interpreting from the archives of world history, all of the learned wisdom of ages.
With equitable dissemination of such knowledge, their task would be to transcend all partialities, and apply such wisdom with an astute, incorruptible collaboration, to form a universally equitable framework of resolutions, designed to bring an end, once and for all, to the centuries of world violence, envy, hatred, greed, and injustice, to which humankind ignorantly insists upon perpetuating from one generation to the next, since the time of antiquity.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F0414b.html&title=%22Facts%20Are%20Stubborn%20Things%20Part%202%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2004%2F14%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3b62d7c21fb874/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Facts Are Stubborn Things Part 3by Joseph Russo, Elliott Wave Technology | April 22, 2008Print Part I- Legislating Denial or Sweeping Change for Better or Worse
Part II- Central Bank Insolvency Crisis – winding down a 300-year Paradigm of Failure & Deceit
Part III– Market Update – TA in Full Command - Trading Profitably No Matter Who’s Controlling the Markets
Part III
TRADING AMID TRAVESTY
Nothing new under the sun comes to mind when pondering whether financial markets are truly free. Beyond all related conjecture, it remains a stubborn fact that markets have always behaved in a way to perplex the majority of participants.
Adding to the complexity of this rather standard fare, are recent revelations that have clearly come to bare. Namely, an epic derivatives implosion, which candidly reveals that much of the financial sphere floats upon nothing more than the hollow intrigue of innovative means by which the elite plunder inordinate profits from the well baited and unsuspecting. This too, is nothing new, but rather a predictable recurrence of such grand consequence that it becomes impractical to veil in any other light.
Apart from the known risks, the historical travesty of stratagem deeply rooted in the financial markets will likely surge prior to coming full circle in lasting dissolution. Despite this, investors must continue to invest and traders shall continue to trade.
Nearing a Precipice or more Mountains yet to contrive
Wall Street’s rather mature and surreptitious takeover of the real economy in concert with the bursting of an irresolvable daisy chain of derivatives has imposed a virulent mistrust throughout the financial sphere. Institutions, traders, and investors are now more uncertain than ever as to the durability of dependence upon financial innovation to grow the economy safely or efficiently over time. This leads one to ponder just how many contrived hills may lay ahead in reserve for mounting additional campaigns of familiar pillage.
Given the added fact that most all investment and speculation appears to be rooted upon a fictitious model of finance, what beyond empty pandering in the deceptive management of manufactured expectations might one assume reliable and trustworthy? At this stage, we suspect it is quite clear that all of the spin, reassurances, and cheerleading amounts to nothing more than a contemptible charade.
We have long ago resolved to cast aside trust in all such vacant assurances, alongside any illusory lowering of expectation benchmarks. “May the buyer beware”, stand as an ever-present axiom in guiding every facet of one’s endeavors in the financial arena.
Now more than ever, reliance upon sound technical analysis cuts through the clamor of swelling paradox, and provides nimble clarity as to what markets are presently telegraphing, inclusive of their extending state of contrived ambiguity or resurgence.
TA provides a Unique Visual Study of History
Viewed through the prism of financial markets, technical analysis (TA) is an effectual study of world history and current events. To understand what is happening in the present, it is first essential to comprehend what has transpired in the past. To this end, there is no better model from which to capture the financial specter of world events than through the masterful framework of demarcation resident in Elliott Wave Theory.
Often, many dismiss the theory the instant a specific outcome of desire fails to manifest in textbook fashion. As with all chart analysis, Elliott Wave Theory is in part science, and a method of artistry. Like history, it is subjective, and as a result, most anyone who can count to five and recall the alphabet is bound to misinterpret the whole of its utility, tenets, and nuance.
How we Preserve Capital (long-term benefits)
We have extracted the S&P 500 chart below from our Interim Monthly Forecast archive. The commentary beneath the chart, dispatched back on September 12, 2007, exemplifies the foresight and benefit that skillful dissemination of technical data bestows upon those with privy to such insights.
Of notable interest, boxed in yellow, is a previously forecast upside price-objective defining an anticipated range of achievement between 1569 and 1726. One month later, in October of 2007, the index would go on to register an all-time intraday high at 1576.09, ten points beyond threshold of the target window identified.
A second point of notable interest resides in the lower RSI panel. Two months prior, upon print of the July 1555.90 high, we recalled attention to July’s dispatch, reminding readers of the early-warning defensive posture suggesting pro-active long-term investors to consider taking 1/3rd high-level profits for the purpose of reducing long side exposure to a maturing market cycle.
The following month’s report, dispatched October 2007, issued a second defensive warning against the 1576.09 all time high. In October, we again suggested pro-active investors take a 2nd round of high-level profits in further reducing long side exposure to just 1/3 their original size.
By March of 2008, five months after registering an all time high, the S&P plummeted over 20%, near the deepest chart-noted .382-retracement level, shedding 319.11 points prior to printing a minor low at 1256.98. After trimming nearly 38% off the entire advance from the 2002 bear-market low, the market has since become largely ambiguous following unprecedented intervention by the statist Federal Reserve and associated banking cartels.
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How we Identify Speculative Profits (short-term benefits)
In a broad philosophical sense, it matters greatly to us that the markets trade freely. However, if markets are indeed contrived, it matters not by whom, or what forces may control such travesty, but rather we possess a dependable means by which to identify profits amid either circumstance.
We have taken the intraday S&P 500 chart below, directly from our most recent Near Term Outlook publication.
The text supplied beneath the chart is NOT that posted with Friday’s Evening Post dispatch, but rather from preceding commentaries provided earlier in the week.
We publish the NTO twice per week along with three supplementary Evening Post Reports, which provides our readership with five days per week of seamless coverage of the major equity indices.
End of Week Surge
To be perfectly candid, we had anticipated neither the speed nor amplitude achieved in Friday’s rally.
We had in place however, the noted buy-trigger capturing 34-pts in profit upon trading past its1390 target, along with recently elected counter-trend entries, which opened long positions on Wednesday from the 1327 level.
Flush with abundance in short-term profits by weeks-end, and despite odds of further highs in the days ahead, we are now suggesting a more defensive posture for our short-term clients.
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Origin of Elliott Wave Theory
In the late 1920's, Ralph Nelson Elliott, an astute, well respected, highly sought after businessman, developed what is today widely accepted as the broadest, most comprehensive, and compelling theories in the behavioral, and mathematical study of financial markets.
Through his hidden genius, and keen observation, Elliott labored incessantly in a quest to quantify that price fluctuations in the broad stock market, (previously accepted to behave in chaotic or random fashion) exhibited a hidden, consistent, and predictable order. He aptly described such repetitive price fluctuations as "waves”.
He concluded that a fractal order, or repetitive cycle, expressed a broad reflection of investors’ collective, varied, and vacillating emotions. The sequential price patterns he identified, particularly those, which mark terminals at Cycle Degree and higher, are in effect, historical footprints, revealing precisely what stage of dynamic advance, or pause, that markets have recorded throughout the entire course of financial history.
Through his tenacious effort in the identification of sequential patterns at (9) varying degrees of trend, along with an organizational set of tenets, and guidelines, ultimately leading to a thorough cataloging of his findings, Ralph Nelson Elliott achieved the seemingly impossible. Not only did he succeed in quantifying that markets do indeed trade in repetitive cycles, but he left behind numerous journals of his extraordinary achievements as a precious gift for future generations.
The Treasured Gift
For this gift of uncommon knowledge, we must impart full tribute to the efforts of Robert Prechter, and A.J Frost, who in 1978, collaboratively assembled and co-authored interpretation of Mr. Elliott’s work in the first printing of the "Elliott Wave Principle" Key to Market Behavior.
Frost & Prechter’s translation of Elliott’s' Masterworks can be described as nothing short of a brilliant expose, replete with market gauging principles based on dynamic symmetry, rooted in mathematical law, and unbeknownst to Elliott at the time, in full confluence with every element of Fibonacci’s Summation Series at its core.
The fractal nature of Elliott’s' repetitive dynamic wave formations provides us with a richly textured and unique perspective as to the historical significance of all developed data series. The tenets convey to us with high probability, just how such history is most likely to have meaningful consequence on the present and future course of human endeavor.
Conclusion
In broader philosophical context, the historical study of capital markets through the lens of Elliott Wave is a most fascinating way in which to recognize, document, record, and most importantly to “anticipate" various stages of progress, downfall, and recovery across the whole of humankind.
The practical application of Elliott Wave Theory is unique in that no other method of technical analysis provokes deeper thought, retrospection, or fosters a rebirth of enlightenment imparted through the wisdom of ages. Nor does any other method of analysis provide comparable models for framing, monitoring, and formulating dynamic probability forecasts for current and future market conditions.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F0422.html&title=%22Facts%20Are%20Stubborn%20Things%20Part%203%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2004%2F22%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3b6accdd6f1f49/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Spring Break-Downby Joseph Russo, Elliott Wave Technology | May 12, 2008Print Financial Sphere & Fed Gone Wild / cost, well over $500 Trillion in notional derivatives
With no apparent end in sight to their omnipotent magical power, as you watched our fascist-like fed usurp ever-more control over the financial sphere, were you impressed enough to trade-long shortly following their lead in contriving the spasmodically incessant rally from the March lows?
- We were.
With stammering Hank and Uncle Ben’s “all-in” guarantees to cover your long-butts, did you buy completely into a la-la land bullish frenzy that would launch equity prices straight up the their old highs?
No? Didn’t think so, - we didn’t either, and that’s a good thing.
Knowing when to hold ‘em or fold ‘em / cost, $Tens of Thousands in learning-curve dues
Although we positioned long for good chunks of the run, by no means did we buy into it completely. Going forward, there are a few things to keep in mind however. One, is that; it ain’t over till’ it’s over. Secondly, we did not get this far without some battle scars along the way. Finally, one should never expect perfection in this type of endeavor. Furthermore, taking pre-determined losses are very much a part of an overall long-term winning strategy.
What Next / cost, risking jail-time for blackmailing members of the working group
For now, the jury remains out on this unprecedented intervention. We will be working intently over the summer to assess the markets deliberation towards verdict on the durability of the feds deplorable self-rescue efforts.
Our next tasks are to monitor for a renewed summer rally following this recent spring breakdown, and to observe signs for a resumption of bear market declines amid a potentially serious affliction of the summertime blues. It should not be too long before we get handle on which direction these coming headwinds are most likely to blow.
Markets Waiting to Exhale / cost, $60 Billion straight away give or take
For many, we assume it appeared that the fed-led intervention rally would just keep on going like the energizer bunny. We suspect many were certain that the rally would eventually fizzle out, but did not know when, or where to position orders to protect long side trading profits, or reverse short to capture the inevitable pullback.
If you were in either camp, you shouldn’t feel too bad. The rally off the March low was rather complex, elegantly seductive, and difficult to interpret by design. Whatever you do, don’t get mad – simply get even.
After imposing an authoritarian 50% retracement on the dime of taxpayers, the dynamic duo and their global “working group” apparently achieved some level of comfort in easing off the national emergency, bullish-bid-offensive essential to preserving their sacred monopolies.
Fear not bulls, fascist backstop subsidies will return with statist intervention whenever necessary, and at any cost. That you can count on - in the meantime...
Nailing a Near-Term Complacent High / cost, just $75.00
Realizing our divine masters had achieved an appropriately safe level of lift following 8-weeks of unprecedented intervention in the supposed free market, we were fully prepared for this week’s rather tricky and sudden decline.
Patiently tracking the fascist-like propping-up of equity markets from the March lows, our proprietary timing, sentiment, and momentum models began sounding a confluence of alarms upon the Dow’s strike-high of 13132 on May 2.
On Friday May 2, our Near Term Outlook signaled a key-pivot counter-trend short position in the Dow against the 13132 high. Proprietary standing criteria elected short positions at 13047, just 85-pts from the top tick.
One week later on Friday May 9, standing proprietary interim-pivot criteria alerted select traders to exit shorts at 12734 near the close, booking over 300-pts profit. (Or $3,000 dollars in profit for each full-size futures contract traded)
Many Caught with their Shorts-Off following Tuesday’s recovery / cost, $3,000.00
If you were certain another high was sure to follow coming off Tuesday’s impulsive recovery rally from the 12863 low, it is likely that you were not alone in such reasonable assumption.
If you lifted shorts, or got caught off-guard after Tuesday’s five-wave impulse rally, which then followed such bullish price-action with an unusually rare sell-off, we suspect you had an abundance of good company.
We presume that this was the precise intent of the prevailing price-action. We consider this type of price-action the rather fine art of “working group” chart painting-101.
However, if you were privy to viewing our real-time interpretation of the price action at hand, you would have acquired an alternate perception as to what was really going on in the familiar trading arena of cunning and deceit.
What, you ask?
How can a five-wave advance be corrective! How is it that a five-wave impulse is supposed to be able to crest a corrective ‘b’ wave terminal? How can this be a proper Elliott Wave count?
We will show you how.
The chart below provides clear illustration of fully conforming tenets of Elliott Wave structures. Do feel free to email us in sharing any opposing views.
Hearing Mayday, Mayday / cost, a mere $75.00
As if the market is not difficult enough to forecast and trade, the shenanigans of working group antics can make it even more deceptive.
Tuesday was one of those days where statists executed chart painting-101 flawlessly. They may have fooled the many, but they did not fool the few, at least not the few who subscribe to our service.
Yes, a five-wave advance can be corrective, and yes, five-waves up can terminate a “b” wave at one larger degree.
The chart below meticulously illustrates the culmination to our dynamic interpretation of wave structures from the get-go print-high of 13132.30 on Friday 2-May.
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Short-Term Bull-Trap / cost, $3000.00
In contrast to the choppy corrective decline from the 13132 high, the sub-dividing five-wave impulsive advance from the low on Tuesday led many to believe another fresh high for the move was sure to arrive.
The dead giveaway confirming our “take nothing for granted” count was the markets failure to hold and rally from the noted .500 and .618 common retracement levels arrowed with question marks in the chart above.
The chart below, extracted from the NTO archives from Wednesday illustrates our real time observations. As the price action unfolded, and without the benefit of hindsight, we were one-step ahead of the creative chart-painting antics of the most cunning adversary’s on the planet.
At this stage of our analysis, we already had counter-trend shorts on from the 13047 level. To bolster our Key-Pivot counter-trend position, following the bull-trap five-wave advance toward the -b-wave high near our 13040 break-even point, a shorter-term trade trigger hit a resting target at 12835 into Thursday’s surprise sell-off.
Fridays follow through selling sent price beneath our next downside capture window spanning the noted 12776-12747 range. Additionally for select traders, proprietary criteria also provided another exit or potentially early reversal signal near the close at 12734. All told, we clearly got the better of the battle in the previous week’s trade.
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We intentionally did not include the accompanying 30-minute price-chart for the archived text below. In the interest of fairness to our clients, we consider displaying proprietary larger degree terminals, and specific trade-triggers or chart notes, a potential compromise of integrity to longer duration open positions held by NTO traders.
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An accurate forecasting toolkit of visual price charts and commentary - PRICELESS
Whether one is trading a personal account, or moving substantial size as a professional trader or manager of funds, an abundance of work and preparation must be acquired, and diligently maintained toward assuring a positive outcomes to such complex and challenging endeavors.
Amid the zero-sum terrain of “winner-take-all”, it is nearly impossible not to form bias towards ones analytical conclusions, embracing strongly in the belief that the desired outcome of preference regardless of one’s size/time horizon – will pan out as planned.
Although a variety of effective tools and vast pools of institutional resources may be readily available to traders and professionals alike - one should nonetheless seriously consider the benefits of cross-checking ones work, perceptions, and assumptions with that of an alternate reliable source of study.
At worst, ones conclusions and assumptions will confirm. At best, one may discover additional areas from which to profit, and/or to see relevant alternates that may not have been considered or factored into one’s current analysis.
Come spend the summer with Elliott Wave Technology…
…And you may never again trade the indices without us-
The express focus of Elliott Wave Technology’s charting and forecasting services is to keenly observe, monitor, and anticipate the future course of broad market indices over the short, intermediate, and long-term.
Each broad data-set under study, whether an intraday 10-minute price chart, or a yearly bar chart spanning hundreds of years, is assessed by its current and historical face-value regardless of composition changes, or underlying currency dynamics.
We vigorously observe standard charting protocol, in concert with classic application and adherence to the exceptionally accurate navigational benefits provided by the proper application and classic tenets of Elliott Wave Theory.
Although Elliott Wave Theory is by no means a trading system, it is the best tool - bar-none, from which to anticipate directional guidance accurately across all time horizons.
E-mail us for information on upcoming introductory rates and specials.
Services:
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One last thing to remember, never fight the fed nor trust them either.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F0512.html&title=%22Spring%20Break-Down%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2005%2F12%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3b72d58e13d72c/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Transports Hitting All-Time Highsby Joseph Russo, Elliott Wave Technology | May 19, 2008Print Before we begin our look at the roaring Transportation average, we would like to return your attention to our previous week’s article entitled “Spring-Break”. Last week’s piece did a fine job of calling a precise short–term tradable low in the Dow.
Below we re-present the chart from last week’s article.
Within that article, previous guidance suggested, “For select traders, proprietary criteria also provided another exit or potentially early reversal signal near the close at 12734.” The follow-up chart illustrates how the reversal signal turned out to be a rather precise one, and by no means early.
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The chart below shows what happened in the Dow following the SAR (stop and reverse long) signal at the close of 9-May. If no one else did, at least the market heeded our call, and that is all that matters to our active trading clientele.
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We continue to monitor and reconcile the Dow’s wave counts, price targets, and turn-dates for NTO traders. This week however, we wish to draw readers’ attention to a quick study of the Transportation Average from an Elliott Wave perspective.
Beam ‘em Up Scotty
Since the January 2008 low, it appears that an invisible hand has slid the ships transporter lever to “energize” status in the Transportation Average. Suddenly leading the renewed bullish charge, the Transports are striking fresh all-time highs. Whether the charge is one of sustainable new leadership or one of false prophets will soon reveal itself in the near-term price action.
Amid the backstop of intervention, there is no doubt that a rising level of complacency has returned to many equity indices. Whether such complacency will return to the sheer bullish arrogance of day’s past is a bet the bulls hope to win. In the interim, we will let the price action guide us through such deliberations.
Standard Analytical Format @ EWT (Elliott Wave Technology)
Since we do not cover the Transports in any of our subscription services, we thought it prudent for both our clients and broader readership to gain a quick Elliott Wave perspective on the roaring Transports.
Considering their leadership in striking fresh historic highs, either the balance of the lagging majors will follow, or the Transports will soon buckle and come tumbling down to join their brethren indices.
As we do with all markets covered in our publications, we will begin this quick scan of the Trannies from the longest time horizon and work our way down the shortest.
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We hope that you might benefit from, and have enjoyed this rather quick look at the Dow Jones Transportation average. At some point in the future, we shall provide an update to this article to see how things are shaping up for the Trannies.
Our daily coverage of the Dow, S&P-500, and NDX-100 is much more exhaustive than the basic five-chart format presented above. In addition to the above, we also include turn-bar studies, 60-minute, 30-minute, and 10-minute price charts complete with a full array of price targets, and counter-trend trade entry alerts.
Come spend the summer with Elliott Wave Technology…
…And you may never again trade the indices without us-
The express focus of Elliott Wave Technology’s charting and forecasting services is to keenly observe, monitor, and anticipate the future course of broad market indices over the short, intermediate, and long-term.
Each broad data-set under study, whether an intraday 10-minute price chart, or a yearly bar chart spanning hundreds of years, is assessed by its current and historical face-value regardless of composition changes, or underlying currency dynamics.
We vigorously observe standard charting protocol, in concert with classic application and adherence to the exceptionally accurate navigational benefits provided by the proper application and classic tenets of Elliott Wave Theory.
Although Elliott Wave Theory is by no means a trading system, it is the best tool - bar-none, from which to anticipate future price direction most accurately across all time horizons.
Should one have interest in acquiring access to our long-term technical analysis and/or utilizing our proprietary short-term market landscapes, we invite you to visit our web site for more information. For immediate access to our broad market coverage in all time-horizons, one may subscribe directly to the Near Term Outlook.
One last thing to remember, never fight the fed nor trust them either.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F0519.html&title=%22Transports%20Hitting%20All-Time%20Highs%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2005%2F19%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3b7e9e1c176f82/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Playing the NDX Like a Fiddleby Joseph Russo, Elliott Wave Technology | May 28, 2008Print Before we illustrate our total command over the NDX of late, we wish to provide you with a brief update to our previous week’s assessment of the Dow Transportation Average.
In brief, the update of the hourly Transportation average below exemplifies precisely how dynamic Elliott Wave architecture adjusts in accordance with real-time price action.
The hourly chart from a week ago noted prospects for an ending pattern to chop the Transports higher amid a suggested slowing in the rate of advance.
However, the fever-pitch reversal-high last Monday, and the pursuant downside carnage breaching the 5250 level by weeks-end - violated conformity to that ending pattern, forcing immediate adjustments to the unfolding wave count, and setting the stage for monitoring critical support above the 4800 mark.
All told, the wave structures (and alternate 3-wave peak) outlined below, reflect our latest assessment of the advance off the January lows.
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SHORTING A TRADABLE TOP IN THE NDX-100
Wednesday, 14-May:
Just three sessions before its print high of 2050.79, we continued to monitor a suspected ending diagonal pattern in progress from the start of the month. We wish to draw your attention to Wednesdays high of 2028 relative to our upside price target of 2050 boxed in green. Of added note, is what appeared to be a classic upside gap-closing 30-pt reversal day to end Wednesdays session at 1997.30 – leaving us over 52-points from our standing upside price objective for wave –v- to complete the pattern. If our analysis proved correct, we postulated that once wave –v- terminated, the NDX would fall like a stone toward the 1960 level.
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Monday, 19-May
Following the anticipated high jinks surrounding Wednesdays “false” reversal day, we quickly narrowed the boundaries to our ending diagonal pattern. In doing so, this shifted the terminal of wave –iv- to Thursdays print low on 15-May as illustrated below. Following Mondays 2050.79 print high, another fever-pitch reversal took place into the close. After nailing the EXACT TOP within .79-cents, we calibrated an imminent downside price target of 1968 by Mondays close. On this date, we also added a projected “time” at which such a low would most likely occur. We conveyed this projection of “time and price” to members in our Monday Evening Post. The timing for this low was circled with a question mark, 4-days in advance for the 23-May, 27-May time period to deliver the NDX toward the 1960-level – with a firm target of 1968 cited.
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Friday, 23-May
There is no better way to start a long Holiday weekend than with a stellar week of hard-earned trading profits! Elliott Wave Technology OWNED the NDX all week long, much like we take ownership of all the markets regularly covered in our publications. Perfection with this level of precision is rare, but does occur with a level of routine regularity, which obliterates chalking up such outstanding achievements to chance. By Wednesday 21-May, we had also added a downside price objective “window” which began at 1950. As illustrated below, we delivered the NDX to our readership on a silver platter. All of our downside price and time objectives arrived right on time.
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Come spend the summer with Elliott Wave Technology…
…And you may never again trade the indices without us-
The express focus of Elliott Wave Technology’s charting and forecasting services is to keenly observe, monitor, and anticipate the future course of broad market indices over the short, intermediate, and long-term.
Each broad data-set under study, whether an intraday 10-minute price chart, or a yearly bar chart spanning hundreds of years, is assessed by its current and historical face-value regardless of composition changes, or underlying currency dynamics.
We vigorously observe standard charting protocol, in concert with classic application and adherence to the exceptionally accurate navigational benefits provided by the proper application and classic tenets of Elliott Wave Theory.
Although Elliott Wave Theory is by no means a complete trading system, it is the best tool - bar-none, from which to anticipate future price direction and amplitude across all time horizons.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F0528.html&title=%22Playing%20the%20NDX%20Like%20a%20Fiddle%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2005%2F28%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3b8b1a6d272a53/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Strategic Command and Controlby Joseph Russo, Elliott Wave Technology | June 2, 2008Print Traders Quandary in Finding a Consistent and Accurate Edge:
When considering the implied benefits of obtaining exclusive-access to a self-proclaimed, highly accurate charting service, (of which we are one) how is one to make heads or tails in turning the professed profit-packed price-charts into an actionable trading plan?
Although we receive tons of regular praise for our exemplary charting and forecasting acumen, a small but relevant percentage of users share that despite such excellence, they could not come up with an effective strategy to take advantage of our incredibly accurate price-chart landscapes.
We suspect the primary reason for such feedback is that this group of participants does not instinctively know how to apply the explicit mapping information displayed on each of our price charts. The missing ingredient for this contingent of traders is the challenge of conceptualizing and implementing tactical strategies that will align with one or more of our charts noted prospects.
As in the marketplace, and adding to this challenge, our charts point out all of the natural conflict inherent among the various strategies actively engaged in open trade. One strategy may be actively seeking to bullishly scalp 10-lots-long a defined trade-trigger targeting 10-S&P points in the next several HOURS, while another will be concurrently flat the same, and bearishly preparing to execute a counterintuitive swing trade strategy, which seeks to capture anywhere from 20-50-S&P points over the next several DAYS.
Once one grasps the logic, simplicity, and power of our charting protocol, they will find that our blended-approach to charting future price-movement is very trader-friendly, strategy specific, and designed to serve without bias, a wide variety of proven trading disciplines across all time horizons.
Case in Point:
For example, back on Friday 16-May, counter-trend swing-trade strategies were on alert to deploy specific criteria in electing short positions against a forever-rising S&P since the March lows. At the same time, very short-term momentum traders employing a directional trade-trigger strategy, had the boundary lines and projected point-values to speculate on aggressive long positions from 1425 seeking a quick 10-pts of upside profits.
Below, we illustrate the immediate outcome to both strategies in the following sessions chart on 19-May, which shows our short-term bullish momentum trader quite pleased with his or her pre-planned 10-pts of profit. In addition, we quantified confirmation of short-entry for the bearish counter-trend swing- trade strategy, in which sell-probes elected at 1429. Surely, one with a great deal of experience and versatility could have made both of these trades however, it is likely that most simply focused and aligned their orders with one specific strategy or the other. One bullish, one bearish, and both successful, containing all of the essential information to execute plans well in advance, and all on the same price chart.
We also wish to direct your attention to the array of downside price-targets, and point-values already present on Monday’s chart. Furthermore, we had also postulated that a small degree –c- wave decline was in progress, and provided a downside price projection-window for its terminal designated as wave “a” at one larger degree. Granted, though we have cleaned up the archived original to place special focus upon these two specific examples, the uncut chart displayed the all-of the precise information highlighted below.
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Relevance to Consistent Long-Term Success:
Our unique method of charting monitors the entire spectrum of evolving strategic trade set-ups and outcomes across all time horizons and trading disciplines. Totally consumed in monitoring the progress of all active trading dynamics, we could not possibly consider trading the market ourselves without severely compromising the express focus and impartiality essential to our task.
The majority of our clients instinctively weed-through what would otherwise appear to be conflicting signals, and key off only those that are relevant to executing their individual trading strategies safely and profitably. However, there exists another contingent of traders who appear to have a great deal of difficulty distinguishing one strategy from another. It is this contingent of participants, whom we care about most deeply.
These are the “little guys.” The ones who always get their heads handed to them by the bully’s dominating at the winner-take-all playground of speculation. Part of what drives us to work so hard every day, is the satisfaction we get in providing a daily arsenal of weaponry, empowering a growing army of David’s’ to triumph repeatedly over the endless stream of Goliaths he or she is certain to encounter on a regular basis.
Regardless of time horizon, style, or risk tolerance, without a focused tactical strategy for execution aligned with a well-conceived roadmap of relative price-direction, one will surely lose the bulk of their trading stake in no time flat.
SOLUTION:
In our never-ending quest to empower users, we have assembled clear guidelines for eight simple-to- understand trading disciplines, which we have designed specifically to take optimal advantage of our proprietary forecasting methods. These eight profit-packed trading disciplines are graded blends of extremely slow moving, and very fast moving strategies. Many of the strategies complement one another, and are ideal for use by large trading teams or individuals, while other disciplines are contrary in nature. The general guidelines for each of the disciplines are now included for continual reference in all of our NTO publications.
On the Money – Day In, and Day Out
Our last four charts will provide up-to-date example in following the performance and outcomes of our strategy-specific trade-oriented charting of the S&P through the end of last week.
RESOLVED: Wednesday, 21-May:
The first item of interest in this chart relative to the last is the successful price-target captures highlighted from the previous array of targets provided in advance. Each of the three down arrows, mark the specific boundaries where those employing trade-trigger strategies, had advance knowledge of actionable opportunities to sell the market with definitive point-values or price-targets defined clearly for each strategic entry.
Notice how the S&P began to consolidate, hold steady, and attempt to rally upon trading within the 1418-1409 range, which was the precise span of our short-term price projection window (noted well in advance) on the previous chart above.
Perhaps of most relevance, is the circled blue up arrow noting 17-pts of upside risk. Our constant engagement and forward vision of price action were three-steps ahead of the market in beginning to alert those wishing to deploy a counter trend trade-trigger-strategy of a pending buying opportunity setting up, all while the S&P was spinning out of control in its third day of free-fall, and nowhere near its bottom!
Such information, despite its apparent conflict, can be of extreme value to those short the market, managing recently elected swing-trade strategies. Although the short-term swing-trade strategy has specific entry and exit criteria void of association with trade-trigger strategies, gaining peripheral knowledge of what other participants are acting upon throughout the entire spectrum of tactical engagement, provides tremendous ancillary benefit for those who may be executing conflicting strategies.
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RESOLVED: Friday, 23-May:
Following a second attempt to consolidate and rally on 22-May, the upper-boundary of our Elliott channel rejected this advance. The market then repeated the very same fractal (–a- -b- -c-) pattern in affecting another leg down. However, in this instance, the low on 23-May failed to test the lower Elliott channel of support.
After alerting swing-trade strategies to prepare for pending exit or SAR queues the day prior, on 23-May, proprietary tactical exit/SAR criteria was met, and swing-traders holding short positions either exited with a whopping 54-pts in S&P profits, or took similar profits and SAR’d (Stopped, and Reversed long).
Perhaps of most importance on this chart, is the attention we brought to all strategies of the likelihood of a marginal new low or retest calibrated to the 1373 level. Comprehensive advance information of this nature alerted those whose strategies called to SAR long, to expect a specific level of drawdown against their newly established long position. With this foreknowledge and insight conveyed in advance, those executing various strategies can determine how wide to set stop-losses, and if such levels are acceptable to their risk/reward matrix.
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RESOLVED: Wednesday, 28-May:
Before we speak about our next chart, we should note that we utilize 10-minute price charts to provide magnification of the short-term price action. 30-minute price bars are the every-day charts of choice from which we convey all short-term signals, and display the larger Elliott Wave Terminals believed to be in progress. We then use daily charts for monitoring longer-term slower moving signals and strategies.
The chart below first describes the buy-side trigger entry strategy, which we made known a week in advance as depicted early on in the second chart from 21-May posted above. Of added interest is the noted calibration of fresh marginal lows to 1373.
As you can see, this trade-trigger strategy did experience 7-pts of immediate and anticipated drawdown post election. Sure, with the benefit of hindsight one could have waited for the marginal new low to occur in order to gain a better entry exactly at the bottom, however in the real world, there are no guarantees that such a retest would occur – only a modest level of anticipatory probability. It is for this reason, (no hindsight is available in real-time) that adhering to the disciplines defined in a well-conceived strategy, must be respected win, lose, or draw.
Circled in purple, is an occasional exercise we endeavor to partake in every so often. Based on our read of the wave structures at the smallest degree, we project forward the balance of anticipated terminals expected to follow the pattern through completion.
In our Evening Post for 28-May, we were observing prospects for an emerging impulse wave to the upside in its perceived third wave of advance. Prior to Thursday’s open, we set forth projections for the anticipated amplitude of the third-wave in progress, along with a retracement price for the 4th wave down, along with projections for a both a typical and extended fifth wave that would terminate the larger ‘c’ wave-up believed to be underway.
We display the results of this random exercise in our very last chart.
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Conclusion:
Our last chart-outcome below should speak for itself. We trust at this point that our message is clear. Patience, discipline, and a predetermined strategy of adherence in alignment with an essential edge of reliable forward-looking price projections are the most critical elements to profitable speculation and investment in all time-frames.
We continually monitor and anticipate market direction, status, and reactions to all active trading strategies with the near efficacy of Doppler radar predicting tomorrow’s weather. However, we do not make recommendations to buy or sell, nor do we instruct individuals as to the management of each trade actively observed. What we do report on with alarming accuracy, is the full spectrum of trade dynamics relative to the current market structure as it relates specifically to the optimal execution of proven trading strategies.
Bear in mind that there is no perfect strategy. Contained losses are just as much a part of a successful long-term trade-plan as the big-wins that register mega-profits to ones trading account. However, navigating markets without an applied strategy and relevant edge is akin to driving blindfold on a bridge half-complete.
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Come spend the summer with Elliott Wave Technology…
…And you may never again trade the indices without us-
The express focus of Elliott Wave Technology’s charting and forecasting service is to anticipate price direction and the future course of broad market indices over the short, intermediate, and long-term.
Our unique blend of proprietary charting protocols are delivered daily with the express intent to convey timely information that strives to anticipate, monitor, calibrate, and observe market impact relative to a multitude of proprietary signals and triggers generated, which are in alignment with disciplines associated with eight distinct, and clearly defined discretionary trading strategies suggested by the author.
Should one have interest in acquiring access to our long-term technical analysis and/or utilizing our proprietary short-term market landscapes, we invite you to visit our web site for more information. For immediate access to our broad market coverage in all time-horizons, one may subscribe directly to the Near Term Outlook.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F0602.html&title=%22Strategic%20Command%20and%20Control%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2006%2F02%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3b92c834724b4b/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Big Bang or Bustby Joseph Russo, Elliott Wave Technology | June 9, 2008Print Two Sides to Every Argument:
From an Elliott Wave perspective, one can argue with good cause, that the Dow Jones Industrials are en-route toward retesting the depths of their 2002 bear market lows. The magnification of weekly closes from the October 2007 top, display a textbook series of impulsive declines at three degrees of trend. Case closed:
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Objection:
Bullish perspectives also remain plausible. The bullish argument, backed by 34-years of stunning accomplishment from the depths of their 1974 bear market lows, the Industrials show no sign of structural breach at their largest degrees of trend - at least not in nominal terms. Case closed:
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The Grand Jury at Super-Cycle Degree Denied this Hearing:
The argument as to which wave structures prove to be correct is irrelevant. What is relevant is the fact that such possibilities exist. Given that guidelines to these distinct structures are identifiable, the means by which one respects their evolving message is of utmost relevance and practical utility.
Two Sides to Every Trade:
Elliott Waves are on neither side of any trade, tactical market orders are. As we attempted to convey in Strategic Command and Control, wave-counts play a minor role in executing trade and investment strategy. What govern successful strategies are respected disciplines together with tactical deployment of speculative capital that responds to real-time price action regardless of ancillary wave guidance. Wave counts serve only as a general guide in monitoring which outcome currently has the upper hand
Wave Counts and Trading:
The take-away is this: Although exquisite and impressive in both hindsight and real-time, Elliott Wave analysis serves only in providing forward vision to several plausible paths the market will take in its dynamic evolution, especially at the largest degrees of trend. By effectively monitoring guidance systems of this profound nature, one can then begin to develop investment and speculative strategies to profit smartly from the vast array of endless possibilities the wave structures will inevitably adopt. Defined clearly, strategy-specific rules of engagement together with accurate wave guidance will soon have one trading like a Spartan Warrior.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F0609.html&title=%22Big%20Bang%20or%20Bust%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2006%2F09%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3b9be0542846e5/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Cash-Out, Start Trading, Or Languishby Joseph Russo, Elliott Wave Technology | September 9, 2008Print Semi-Generational Long Haul is Toast:
For one reason or another, Fibonacci time intervals of 34-units have maintained an excellent record of accomplishment over the past 150 years in identifying semi-generational peaks and troughs in the major equity indices.1857-1891, 1932-1966, and 1974-2008 each represent 34-year long-haul bull market runs, all of which ended with 3, 5, or 8 years of bear market declines.If 150-years of pristine history are any guide, the current bear market will (at minimum) continue running its course through 2011, 2013, or 2016 prior to an absolute low marking its eventual bottom.
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Low-to-Low cyclical bottoms:
In the above secular chart, we have identified three low-to-low cyclical time spans.The earliest spans 39-years from the low in 1857 to the low in 1896.The second spans 36-years, from 1896 to 1932, and the last is currently underway from 1974 through some unknown year in the future.Using 117-years of previous history as a guide, we can extrapolate the future low-to-low point from 1974 as one of the three historical references illustrated arriving at 2010, 2013, or 2016 for a postulated bottom.Combined with the similar 3, 5, or 8-year cyclical peak to trough downturns identified in the paragraph above, we attain further historical precedent in confirming the potential duration of the current bear market.Beyond duration, amplitude is a topic for future deliberation despite a Dow target of 5267 in 2013 seeming a highly probable bottom at first glance.Of added concern is the prospect and plausibility of this magnificent 150-year old secular bull morphing into an unprecedented secular bear amid intervening cyclical bulls.
Longer-Term Position Traders/Investors:
Now that the “good times” are clearly well behind us, how does one remain actively engaged in broad markets without falling victim to flat returns or substantial loss of amassed profit over past decades?Worse yet, how does one cope in the event of a secular generational bear market?First, one must protect capital and amassed profits from long-term downside risk.Secondly, one must decide whether to actively short the market to profit on the downside, or simply get out of harm’s way and into safe interest baring cash equivalents.Sounds simple enough however, for proactive participants, this is much easier said than done.Timing ones exit and entry in such endeavors can make or break one’s entire strategic purpose.
Keeping an accurate pulse of the market place on a daily basis can be a grueling if not frustrating endeavor, especially for those who may not be inclined to read the technical tea leaves with proficient consistency. In our exhaustive mastery surrounding the technical architecture of the markets, as well as the entire strategic landscape relative to tactical trading protocols, we are now offering new and improved dispatch of our Near Term Outlook.Elliott Wave Technology’s charting service provides a broad array of users with unique insight to a blend of tactical trading strategies, which serve every level of time horizon and risk tolerance.
To employ these proprietary strategies effectively, one must be fully acquainted with our NTO Essentials File, which is a dynamic fixture in the member’s area.
How it’s delivered:
The following two charts reflect monitoring of slow moving counter trend and trade trigger strategies geared for longer-term position traders:
Prior to violating its 1st wave crest @ 11047.76, the chart below takes us back to May of 2008 when the Dow still maintained a plausible 4th wave downward correction posture prior to losing its bullish status in printing fresh new lows beneath 11000 in July.The Near-Term Outlook had already positioned long-term traders on the defensive back in October of 2007, and was now issuing a secondary sell signal despite bullish prospects of an imminent 4th wave basing terminal.Remember, Elliott Waves guide, they do not dictate.
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Below is a brief excerpt from the NTO dispatched for May 20, 2008.
Near-Term Outlook for the Dow:
(For 20-May 2008)
The orange down-arrow in our lower momentum panel has confirmed KP/sell-probe campaigns against the 13136 high on 19-May.The bearish smaller degree “e” wave divergence signaled short-entry @ 13042- basis our 30-minute price-chart and basis the entry criteria clearly explained in our NTO ESSENTIALS file.
Though wave counts provide essential ancillary information, price action is the ultimate arbiter in procuring our proprietary brand of blended charting protocol.Note how the dynamic wave count shifted from the chart above to the chart below once concrete evidence of a key wave violation took place upon the fresh lows printed in July.
The momentum panel in the chart below reflects dated counter trend buy and sell signals for our slow moving longer term Key Pivot trading strategy.Following the first sell signal in October of 2007, the up and down arrows along with their respective notations reflect this charts history of elected long and short positions generated per this particular trading strategy.
Of added note are the numerous arrowed trade triggers, chart patterns, and point values resident on either side of the market.Each bearing a time/price sensitive trade strategy of its own, and provided for use in general strategic overlap and risk management relative to open positions on either side of the market regardless of strategic origin.Our shorter-term intraday trading charts provide similar strategic information, but at a much faster moving pace.
If one elects to remain exposed to broad based indices in the current market environment, it is advisable they attain suitable advisory and made aware of potential risks, along with optimal entry and exit parameters for active engagement.
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Below is an actual example of the NTO commentary provided twice weekly for longer duration index traders.We strive to maintain brevity in delivering our narratives with a brief relevant comment - commonly used abbreviations, and by breaking down strategy specific guidance and actionable occurrences by the paragraph headings illustrated below.
Near-Term Outlook for the Dow:
(For 5-September 2008)
NMC (no material change) from Wednesday’s 9-3 NTO comment, which stated:
Following last week’s attempted breakout above it, today’s sharp reversal from a strong head-fake open has the daily price action revisiting the edge of our shaded moving average bias.Failure to maintain closes above this average will not bode well for bulls over the near-term.
Todays Active and Pending KP Counter-Trend Strategies: (KP Strategy-Specific)
NMC / ANA (additional notes added): The additional KPD short positions elected in May have done phenomenally well and are seeking to add to positions at the next overbought condition.KPV CT strategies remain cautiously long from 7-14’s long-probe against the 10827 low.Near-term momentum has turned bearish and appears to be heading for a run at oversold on the daily chart-
Todays Newly Activated KP Trade-Triggers / New Price Target Captures:
Today’s sell-off tripped KP sell-triggers at price-actions downside cross of the lower pennant boundary, which now defends the 10900 target as noted.No new price target captures have occurred at the KP level per today’s chart.
Todays Newly Suspended or Reclaimed KP Trade-Trigger Targets:
Until we get a print below the associated pivot low from which it spawned, the bullish 12023 remains defended at S-1’s falling trajectory.
Discretionary Set-ups and Tactics for todays Pending KP Trade Triggers: (KP Strategy-Specific)
Beyond those that have already elected, there are no set-ups per todays chart.
The balance of trajectories, targets, point-values, wave-labels, and alternates remain as noted.
Short-Term Active Traders:
In a class of their own, active short-term traders seek to constantly profit from swings of varying size and strategic origin.Be they counter trend in nature or momentum driven, our Near Term Outlook and accompanying Evening Posts provide daily insights into eight strategy specific trading disciplines, complete with entry criteria, stop, and exit targets.To employ these proprietary strategies effectively, one must be fully acquainted with our NTO Essentials File, which is a dynamic fixture in the member’s area.
How it’s delivered:
The following two charts reflect monitoring of extremely fast moving counter trend and trade trigger strategies geared for shorter-term and day traders:
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Provided daily for short-term index traders, the chart above and commentary below is the actual information dispatched from the NTO’s Wednesday Evening Post for 9-3-2008.Again, we strive to maintain brevity in delivering our narratives with a brief relevant comment - commonly used abbreviations, and by breaking down strategy specific guidance and actionable occurrences by the paragraph headings illustrated below.
Todays Active and Pending Tactical Considerations: (Strategy-Specific)
NMC/ANA:Relative to its 2nd wave (see the hourly closing data chart), time is running out of harmony in terminating a complicating 4th wave.Again, we would need to see strong downside impulsive follow-through toward the July lows to terminate the larger (a) wave down.
MANIC-Versatile (MV-counter trend)
Booking over 200-pts in profits - AGAIN! - MV’s SAR’d (stopped and reversed) long @ 11477, and are sitting on over 50-pts in additional open profit per the close.
Interim Pivot Versatile (IPV-counter trend)
IPV‘s are at their discretion, protecting well over 200-pts in open profits on recent shorts.As noted above, this strategy technically maintains its directional stance until a sufficient amplitude of momentum registers to set SAR entry criteria in motion.
Interim Pivot Directional (IPD-counter trend)
IPD strategies remain short along with IPV’s as noted above.
Todays Newly Activated Trade-Triggers / New Price Target Captures:
As price crossed above the falling portion of S-1’s trajectory, a CTT buy-trigger elected citing 11630 as upside target.Unlike the S&P and NDX, the Dow failed to capture its noted downside TLB target of 11335 amid today’s session.
Todays Newly Suspended or Reclaimed Trade-Trigger Targets:
Aside from monitoring the efficacy of our proprietary shaded MA bias, nothing new per today’s price action-
Discretionary Set-ups and Tactics for todays Pending Trade Triggers:
Bearish proponents maintain ADT sell-stops resting at or beneath S-1’s rising trajectory in anticipation of a sharp 300-pt price slide from breach point.Bear in mind that such aggressive triggers are often traps in the making.
The balance of trajectories, targets, point-values, wave-labels, and alternates remain as noted.
http://www.financialsense.com/fsu/editorials/russo/2008/images/0909_clip_image009.gif
From the Near Term Outlook for Friday September 5, 2008
Todays Active and Pending Tactical Considerations: (Strategy-Specific)
As is often the case, what would ideally be a smaller 5th wave to complete a larger wave-1 has turned into a black hole selling event giving the appearance of an (a-b-c) corrective thrust.As such, more data is required relative to downside follow through and/or upside retracement structures to confirm variable wave counts.Apart from ancillary “Elliott” guidance, proprietary trade-triggers alongside counter-trend probe signals are capturing much of the recent price action adequately while also providing clear boundaries relative to early (counter trend) probe failures.
MANIC-Versatile (MV-counter trend)
Forced to cover recent long-probes, MV’s are preparing to try again PEC (pending entry criteria against the current thrust lower).
Interim Pivot Versatile (IPV-counter trend)
With over 500-pts in OPEN PROFIT, waiting for the oversold reading paid off handsomely for IPV’s now poised to SAR (stop and reverse) long PEC (pending entry criteria).
Interim Pivot Directional (IPD-counter trend)
IPD’s will take profits and get flat upon election of the first “pending” SAR long signal issued to IPV’s.
Todays Newly Activated Trade-Triggers / New Price Target Captures:
As price dipped beneath the tan portion of R-2’s rising trajectory, sell triggers elected citing the 11128 target which it now defends. Likewise for R-1 which has a rather bearish target of 10766. We have also noted a PROFITABLE DRAWDOWN FREE capture of the 11335 target.
Todays Newly Suspended or Reclaimed Trade-Trigger Targets:
None per today’s price action-
Discretionary Set-ups and Tactics for todays Pending Trade Triggers:
None beyond those that have already triggered-
The balance of trajectories, targets, point-values, wave-labels, and alternates remain as noted.
Two Sides to Every Trade:
Elliott Waves are on neither side of any trade, tactical market orders are.As we attempted to convey in Strategic Command and Control, wave-counts play a small role in executing trade and investment strategy.Governing successful strategies are respected trading disciplines together with tactical deployment of speculative capital that responds to real-time price action regardless of ancillary wave guidance.Wave counts serve only as a general guide in monitoring which outcome currently has the upper hand
Wave Counts and Trading:
Although exquisite and impressive in both hindsight and real-time, Elliott Wave analysis serves only in providing forward vision to several plausible paths the market will take in its dynamic evolution, especially at the largest degrees of trend.By effectively monitoring guidance systems of this profound nature, one can then begin to develop investment and speculative strategies to profit smartly from the vast array of endless possibilities the wave structures will inevitably adopt.Defined clearly, strategy-specific rules of engagement together with accurate tactical guidance will soon have one trading like a Spartan Warrior.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F0909.html&title=%22Cash-Out%2C%20Start%20Trading%2C%20Or%20Languish%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2009%2F09%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3ba4016cc1fd7d/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Definitive Guide to Tradingby Joseph Russo, Elliott Wave Technology | September 15, 2008Print The Ultimate in Tactical Price Forecasting – Bar None
When it comes to strategically trading broad market equity indices profitably, there is simply no match for Elliott Wave Technology’s Near Term Outlook. We respectfully challenge any short-term advisory or software generated algorithms to improve upon or better optimize the efficiency of tactical trading dynamics we dispatch daily for the Dow, S&P, or NDX.
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Undeniable Bear Market in Full Swing
In the last days of August, following an impressive 1000-point 10% rally off the July low, the Dow was making every attempt to best its August-11 high of 11867.
Trade # 1 on the above chart illustrates our last bullish trade-trigger citing an 11785 upside target prior to the bear reasserting itself with a rapid 750-point decline. As extracted from our archives, the exit target for that trade was within 5-points of the 11790 print-high that registered on September 2.
In the nine months following the all-time historic print high of 14198 in October of 2007, the Dow has done nothing but languish, providing explosive choppy rallies while recording a steady stream lower-lows and lower-highs with its larger footprints.
As is typical with most equity bears, declines are swift in nature, followed by smaller fractal bursts of higher-highs, and higher-lows. This type of price action tends to lure in buyers, promote the appearance of orderly declines, and sets forth the seductive promise of an eventual long-term bottom.
A snapshot of Long-Term Secular Trends
Below, we take a long-term secular look at four of the most essential sectors in the financial sphere. In general-order of importance, they are sovereign nations’:
Currency Strength and/or the quality/quantity of money supply Commodity Prices (In this case, represented by Gold) Long-Term Interest Rates, or the cost of funds [*]And finally broad based Equities or Stock Indices (represented below by the S&P 500)
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Overall, secular trends although (potentially disastrous in the case of the US dollar) nominally impressive, do not paint a long-term picture of confidence or stability. Considering the prospects no choice remains but to trade these markets as efficiently as humanly possible.
Human Efficiency
The six trades in our first lead-chart above, chronologically orders, a 16-day summary of phenomenal outcomes to short-term strategy-specific trade guidance extracted from the archives of our Near Term Outlook and accompanying Evening Posts.
Our lead chart simply summarizes “when and where” those trades elected, however the NTO charts along with the members-only “essentials file” lays out the strategy and tactics behind the “how and why” those trades elected.
Over the past three years, we have perfected the art of dispatching tactical trade set-ups and market forecasting into a consistent, impartial, and immensely profitable endeavor for those who take the required time, patience, and discipline to embrace it.
The express focus of Elliott Wave Technology’s charting and forecasting service is to help traders anticipate price direction and amplitude of broad market indices over the short, intermediate, and long-term.
We deliver this unique blend of proprietary charting protocol daily, with the express intent to convey timely and profitable information. Our daily reports impartstrategy-specific guidance, which strives to forecast, monitor, and calibrate market impact relative to a multitude of signals that are in direct alignment with eight distinct trading strategies set forth in the members NTO essentials file.
Regardless of one’s level of experience, users must allow sufficient time to become acquainted with the authors charting protocol, strategies, and tactical narratives prior to entering positions or developing modified discretionary trading strategies of their own.
If you trade in today’s increasingly uncertain and volatile markets, you need a reliable and consistent edge you can count on day in and day out. If you want the very best, there is no better short-term advisory than the Near Term Outlook.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F0915.html&title=%22Definitive%20Guide%20to%20Trading%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2009%2F15%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3bae1f39972275/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Sound Trading Tactics
Capture Wild Market Swingsby Joseph Russo, Elliott Wave Technology | September 22, 2008Print For Short-Term Traders; HUGE SWINGS = HUGE PROFITS
Amid colossal intervention efforts and unbridled attempts to manipulate markets, socialize losses, and control price levels, disciplined impartial trade executions conveyed through our blended strategic trade advisory continue to produce stellar short-term profits fully consistent with the large market swings inherent with such endeavor.
Epic Intervention is a by-product of larger degree (bear market) Elliott Waves
Despite the otherwise contrived appearance of manipulation and intervention, authority puppets in wishful control alongside the resultant manic price-action displayed, are merely following larger degree Elliott Wave scripts to a tee. Aware of this well in advance, the 1000-pt two-day (10%) reversal in the Dow came as no surprise to us at all; in fact, we were fully expecting such a move.
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When it comes to strategically trading broad market equity indices profitably, there is simply no match for Elliott Wave Technology’s Near Term Outlook. We continue to respectfully challenge any short-term advisory or software generated algorithms to improve upon or better optimize the efficiency of tactical trading dynamics dispatched daily for the Dow, S&P, or NDX.
What Next
We are confident that despite (more) emergency rule changes imposed by authorities - that markets will continue to trade and behave in nominal accordance with the inherent technical underpinnings that have always governed them. If such impositions artificially inflate prices over the near-term, so be it - the price action shall alert us to such well in advance.
There is nothing to fear but fear itself - after all, the entire financial sphere spawned from various forms of artificial assumption since its very inception. Until US military tanks roll up to the White House lawn and begin firing as the Soviets did back in the 90’s, you can bet your bottom dollar (no pun intended) that money will continue to flow vibrantly both in and out of trading accounts.
A snapshot of Intermediate-Term Cyclical Trends
Last week we looked at long-term secular trends. Below, we take an intermediate-term cyclical look at the same four essential sectors of the financial sphere. In general-order of importance, they are sovereign nations’:
Currency and/or supply of money Long-Term Interest Rate, or cost of currency Commodities (In this case, represented by Gold) [*]And finally Broad Based Equities or Stock Indices (represented below by the S&P 500)
http://www.financialsense.com/fsu/editorials/russo/2008/images/0922_clip_image002.gif
http://www.financialsense.com/fsu/editorials/russo/2008/images/0922_clip_image003.gif
Tactical Efficiency and Discipline
The four trades in our first lead-chart above, chronologically order phenomenal outcomes to short-term strategy-specific trade guidance extracted from the archives of our Near Term Outlook and accompanying Evening Posts.
Our lead chart simply summarizes “when and where” those trades elected, however the NTO charts along with the members-only “essentials file” lays out the strategy and tactics behind the “how and why” those trades elected.
Over the past three years, we have perfected the art of dispatching tactical trade set-ups and market forecasting into a consistent, impartial, and immensely profitable endeavor for those who take the required time, patience, and discipline to embrace it.
The express focus of Elliott Wave Technology’s charting and forecasting service is to help traders anticipate price direction and amplitude of broad market indices over the short, intermediate, and long-term.
We deliver this unique blend of proprietary charting protocol daily, with the express intent to convey timely and profitable information. Our daily reports impartstrategy-specific guidance, which strives to forecast, monitor, and calibrate market impact relative to a multitude of signals that are in direct alignment with eight distinct trading strategies set forth in the members NTO essentials file.
Regardless of one’s level of experience, users must allow sufficient time to become acquainted with the authors charting protocol, strategies, and tactical narratives prior to entering positions or developing modified discretionary trading strategies of their own.
If you trade in today’s increasingly uncertain and volatile markets, you need a reliable and consistent edge you can count on day in and day out. If you want the very best, there is no better short-term advisory than the Near Term Outlook.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F0922.html&title=%22Sound%20Trading%20Tactics%20Capture%20Wild%20Market%20Swings%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2009%2F22%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3bbd0e74c56a12/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Hope for the Bestby Joseph Russo, Elliott Wave Technology | October 13, 2008Print Bottoms’ Up?
Top down?It really does not matter now that the fat lady is singing at the top of her lungs.The ultimate effect however is yet unknown.One thing is certain; the era of corrupt 20th century capitalism is OVER.
We hope the outcome of this clearly telegraphed inevitable and avoidable crisis will expediently produce radical change that will bring about prudent and durable solutions for future generations.
The Elliott wave structures we alluded to in the article-link and chart below have adopted a clear path toward the most bearish of outcomes.
FromBig Bang or BustJune 9, 2008
From an Elliott Wave perspective, one can argue with good cause, that the Dow Jones Industrials are en-route toward retesting their October 2002 lows…Case closed…
CHART FROM JUNE 6, 2008
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How low can we go?
Given the present set of conditions, the chart below represents the worst-case scenario for a crash of standard proportion pummeling the Dow toward 3000 by years-end.Such a decline would equate to a near 80% decline over the course of 12-months, which is historically quite common for typical resolutions of this type.That said, all we can add is to hope for the best and prepare for the worst.
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Some Inevitable Cures
Accept HUGE losses – establish a solid floor in market valuations across all sectors of economy Re-think the practicality and necessities required of 20th capitalism – embrace durable change [*]Punish those responsible for treasonous stewardship of their oaths and mandates[*]Tear down and rebuild the corrupt and fraudulent monetary/political systems of banking and creditA snapshot of Long-Term Secular Trends
Below, we take a fresh long-term secular look at four of the most essential sectors in the financial sphere.In general-order of importance, they are sovereign nations’:
Currency and/or supply of money Long-Term Interest Rate, or cost of currency Commodities (In this case, represented by Gold) [*]And finally Broad Based Equities or Stock Indices (represented below by the S&P 500)
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F1013.html&title=%22Hope%20for%20the%20Best%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2010%2F13%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3bd0a903d06e50/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
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Revisiting the HUI (Gold Bugs Index)by Joseph Russo, Elliott Wave Technology | October 20, 2008Print Proof is in the Pudding
Due to our intense focus on the major broad based equity indices, we discontinued coverage of the HUI more than a year ago.In going through some routine chart maintenance, we came across an old long-term chart of the HUI, left fully annotated, but unattended for more than a year.
We were not at all surprised to find that after dusting off this old chart that our forecasting guidance maintained ALL of its anticipatory accuracy without the need to make one single change to our count.
A year and a half ago, we provided readers with the article linked below…
FromNavigating the HUIApril 23, 2007
From its Cycle Degree print low of 35.31 in November of 2000- measured to its print high in May 2006 at 401.69, the HUI has skyrocketed more than 1037% in 5½ years!In contrast, the Gold price itself has only appreciated 192% in the same peak to trough period.In our view, the HUI’s meteoric rise has topped, or remains in progress of terminating a first leg up of Primary dimension.Consolidations to date have yet to correct the 1037% Primary Degree advance in corresponding proportion.We suspect a proportionate correction may either take place later this year, or out as far as 2009 in confluence with a potential eight-year cycle low due in Gold.
CHART and Commentary to right FROM April 23, 2007
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The chart from April of 2007 (above) updated with price data through October 18 (below) exemplifies the forecasting power of properly applied Elliott Wave dynamics.
Where is the bottom for the HUI?
The first price floor for the large 2nd wave down resides at the (4) wave of one lesser degree at the 165.71 level.A second price magnet for wave 2 down is 175.27 or a 61.8% retracement of wave 1.If our count continues to maintain alignment with classic Elliott Wave tenets, the floor for Primary Wave 2 may go as low as, but should not exceed the 2000 print low of 35.31.
http://www.financialsense.com/fsu/editorials/russo/2008/images/1020_clip_image002.gif
When it comes to strategically trading broad market indices, there is simply no match for Elliott Wave Technology’s Near Term Outlook.We will gladly challenge any short-term advisory service or software generated algorithms that claim to outperform our consistent and impartial mapping of the price action in the Dow, S&P, or NDX.
Over the past three years, we have perfected the art of dispatching tactical trade set-ups and market forecasting to a consistent, impartial, and immensely profitable endeavor for those who take the time to embrace it.
The express focus of Elliott Wave Technology’s charting and forecasting service is to help traders anticipate price direction and amplitude of broad market indices over the short, intermediate, and long-term.
We deliver this unique blend of proprietary charting protocol daily, with the express intent to convey timely and profitable information.Our daily reports impartstrategy-specific guidance, which strives to forecast, monitor, and calibrate market impact relative to a multitude of signals that are in direct alignment with eight distinct trading strategies set forth in the members NTO essentials file.
Regardless of one’s level of experience, users must allow sufficient time to become acquainted with the authors charting protocol, strategies, and tactical narratives prior to entering positions or developing discretionary trading strategies.
If you trade in today’s increasingly uncertain and volatile markets, you need a reliable and consistent edge you can count on.If you want the very best, there is no better short-term advisory than the Near Term Outlook.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F1020.html&title=%22Revisiting%20the%20HUI%20(Gold%20Bugs%20Index)%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2010%2F20%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3bd3cac3d0ee0d/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Global Contagion (Blowback)by Joseph Russo, Elliott Wave Technology | October 27, 2008Print FromGLOBAL CONTAGION April 26, 2006
“A highly deceptive global contagion of the bullish kind appears well underway”
“The basic concept of meeting the demands of large growing populations with finite world resources has always been one of extreme challenge and controversy.
The prospect of accommodating such demands becomes even more challenging when sustained bursts of regional growth at the periphery manifest themselves upon pillars of artificial demand engineered from the center.
Competition for distribution of wealth and resources appears to be the basis from which many of globalizations challenges currently resonate.
A perceived, never-ending supply of cheap goods and labor tied to exports together with an abundance of natural resources embodies many of the power structures at the periphery.
In kind, a perceived never-ending supply of consumers and credit tied to imports together with an abundance of military force embodies much of the power structure at the centers.”
“As competitive dynamics mature, the prospects of sustaining such arrangements indefinitely diminish considerably.”
“The one tenet of Elliott Wave Theory that surfaces time and again in our “contagion” analysis is that of the fifth wave extension at intermediate degree or higher.
The propensity for fifth waves to extend has been quite rare in recent decades.Back in the late 1800’s through the late 1930’s, there appears to be sufficient evidence that stocks tended to stretch their final runs.
It also seems to have been Elliott’s general preference to anticipate that the fifth wave of an impulsive advance would often pack the biggest punch by way of “stretching” or “extending”.
From the ‘40’s through the 80’s this has not generally been the case.Today, it is more common to anticipate that it will be the “third” wave and not the fifth that holds the higher probability of extending the stock indices.
Given the price action across a broad array of global equity indices, it is difficult for us NOT to consider the probability that extended fifth waves are currently under way in many global equity indices.”
April 26, 2006
ILLUSTRATION: Fifth Wave Extension at Intermediate Degree
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FromSCALING PERCEPTIONS AMID THE GLOBAL EQUITY BOOMNovember 15, 2006
“The goal of this piece is to assist in broadening perspectives of general perception relative to amplitudes, durations, and numerous degrees of trend currently at work in the global market place.”
AUSTRALIA
November 15, 2006 LOG-SCALE ARITHMETIC SCALE
http://www.financialsense.com/fsu/editorials/russo/2008/images/1027/1027_clip_image003.jpghttp://www.financialsense.com/fsu/editorials/russo/2008/images/1027/1027_clip_image004.jpgRevisiting the ASX All Ordinaries Composite
Two years ago in November of 2006, we were anticipating a topping process to an intermediate degree (3) wave believed to be in progress.As noted by our postulated (4) wave at the lower trend channel in each of the charts above, the anticipated (4) wave was expected to be sharp, and deep.During the final thrust of the bullish portion of the “mass global contagion”, this anticipated sharp wave (4) down failed to exert itself with adequate depth or duration.Instead, after extremely shallow and brief pullbacks, stocks resumed shooting for the stars right until the top tick (nearly a year ago) in November of 2007.The 50% CRASH-LIKE decline illustrated in the aftermath below leaves us with either of two plausible wave counts.Of the two, the one in keeping with the “extended fifth-wave” architecture illustrated in the lead chart, the log scale count to the left appears most visually fitting thus far.October 24, 2008 LOG-SCALE ARITHMETIC SCALE
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INDIA November 15, 2006 LOG-SCALE ARITHMETIC SCALE
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Revisiting India’s BSE Index
In contrast to the extended fifth wave scenario, in the above charts presented in 2006, we had positioned India’s stock index as having completed a satisfactory (4) wave pullback at Intermediate degree.As such, we were anticipating the BSE would deliver one last thrust higher in terminating its (5) wave prior to succumbing to a primary bear market.Our anticipated peak in 2006 extended by one turn-unit (in this case a year) as the Global Equity boom floated all boats in general unison.In both the LOG and ARITHMETIC chart updates below, we see the year-long decline breaching more than a 62% retracement of the entire advance from primary wave 4 in 2002.Thus far the decline is near a level at which an interim rebound of sorts would typically be expected.As noted, we suspect the primary bear market in progress can last well into the 2011 period.October 24, 2008 LOG-SCALE ARITHMETIC SCALE
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RUSSIA November 15, 2006 LOG-SCALE ARITHMETIC SCALE
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Revisiting Russia’s RTSI Index
Given the collapse of the Soviet Empire in the late 90’s, our 2006 view, as presented in the above charts, speculated that the “new” Russia was at the time, embarked upon terminating a most remarkable first wave up at CYCLE dimension.We maintain this opinion.Of interest is the stark difference in the appearance of LOG vs. ARITHMETICALLY scaled price data.The updated charts below show that the Arithmetic Scale was indeed the proper way to have perceived the RTSI back in 2006.Also, note how the intermediate (5) of 5 wave extended in its telltale whirlwind expanding wedge of chaos prior to crashing like a stone.October 24, 2008 LOG-SCALE ARITHMETIC SCALE
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BRAZIL
November 15, 2006 LOG-SCALE ARITHMETIC SCALE
http://www.financialsense.com/fsu/editorials/russo/2008/images/1027/1027_clip_image015.jpg http://www.financialsense.com/fsu/editorials/russo/2008/images/1027/1027_clip_image016.jpgRevisiting the Brazilian Bovespa
Like India, the Bovespa was another such index believed to be on the cusp of a final advance back in November of 2006.Two years ago, we had postulated that a minor degree 5th wave up was in progress.With the Bovespa trading near the 40K level at the time, we calibrated placement of the larger (5) terminal in the 50K – 67K range along with noting 2007 as a potential turn-year.In the follow-up summary below, note that only the Arithmetic Scale is able to adequately portray a chaotic extension of an expanding wedge (similar to Russia’s) leading up to the final crest of the primary 5th wave terminal. It is worth noting again how the Arithmetic Scale better reflects the harsh reality and severity of the recent crash, while the LOG scale to the left provides a false visual perception that not too much damage occurred, and that the market has a much better chance to reclaim new historic highs from current levels.October 24, 2008 LOG-SCALE ARITHMETIC SCALE
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MEXICO November 15, 2006 LOG-SCALE ARITHMETIC SCALE
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Revisiting the Mexican Bolsa
The Bolsa is perhaps the most perplexing of all the indices relative to its LOG vs. ARITHMETIC visual disposition.Two years ago, both scales were calling for the same outcomes.In our 2006 Arithmetic study (above right) we were fully anticipating a sharp and fast decline toward the (4) wave terminal.We even placed a vertical dashed line at the 2008 period to capture such a rapid decline near the 22K level.Fast forward to October 2008 (below right) and we see that at the 17K level, there is overwhelming evidence that the Arithmetic count is visually flawed in its expectation of a (4) wave down.In contrast, and despite a deceptive 50% retracement of the entire advance from 1995, the updated log scale (below left) thus far maintains perfect parallel trend channel alignment with an appropriate (4) wave consolidation amid an ongoing primary bull market.Which of these IDENTICAL charts should one trust to deliver a (5) wave recovery to fresh historic highs?If you answered neither, you are quite correct.The only thing one can trust is the day-to-day, week-to-week, month-to-month price action.If we have learned anything at all from the current crisis, FAITH and TRUST like HOPE and COMPLACENCY, have no place in long-term perceptions.October 24, 2008 LOG-SCALE ARITHMETIC SCALE
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THE WORLDNovember 15, 2006 October 24, 2008
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Revisiting the Dow Jones World Stock Index
Approaching test of a 16-year trend line from 1991, along with a violent 50% crash of its entire value, leaves no doubt that Global Equities are entrenched in a Primary Bear Market Event, likely within the confines of CYCLE-DIMENSION, which would equate to a long-term SECULAR BEAR MARKET ENVIRONMENT.
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Editorial Archive
Technical Assessment - US Dollarby Joseph Russo, Elliott Wave Technology | November 21, 2008Print Casting aside fundamental arguments relative to the long-term viability of un-backed fiat currency, we turn our focus to a purely technical assessment of the past 8-years of price data for the US dollar index.
Technical Tools used in our assessment are the following:
Elliott Wave Architecture
(Analysis & Summary)
From its seven-year 41% highly inflationary decline through early 2008, the dollar has satisfied all tenets of a complete bear market decline at Primary degree.Upon evaluation of larger data-periods, we label the 121.29 print high in 2001, as terminal to a “B” wave at CYCLE dimension.
The unrelenting three-year decline into late 2004, illustrates the downward sub-dividing force of wave (3) at intermediate degree.Despite its deceptively impulsive appearance, the eleven-month 15.22% rise from 80.39 to 92.63 then marked the end of wave (4)’s counter-trend rally.
From its 2005 crest at (4), the first of five waves down at Minor degree extended through December of 2006.Following a brief and shallow rally into January 2007, the dollar resumed its downward spiral, completing sequence to each of the five-waves at Minor degree before terminating wave (5) of “A” at the 70.70 print low in March of 2008.In total, from its (4) wave peak, the five minor waves comprising the larger Intermediate (5th)-wave down took nearly three-years to complete.
Basis our Elliott Wave perspective from the chart high, and in keeping with the repetitive fractal nature consistent with larger degrees of trend, a 2001 turn-pivot high at CYCLE dimension portends that at least three down-waves at Primary degree will follow.
Elliott Wave Theory suggests that from the base of our Primary ‘A’ wave terminal at the 70.70 low in 2008, an intervening “B” wave rally (the Dollar’s current deflationary thrust higher) is likely to be followed by a brutal Primary ‘C’ wave decline.
Once the Primary advancing “B” wave has crested, fulfillment of such a sequence will soon aid in projecting a price-target window to its corresponding CYCLE-terminal, which in this case is CYCLE wave “C”- down.
Albeit deflationary over the near-term, and despite prospects for an intervening downward correction, note that the preferred Elliott Wave count illustrates a best-case scenario for an intermediate-term “strong dollar deflationary policy” through 2011.
Our ALT: (alternate) wave count reserves plausibility for the Primary deflationary ‘B’ wave (tan label) to mark early terminal to its Primary crest once the current 22% (and counting) deflationary spike higher reverses course.
Fibonacci Retracement and Time Sequence
(Analysis & Summary)
From our charts peak to trough, three common upward retracement levels (.382, .500, .618) for the deflationary Primary ‘B’ wave rally cite 90.02, 95.99, and 101.96 as potential Primary degree terminal zones.
General timing of the charts larger Fibonacci turn-year sequence suggests potential for a pivotal yearly turn taking place sometime into the 2009 period, eight-years from the CYCLE wave high.As an interesting aside, Gold has a known 9-year cyclical predisposition to mark critical bottoms concurrently in this same period.
It would be counter intuitively bullish if the dollar were currently striking new lows into the 2009 period (plausibly marking a turn-year low), however the dollar is in its eighth month of vertical rally, suggesting that a continuation of dollar strength into 2009 may usher in a key pivotal top at Primary degree.
From the March 2008 Primary “A” wave base, the smaller monthly sequence of potential Fibonacci turn-bars narrows timing projections to the current 8th month of November, and the 13th month of April 2009 as specific potential turning points.Such guidelines give us fair reason to anticipate key turn-pivots as early as (now) November 2008 and then again as we approach the April 2009 period.
We illustrate another timing sequence of interest reflected in the charts postulated deep corrective (b) wave down through December of 2009.December of 2009 cites a Fibonacci 21-month turn-period extrapolation from the 70.70 low.As an aside, nearby commencement of a plausible yearlong inflationary decline in the dollar may coincide with a reflationary bear market rally in equities and everything else that collectively blew-up in the wake of the dollars deflationary resurgence.
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Moving Average Trend Analysis
(Analysis & Summary)
We observe three separate moving averages on our long-term dollar chart.In keeping with Fibonacci numbers, we are tracking the dollars longer-term trends by way of monthly trade and closes above or below the 21, 34, and 55-month moving averages (MMA).
The larger 55-month average (dark blue dots) has kept good pace with the dollars Primary degree trend.Following the 121.29 print high in 2001, the dollar printed its first (sell-signal) close beneath the 55-MMA at 106.11 in June of 2002.
In the three months following, the dollar held, trading mostly higher as monthly closes meandered within tight range north and south of the 55-MMA’s trend measure.As illustrated, this upward price movement marked three months of modest rally in terminating the Minor wave-2 subdivision amid the more forceful Intermediate (3) wave down.
By December of 2003, the dollar broke down decisively beneath our largest moving average, succumbing to the undeniable forces of wave (3).Persistently trading well beneath its governing 55-MMA for more than four-years following the breaching sell-trigger, the dollar index remained enslaved amid a Primary bear market.
Upon satisfactorily completing its -5th- of (5) of “A” waves down in March of 2008, and following a 5-month basing process through July of 2008 thereafter, the dollar sparked ignition to a rather impressive vertical lift-off.It is not until forging through its seventh month of parabolic rise that the dollar index returned to re-encounter its 55MMA in spectacularly rapid fashion.
Upon the public’s widespread recognition of global economic crises in September 2008, the dollar index lunged continually higher, effortlessly closing above its 55MMA in October 2008 for the first time in five years.
Albeit amid a larger secular bear-market environment, so long as the dollar maintains trade and closes above this monthly moving average, the primary trend-change from down to up shall remain intact.
Still young in its new direction, it is critical to keep an eye on dollar index levels relative to its 55MMA trend gauge.Trade and closes back beneath this gauge may quickly resume the dollar’s secular bear market decline.
Chart Patterns
(Analysis & Summary)
Notwithstanding a debilitating deflation, which would manifest with persistent acceleration of the rise in the dollar, it is then quite reasonable for us to anticipate that the massive reflationary measures currently seeded via bailout efforts, would inevitably reverse the deflationary dollar rise.
Translating the assumption that the dollar is at or near a level at which it will soon begin to moderate or reverse; we can see evidence of early development to a significant chart pattern that extends toward 2013.
From the crest at (4) to the current November high, we have drawn a tentative, downward sloping trendline marked by our (R-1 resistance) annotation.To anticipate the lower boundary of this potential chart pattern, we extrapolate and extend trendline trajectory from the March and July lows, and have marked its boundary with the (S-1 support) annotation.
The two lines converge, forming an apex into the 2013, 2014 period.The upper and lower boundaries at R-1 and S-1, create a rather large, and near perfect symmetrical triangle, or pennant pattern.
Relative to the governing trend at larger degree, technicians classify this type of chart pattern as a “continuation pattern”.This suggests that probability lies in favor of an ultimate follow-through resolution to the downside.
Whether a bearish or bullish resolution ultimately occurs, the prospective pennant pattern provides us with both upside and downside point-value targets relative to the size of its construction.We discuss these projections under the “price-targets” heading below.
Another chart pattern of particular import, is born by the horizontal line drawn just above the 80-level.This horizontal boundary marker is neckline to a massive Head and Shoulder pattern connecting the lows of 1995 with those printed in 2004.This mega-bearish neckline boundary-marker runs directly through the center of our symmetrical triangle, slicing its 2013 apex in half.
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We have provided a small, longer duration chart, which illustrates the enormity associated with this particular Head and Shoulder pattern.
The mega sell-signal that triggered upon breach below this key horizontal marker, has since suspended.
Until its recent vertical rise back above neckline in October 2008, the dollar had spent more than a year in a downward inflationary death spiral beneath it.
So long as the dollar index is able to maintain trade and closes back above this enormous (80.39) sell-trigger boundary, the hyper-inflationary downside associated with it shall remain suspended in lieu of the current deflationary threat taking its place.
Price Targets
(Analysis & Summary)
Upside Targets:
[*]Basis the upside Fibonacci retracement levels, 90.02, 95.99, and 101.96 are prime candidates.[*]Basis potential upside breakout to the prospective pennant pattern discussed, we calibrate 18.00-pts of upside risk from the point at which the index breaks above the patterns falling upper boundary noted at R-1.[*]We have noted two additional upside price objectives on our monthly chart.The first of which is 98.50.We have illustrated the general origin of this target with an upward green arrow placed near the 70.70 print low.We derive this target from a buy-side trade-trigger, which elected in August from the 76.24 level.[*]The second upside target of 91.29, has been derived from an additional trade-trigger electing at Octobers resurgence above the 80.39 level.Illustrated in bright green, the falling portion of S-1’s trendline trajectory stands in defense of this particular target.Downside Targets:
[*]Basis an eventual downside breach to the prospective pennant pattern discussed, we calibrate 18.00-pts of downside risk from the point at which the index breaches beneath the rising lower boundary noted at S-1.[*]Though currently suspended, the dollar-crushing 41.00 Head & Shoulder price objective can only reclaim working status upon a return to trade and closes back beneath its presently compromised defense boundary beneath 80.39.Conclusions:
Currencies are central to long-term economic stability.They are critical drivers to all of the financial spheres ancillary measures of productivity and advancement.
In its present role as the world’s reserve currency, the un-backed US Fiat-Dollar has benefit of senior status.Such distinction provides a unique competitive advantage relative to global trade agreements.
For generations, and most notably since removing itself from the gold standard entirely, the US dollar has enjoyed what is in effect a worldwide monopoly in “fiat-money”.
Exemplified in part by its recent strength vs. other currencies amid threats of systemic financial collapse, the US dollar continues to benefit from its world reserve status.How much longer a US centric advantage prevails is likely to be contingent upon how resolution of the current crisis unfolds.
The die is now cast, and the likelihood of a major paradigm shifts taking root has never been greater.
Rebounding after breaching a precipice from which it may not have returned, the US dollar finds itself in a quandary whereby there is little room for establishing any safety, or comfort zone of meaningful or lasting stability.
Whether a great deflation, hyperinflation, or combination thereof will usher in such shifts in paradigm, respecting trends in currencies, particularly the world’s reserve currency, will be of tremendous anticipatory value in preparing for tectonic shifts that may surface in the decades ahead.
In the simplest of terms, based on the approximate level of 80.39, one may associate trade excessively above this level as dangerously deflationary, and trade markedly below it, as an equally dangerous hyper-inflationary gauge.
The root question remains unanswered as to why financial markets spike and plunge to dangerous extremes when the dollar trades just 15% above or below the 80 level.
Could there possibly be a viable way to “fix” a floating fiat currency at just the right price to please the markets and maintain a stable economy.With all of the unprecedented rule changes taking place on a near daily basis, we suspect that nothing is off the table when a monopoly of such import is at risk of systemic failure.
In Sum:
When it comes to strategically trading broad market indices, there is simply no match for Elliott Wave Technology’s Near Term Outlook.
Over the past four years, we have perfected the art of dispatching tactical trade set-ups and market forecasting into a consistent, impartial, and immensely profitable endeavor for those who take the time to embrace it.
The express focus of Elliott Wave Technology’s charting and forecasting service is to help traders anticipate price direction and amplitude of broad market indices over the short, intermediate, and long-term.
We deliver this unique blend of proprietary charting protocol daily, with the express intent to convey timely and profitable information.Our daily reports impartstrategy-specific guidance, which strives to forecast, monitor, and calibrate market impact relative to a multitude of signals that are in direct alignment with eight distinct trading strategies set forth in the members NTO essentials file.
Regardless of one’s level of experience, users must allow sufficient time to become acquainted with the authors charting protocol, strategies, and tactical narratives prior to entering positions or developing trading strategies.
If you trade in today’s increasingly uncertain and volatile markets, you need a reliable and consistent edge you can count on.If you want the very best, there is no better short-term advisory than the Near Term Outlook.
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Editorial Archive
No Way Out, Outraged, and Cautiously
Bullish on the Fall of Global Empiresby Joseph Russo, Elliott Wave Technology | December 16, 2008Print Notwithstanding the success of a 2nd American Revolution
Politicians, Bankers, Power Brokers, Lobbyists, Wall Street, and Huge Trans-National Corporate Conglomerates have collectively succeeded in delivering their subtle-monopoly deathblows to American Free Market Capitalism.In doing so, they have destroyed the constitutional fortress which once protected and kept shining the beacon of American ideals and free enterprise.
Services no longer needed thank you
Like washed-up streetwalkers, instead of crack-cocaine, global governments and their fascist subtle monopoly interests are helplessly addicted to power by debt-creation, fiat currency, never-ending denials, and shameless empty promises of ongoing change and reform.This fatally flawed generational power-structure-legacy has “tricked” for far too long, and has now reached its point of no return.
Failure of State – The American Nightmare
For nearly one hundred-years, a trusting citizenry of hard-working immigrants, blinded by visions of “The American Dream”, fear, and false incentive traps have unknowingly empowered their elected officials to turn a blind eye in their sworn bids to uphold the principles of the United States Constitution.The present and unequivocal result is a decisive, intractable failure-of-state from which there is no way out.
A Colossal Failure of the Big-Three Failure (X-Autos)
Far worse than GM, Ford, and Chrysler combined, Congress, the Treasury Department, and the Federal Reserve Board can no longer stand on their own two feet.Like the automakers, it is only a matter of time before they will be coming back to the table begging for more taxpayer money, while in their next breath pleading false promise of emergency solutions and better days ahead.For all intent and purpose, all three arms of government are worthless, and very much dead in the water.
First item in the rulebook of Centrally Planned Fascist Governments
If we have 100% monopoly on money creation, we can fool them ALL THE TIME.Talk about the fraud of the century.At the end of the day, the result of our Big-3’s (X-autos)decades of cumulative and collective actions will fair similar results to Wall Street’s latest 50b fraud engineered by Bernard Madoff, former chairman of the NASDAQ stock exchange – “nothing but a giant Ponzi scheme.”Only time will tell, but maybe this time will turn out to be different, perhaps this time, we will not be fooled again.
Americas Government is Bankrupt, Insolvent, and at the Mercy of its Creditors
As the grand-super-sized Ponzi scheme grinds to a screeching halt, all government can to do is try to perpetuate new-deal variations of past failed schemes and bailouts from which America’s Nightmare became terminal reality.Under the current system, and over the long haul, no matter how long or high such rallies go - every rally is destined to be a sucker’s rally.
Simple as A-B-C - the Triangulated Root Cause
To arrive expediently at the root cause of this complex problem, one need not look any further than the cumulative historic actions of Treasury, Federal Reserve, and Congress.Bursting bubbles, subprime, deflation, inflation, falling prices, rising prices, job losses, and every other imaginable “financial-sphere-generated” crises are all SYMPTOMS rooted exclusively from the decades of cumulative action within these three branches of failed government.
Each Fork in the Road Leads to Ruin
Should America follow in the footsteps of Japan, it shall toil in the throes of deflation for decades to come.Should America follow the current “Bernanke” model of fighting the last war, she will seize and convulse amid the turmoil of civil unrest and hyperinflation.
Unless governments openly admit their epic failure and methodically repent by embarking upon a massive constitutional revitalization effort via a severe and radical reformation, America will inevitably forfeit all of its powers, and fall victim to those with sounder minds and stronger hands.
The first two elements to tear down and rebuild are the destructive fractional reserve banking system and its flawed debt-based irredeemable currency to which there is no standardized weight, value, or measure.Without a balanced currency, valuation metrics across every sphere of finance and economy are useless.
Building Bridges to a Sustainable Future
Governments, Economies, and Banking systems ought to be built like bridges, not like houses of cards.
Consider for a moment, how one could possibly engineer and construct a secure mega-suspension bridge spanning 7,000 feet, if during the design and construction phases, all rules associated with the laws of standard measurement changed values on a daily basis?The architect using one scale, the engineer another and the construction crews yet another scale.Each have similar tools to measure and project, but each set of measuring tools has an inherent floating variable, which deliver different value readings from one day to the next.In other words, all measuring devices are unstable.One-inch today may well be 3-inches tomorrow and only ¼” the day after.The result of which is that ALL VALUES ascertained from such measuring instruments are erroneous and of no practical utility.
Well, that is exactly how global central bankers and governments expect small business and the balance of humankind to plan for their futures and day-to-day lives - with a floating, un-pegged measure of “debt” vs. that of a hard redeemable currency with stable value.Therein lays all the “root cause” one needs to explore in understanding how the global economy arrived at its present impasse.
Back to the bridge; imagine the quality, safety, and durability issues surrounding a mega-bridge designed and constructed with such flawed protocol.Would you drive your family over its 7000’ span?If such a bridge managed to stand at all, it would certainly fail all counts of inspection.If such a bridge were opened, and certified for passage despite its flaws, traversing its span would pose fatal threat to those without knowledge of its structural defects, or daring enough to risk it anyway.
People of the World – This one’s a Tear-Down
In the case of our bridge analogy, if such a physical blunder should manifest in the real world, once discovered, engineers would have no choice but to order a controlled demolition of the structure, and prepare a new set of engineered blueprints for its replacement.The new replacement structure, designed and constructed from fixed standards of measurement, calibrated with strict uniformity protocols and built with matching precision would then provide optimum assurance of the structures soundness, and long-term security.To avoid its inevitable day of Armageddon, this is precisely the type of structural reengineering that must take place in the global financial system.
We submit, there is a time and a place for everything, however any realized benefits associated with debt-based economies and currencies have long outlived their practical utility.In fact, they now pose more of a hindrance and systemic threat to progress than just about anything else does.
Mr. Bernanke, Mr. Paulson, Mr. President – Game Over
If the esteemed Mr. Bernanke is banking on his 30-year old PHD thesis on the “last great depression” to steerour economy through its current malaise, all that Mr. Bernanke will achieve is to prove that figuring out how to win the last war provides little in the way of effectiveness in dealing with the current set of conditions.That was then Ben, and this is now, there are no do-over’s – what we have here is a drastically different set of variables, a completely new league – new world, with a unique set of global dynamics.One cannot solve today’s dilemma with a hypothetical solution to an old puzzle.
Reversal of Polarity
Financial markets are supposed to reflect and measure economic reality.The real economy should not be hostage to the health, stability, or risks associated with financial markets.If one agrees with this fundamental concept, one will conclude that for decades, the global financial sphere has usurped all power from real economies, and has in-effect held such economies hostage to its will and ambition in destructively exponential fashion.
Taking this line of thinking one-step further, the urgent necessity for the recent $700-billion US banking bailout was unequivocal proof that cumulatively, the United States Department of Treasury, the Federal Reserve Board, and the United States Congress have collectively failed in stewardship of their fiduciary responsibilities and constitutional mandates.
Sadly, thus far, this crisis is turning out to be a lost opportunity for the people and the “real economy” to reassume control of fraudulent banking systems, mortgage lending practices, pension fund schemes, and other widespread Wall Street fraud.
One critical opportunity this crisis should yield is to force the (now quasi-national) banking/finance/credit systems to restructure as permanent non-profit public utilities.Such a forced restructuring would impose a strict set of regulated fiduciary obligation to which banks, lenders, and pension funds must comply in order to survive and receive the subsidized mercy of taxpayer support.All financial, government, and lobby-related entities refusing such explicit terms of adequately regulated compliance would become extinct.
A global victory for all people, small business, and the real economy
The result of such a major restructuring of the financial sphere will engender a sustainable banking, mortgage, and retirement system to serve the long-term interest of global societies vs. leaving such stewardship to the globally interconnected Wall Street casino operators, bankers, politicians, behemoth corporate interests, central bankers, and all of their respective lobbies.
A Second Coup d’état in progress
So far, instead of seizing this immense opportunity, it is likely that Paulson of Treasury, and Bernanke of the Federal Reserve, scared the living daylights out of Congress with absolute guarantees of widespread anarchy, civil unrest, rioting, and the certain collapse of the United States as a viable union.
What they told Congress behind closed doors was too alarming for anyone in Congress to share with the public.We shall never know the extent of the doomsday scenarios presented by the Fed and Treasury.What we do know is that Congress was severely shaken, and buckled to the dire warnings of consequence from Treasury, and the Fed.The results are now unfolding before us, and the future has never been more uncertain.
How Might Investors React
Simple - STOP INVESTING for the long haul, and START TRADING!Seriously, what are the long-term viable prospects for the United States, or any of its globally interconnected markets?Short of radical change, which transforms social security, retirement/pension funds, and the entire national banking system into highly regulated (non-profit) public utilities – there is no sound reason to invest in securities ANYWHERE for the long haul.Occurring with shorter and shorter intervals of illusory reflation results, the inherent architecture of the present system (as illustrated by current events) will continue to decompose indefinitely under its ever-growing weight.
Build Anew
The only way to break free from the shackles of a failing monetary system and securities industry is to first design an entirely new system, and then tear down the old.The first place to begin is with a brand-new redeemable currency system of standard weight and measure.Until signs of the above are firmly in place, all long-term bets on securities with no standard of redeemable valuation measure should remain PERMANENTLY OFF LIMITS for the long-term.
Trade On
Instead, TRADERS with proper guidance should assume no guilt in extracting steady streams of trading returns from the crumbling system.Without bias, it matters not which side of the market one trades, only that one’s trading posture and time-frame properly align with the current set of market dynamics.
Case in point is the three-year dot.com crash, another symptom of a failing financial system.Despite the NASDAQ’s complete failure defined by the tech-heavy index registering a near 90% wipeout by 2002, five-years later, its headline counterpart, the Dow Jones Industrial average, nominally reflated in a contrived bull market to the tune of almost a 100% gain from its 2002 lows.From the Industrial’s peak in October of 2007, in just 13-months, the near 100% contrived gain in the Dow had completely vanished by November 2008.Shorter intervals of bull market sustainability exemplify yet another symptom of a rapidly failing financial system.
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Where do we go from here?
Have we just marked another contrived cyclical low in November?Will the Dow, S&P, and NASDAQ quickly return to their respective 2007 highs or beyond?With a hyperinflation, the answer could be yes.However should deflation stick around, those chances are slim.Symptomatic of either outcome, both are undesirable, as each would contribute to the continued destruction of small business, individuals, and real economies all over the world.
Unlike the fixed permutations and singular “right-answers” deducible in a Sudoku puzzle, accurately deciphering the markets Elliott Wave structures requires patience and flexibility in applying complex sequential logic to the highest probabilities in solving a dynamic market puzzle void of a singular fixed outcome.
Since it is not possible for 100% of all clues derived from our technical analysis to deliver precisely as anticipated, some level of trial and error is necessary in putting all of the moving parts together.In concert with traditional chart analysis, maintaining disciplines of logical permutation provided by Elliott Wave Theory yields far more profitable outcomes vs. simply guessing, or employing the facility of emotion or hope to enter and exit trades.
When it comes to strategically trading broad market indices, there is simply no match for Elliott Wave Technology’s Near Term Outlook.We respectfully challenge any short-term advisory service or software generated algorithms that claim to outperform our consistent and impartial mapping of the price action in the Dow, S&P, or NDX.
Over the past four years, we have perfected the art of dispatching tactical trade set-ups and market forecasting to a consistent, impartial, and immensely profitable endeavor for those who take the time to embrace it.
The express focus of Elliott Wave Technology’s charting and forecasting service is to help traders anticipate price direction and amplitude of broad market indices over the short, intermediate, and long-term.
We deliver this unique blend of proprietary charting protocol daily, with the express intent to convey timely and profitable information.Our daily reports impartstrategy-specific guidance, which strives to forecast, monitor, and calibrate market impact relative to a multitude of signals that are in direct alignment with eight distinct trading strategies set forth in the members NTO essentials file.
Regardless of one’s level of experience, users must allow sufficient time to become acquainted with the authors charting protocol, strategies, and tactical narratives prior to entering positions or developing discretionary trading strategies.
If you trade in today’s increasingly uncertain and volatile markets, you need a reliable and consistent edge you can count on.If you want the very best, there is no better short-term advisory than the Near Term Outlook.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2008%2F1216.html&title=%22No%20Way%20Out%2C%20Outraged%2C%20and%20Cautiously%20Bullish%20on%20the%20Fall%20of%20Global%20Empires%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2012%2F16%2F2008&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3beef3ef489bca/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2008 Joseph Russo
Editorial Archive
Welcome to Super-Cycle Wave IVby Joseph Russo, Elliott Wave Technology | January 12, 2009Print Working out the largest of Big-Picture Visions
The equity price-chart below is a compilation of data points starting with the British All shares Index (1693-1853), the Clement Burgess Index (1854-1895), and then spliced using ratio multipliers with the Dow Jones Industrial Average from 1896 to present.The 315-year result is the longest contiguous record of equity prices in the history of Humankind.
Where are we?
Placing a cogent wave count to this data from a long-term grand cyclical Elliott Wave perspective is no easy task.Even the most astute of Elliott Wave analysts would pause at the challenge in assigning the wave labels inherent at each of the nine degrees of trend defined by Mr. Elliott.The first 164-years of price-data is enmeshed with a series of sharp spikes, massive crashes, along with an endless array of corrective overlapping bull and bear market waves in between.Such patterns present daunting challenge to reconcile.It is not until the print low in 1932 that we are able to identify a clear visual five-wave upward impulse.At first glance, one would be inclined to label the 1693-1857 consolidation as some type of gargantuan fourth wave event.This would suggest that the present day crest might be marking our “end of days”.Though this is plausible, we have arrived at an alternate, more optimistic longer-term opinion.Despite our long-view optimism, there is no feasible way for long-term “buy & hold” investors to avoid the carnage and consequence of Super-Cycle Wave IV.
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View from the far corners of the Universe
From the far corners of the Universe, this is how one with eternal life might view the last 315-years of humankind’s progress.It is from this perspective that we postulate the vertical parabolic rise from 1857 as an unequivocal third wave of significant import.
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Grand-Super-Cycle wave II(1720-1857) 137-years
Super-Cycle wave III (1932-2007) 75-years
(Extended)Cycle-Wave V (1974-2007) 34-years
When the above chart first appeared on our screen, the first thing we thought was –
“HOLY COW that is Log Scale!”
Let us put this Big-Picture exercise in some context.
Consider for a moment that a fifth-wave Elliott terminal at Grand Super Cycle Degree will be an event of magnitude relative to the stability or very existence of humankind.A 40- foot rise in the Sea level, an Asteroid Impact, a Nuclear Accident, a worldwide Pandemic, or Gamma Rays from a nearby star going Super Nova come to mind as events associated with terminal of a Grand Fifth.Yes, we are talking about the extinction of Humankind or worse.In this context, we optimistically hope that we have at least another thousand years to get things right before such reckoning may befall us.The planet has been around for a long time, and so has Humankind.As death and taxes are certain, so too is it certain that the planet will someday explode at the hand of a dying star some 93-million miles away.Returning to optimism, look at that 164-year never-ending, (plausibly perceived) potential Grand-Four Triangle discussed (at first glance) relative to the chart above.With this unique compressed view of the “really big picture”, that span of 164-years can easily appear as first and second waves, especially considering the utter absurdity of the parabolic rocket launch off the 1857-59 low.Viewed at such scale, if we are on the doorstep of our last days, such an imminent Grand Fifth ending would seem rather short lived given all that is behind us.Short of a MAJOR world-changing event, placed in this context, one can only assume that the insane parabolic advance we are witnessing is that of an extended Third Wave of Grand-Super-Cycle-Degree.Those gurus’ once clamoring for a 30-thousand Dow may not be so crazy after all however; those 100,000 Dow folks may have to wait a thousand years for validation.
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The 1932 Crash Low registers Super-Cycle II
Elliott himself remained strident that the ’29 print high was an expanded “B” wave of sorts.That he considered it that of Cycle Dimension as we now do, is not likely.Of particular interest in reconciling the above two sets of Cycle-Degree impulses from 1857-1966, are the extraordinary Fibonacci turn sequences taking place between most all of our yearly terminals.
For Example:
From the 1857 low, a primary degree bull crested some (34-1) 33-years later in 1890 marking a Cycle-Degree III wave peak.Our positioning of the 1903 Cycle Degree IV takes place 13-years later following the 1890 III-wave crest.
Enter, the Federal Reserve
Just three years following the establishment of the US Federal Reserve system, our proprietary 1916 Super-Cycle I tops amid a 13-year long Cycle-Degree V wave advance, which disappointingly does not contain a visual impulse.Five years of bear market decline then marks our Cycle Degree “A” wave in 1921, followed by an 8-year relentless bubble, which fatally burst at the phony “B” wave crest of Cycle Dimension in 1929.
Thereafter, three years of Fibonacci carnage wreaked havoc, bringing on the Great Depression as it marks our Super-Cycle II terminal.Five years of bull market respite then crested the widely accepted Cycle Degree wave-I peak in 1937.Also widely accepted, the Cycle Wave II low of 1942 marked another five-year Fibonacci bear market prior to launching a most impressive bull market run before hitting the 1000-level brick wall at its Cycle III-wave ceiling in 1966.The answering bear market of Cycle Wave IV-wave down would not end for another eight years at the print low of 1974.After 8 years of struggle, the Dow blasted off from a secondary higher base in 1982 and barely looked back.
Some (34-1) 33-Fibonacci years post the 1974 low, 2007 has clearly marked high terminal to Super-Cycle III.Given such a rich and reliable history of reference imparted by Mr. Elliott and Fibonacci, what may Super-Cycle wave-IV have in store?
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We’ve only just begun
Should our wave counts prove accurate we may eventually refer to the correction we have seen thus far, as the calm-before- the- storm.Should Elliott’s tendency for alternationhold true to form, Super Cycle wave-IV possesses the capacity to implode the Dow back toward its former brick wall at the 1000 level, and do so in fairly short order.
In the year 2525 – if “man” is still alive
Our chart below, prepared for subscribers back in June of 2007 (and still holding true to forecast), depicts a kinder gentler SC-IV-wave consolidation lasting well beyond 2525.
Choose your poison –All at once, or prolonged torture
Though there is no way to tell with certainty the precise duration, depth, and shape of SC-IV, we did know well in advance that such a decline would likely be arriving in the 2007-2008 time frame.What we can prepare for is one of the two general outcomes mentioned above.One is a hard, fast, painful crash of historic proportion, and the second is a long, drawn-out agonizing torture comprised of a series of smaller cyclical bull and bear markets.Either way involves a significant amount of pain for long-term buy & hold investment strategies.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0112_clip_image008.jpg
Counting the vast array of explosive subdivisions amid Super-Cycle IV
To track and trade the currently unfolding subdivisions of SC-IV effectively, one may subscribe to our premium technical publication.The express focus of Elliott Wave Technology’s Near Term Outlook is to help active traders anticipate price direction and amplitude of broad market indices over the short, intermediate, and long-term.
Over the past three years, we have perfected the art of dispatching tactical trade set-ups and market forecasting to a consistent, impartial, and immensely profitable endeavor for those who take the time to embrace it.We deliver this unique blend of proprietary charting protocol daily, with the express intent to convey timely and profitable information.Our daily reports impartstrategy-specific guidance, which strives to forecast, monitor, and calibrate market impact relative to a multitude of trading signals that are in direct alignment with eight distinct strategies set forth in the members NTO essentials file.
Regardless of one’s level of trading experience, users must allow sufficient time to become acquainted with the authors charting protocol, strategies, and tactical narratives prior to entering positions or developing discretionary trading strategies of their own. Our forthcoming E-letters should assist greatly in this endeavor.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2009%2F0112.html&title=%22Welcome%20to%20Super-Cycle%20Wave%20IV%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2001%2F12%2F2009&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3bf9784984fc07/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2009 Joseph Russo
Editorial Archive
Trigger-Happyby Joseph Russo, Elliott Wave Technology | January 20, 2009Print The November Low
http://www.financialsense.com/fsu/editorials/russo/2009/images/0120_clip_image001.gifIn direct contrast to our previous piece exploring the current onset of Super-Cycle Wave IV, we will now take a closer look at the November low, and review the price action since then relative to speculative trading strategies.The small chart plots three months of daily closes for the Dow Jones Industrials.It shows that the move up toward the January high was clearly corrective.The chart also illustrates that the rapid decline off the January peak is fast approaching a key 61.8% Fibonacci retracement level.These three elements, the November low, the January high, and the .618 retracement level become essential pivot points from which we shall observe the near-term course of price action.To simplify this present inflection point, the market is entitled to do one of three things.First, it may hold the recent January lows, and then continue to chop higher, further subdividing its upward corrective course toward the 9630-10640 area.Second, it may recover only partially from the recent lows, rallying back up toward the 8675 level then once again collapse toward a retest or fresh new lows.Lastly, with the stubborn insistence of massive statist intervention, broad equity indices may also find themselves entitled to elongating a complex triangular consolidation, keeping the markets in a suspended state of limbo throughout much of Q1.
Theater of Speculation
So what does all this mean for short-term traders and long-term speculators?We will get to this shortly.In the interim, take note that we have intentionally avoided the term “investor”.We have done so because of the widespread recognition that all such endeavors into the financial sphere have been, and always will be of a speculative nature.There never has been, nor will there ever be any long-term “security” associated with investing, only the risks and rewards relative to speculations taken over time horizons of varying length.From our perspective, nothing has changed.Financial markets are what they are, and what they have always been, theaters of speculation.
Speculator vs. Trader
Now that the financial system is on life-support, we trust that any sense of security still resonating from the ponzi scheme of long-term investment is extremely fragile.Glancing back at our small chart, “Near-Term Speculators” elected to take profits and/or sell short anywhere from 8800-9000 amid four recent rallies off the November lows.They are now likely to take profits on any short sales and begin attempt at reestablishing trade on the long end from the 8000-8300 area.Until price-action proves otherwise, and despite the sizable pullback from 9000, “Long–Term Speculators” are technically justified to maintain bullish positions acquired anywhere from 7600-7700 against the November lows.In total contrast, “Short-Term Traders” position themselves all over the map on a daily basis.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0120_clip_image002.gif
Snapshots of Short-Term Trading Success
Dispersed throughout the balance of this article, we display a variety of 30-minute charts, each reflecting recent short-term trading successes in their respective markets.To impart this information to our subscribers in advance, we employ a tactical trade-trigger strategy from which we identify various trigger-points and their associated point values for short-term speculative consideration.Although a portion of these triggers will outright fail, over the past couple of weeks, this particular strategy has outperformed all others, and has delivered outstanding short-term speculative profits for those embracing its disciplines.
Short-Term Strategic Trading Cycles
Over the same period, our short-term counter-trend strategies have underperformed markedly.As with all things occurring cyclically in nature, tactical trading strategies also have cycles.One cannot expect a singular strategy to outperform 100% of the time without an appropriate season of decline and rebirth.As the current financial crises so eloquently attests, such is the essence of speculation across all time horizons.
The Complete Speculative Landscape
In our total commitment to keep one-step ahead of the entire speculative process, we go to great lengths in continually plotting course of the entire trading map for all time horizons.Doing so enables us to assess which strategies are currently working, which are muddling through, and which are languishing.Maintaining impartial resolve to such discipline allows us to deliver large profits without self-aggrandizement, and engender caution where necessary to stem losses amid situations of challenge.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0120_clip_image003.gifPrudently trade the Super-Cycle IV-Wave
To safely speculate on, or effectively trade the endless array of unfolding subdivisions amid SC-IV, one may subscribe to our premium technical publication.
The express focus of Elliott Wave Technology’s Near Term Outlook is to help active traders anticipate price direction and amplitude of broad market indices over the short, intermediate, and long-term.
Over the past three years, we continue to hone the art of dispatching tactical trade set-ups and market forecasting into a consistent, impartial, and immensely rewarding endeavor for those who take the time to embrace it.
We deliver this unique blend of proprietary charting protocol daily, with the express intent to convey timely and profitable information.Our daily reports impartstrategy-specific guidance, which strives to forecast, monitor, and calibrate market impact relative to a multitude of trading signals that are in direct alignment with distinct speculative strategies set forth in the members NTO essentials file.
Regardless of one’s level of trading experience, users must allow sufficient time to become acquainted with the authors charting protocol, strategies, and tactical narratives prior to entering positions or developing discretionary trading strategies of their own.Our forthcoming E-letters should assist greatly in this endeavor.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0120_clip_image004.gif
Communications in store for 2009:
To more effectively convey dynamic trading conditions relevant to our technical publications; we are soon planning to launch complimentary E-letter briefings for anyone interested in following our work.E-letter dispatches will briefly summarize tactical trading postures across various time horizons and trading strategies.The theme of our maiden E-letter will reveal how to sell at major tops, and buy at critical bottoms.Those interested may email us to get an early seat on our mailing list.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2009%2F0120.html&title=%22Trigger-Happy%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2001%2F20%2F2009&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3c0323ef30b575/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2009 Joseph Russo
Editorial Archive
Bridging the Gapby Joseph Russo, Elliott Wave Technology | January 27, 2009Print http://www.financialsense.com/fsu/editorials/russo/2009/images/0127_clip_image001.gifUpdate on the Dow
Last week we took a close look at the November low, and reviewed the price action since then relative to extremely short-term trading tactics. Later in this piece, after taking a retrospective look back at the Transportation average, we will explore some merits and challenges associated with executing medium-term speculative strategies. The small chart plots three months of daily closes for the Dow Jones Industrials. It shows that the move up toward the January high was clearly corrective. The chart now illustrates that the rapid decline off the January peak has breached a key 61.8% Fibonacci retracement level on a closing basis. From here, we now have a tentative working low in January from which to observe the near-term course of price action. In light of this prospect, we have added a new set of “upward” Fibonacci retracement levels should this working low hold bottom. The first level of .382 upward resistance is near the 8350 level, followed by 8500 and 8600, which mark the .500 and .618 upward fibs. Subsequent reaction to potential rallies reaching any of these three levels will provide clarity to the unfolding wave structures. If the Dow sternly rejects any such advances, fresh new bear market lows will not be far behind.
Remember When the Trannies were Hitting ALL-TIME-HIGHS
We do. As promised back in May of 2008, below are two charts revisiting outcome of our comprehensive Elliott Wave analysis of the Transportation average. Without equivocation, “then & now” snapshot charts from those originally studied in our Transports Hitting All-Time Highs piece, provides testament to the universal power of Elliott’s principles.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0127_clip_image002.gifhttp://www.financialsense.com/fsu/editorials/russo/2009/images/0127_clip_image003.gif
Bridging the Speculative Time-Horizon Gap
Relative to last week’s discussion on the cyclicality of short-term trading strategy performance, we thought it prudent to visit the merits and challenges associated with speculating amid the medium-term time-horizon.
Although our proprietary short-term trading models are fabulous, many of our users do not have the time or inclination to observe 30-minute price charts throughout the entirety of each trading session. For this more moderate type of speculator, we now provide a daily pre-open medium-swing market summary on the Dow, S&P, and NDX indices.
Building on the powerhouse trading strategies provided within our publications, we call our most recent, the (NTST) Near-Term Swing-Trade Strategy. Relative to the extreme short-term nature of our (IP) & (MV) strategies, which can generate multiple signals daily, the Near-Term Swing Trade strategy intends stay with positions for as much of a “short-term” move as possible.
In broad terms, this “medium” pivot approach is still very much a short-term strategy, and as such, it requires the perspective of intraday price bars in order to derive optimal entry and exit signals. Signals can occur numerous time per week when probing for tradable tops and bottoms, and once elected, trades may last anywhere from one day, to weeks depending on one’s discretionary exit preferences.
We monitor (NTST) strategic posture, entries, stops, and exits on a daily basis, and make them available through our daily subscription service. Should opportunities arise between publications, we also provide email notifications conveying any adjustments or changes to our current tactical stance.
Not Quite Spoon-Fed
Without the need to monitor intraday charts for (MV) manic pivots or (IP) interim pivots, the Near-Term Swing Trade approach allows speculators the freedom and opportunity to capture the lion’s share of “medium” pivots without having to watch and react to every tick. Entry levels, opening stops, trailing stops, and exit levels are all delivered on a silver platter. The (NTST) is by no means a Holy Grail, nothing is, but it just may be the right solution for those lacking the time to roll-up their sleeves and do battle in the challenging trenches of day-trading warfare. Despite all of this convenience, (NTST) traders are required to engage in the daily review of charts, risk assessments, and must take full responsibility for their individual position and money management accountabilities.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0127_clip_image004.gifThe (NTST) Strategy in Action
Although intentionally void of proprietary signal indicators, wave-counts, price-targets, and directional assumptions, the chart above reflects outcome relative to the profitability and precision that this strategy is capable of producing.
In three trades spanning over a two-week period, the strategy delivered 1228-pts in profit for an astounding 14.4% return. We achieved even greater outcomes for the S&P, and NDX. The S&P clocked in with 142-pts while the NDX brought in 190-pts profit, both yielding a 16% two-week return. Despite the impressive results, we caution traders not to get too excited. As with any strategy, this one also comes with its fair share of challenge and risk. Though the author exercises patient discipline in administering guidance in order to mitigate risk, losses can and will occur with certainty. Case in point being trade # 3 issued on 15-January. This SAR (stop and reverse) long call near the 8146 level stopped-out for a 63-pt LOSS the day after issuance. We must always remind ourselves that prudent speculation involves the willingness to take measured risk in return for comparable rewards. When we get this concept ingrained in our heads, we then have half of what it takes to be successful. The other half comes from good guidance, hard work, and the prudential management of money and risk.
The Complete Speculative Landscape
In our total commitment to keep one-step ahead of the entire speculative process, we go to great lengths in continually plotting course of the entire trading map for all time horizons. Doing so enables us to assess which strategies are currently working, which are muddling through, and which are languishing. Maintaining impartial resolve to such discipline allows us to deliver large profits without self-aggrandizement, and engender caution where necessary to stem losses amid situations of challenge.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0127_clip_image005.gifTrade the Super-Cycle IV-Wave
To safely speculate on, and effectively trade the endless array of unfolding subdivisions forthcoming in SC-IV, one may subscribe to our premium technical publication.
The express focus of Elliott Wave Technology’s Near Term Outlook is to help active traders anticipate price direction and amplitude of broad market indices over the short, intermediate, and long-term.
Over the past three years, we continue to hone the art of dispatching tactical trade set-ups and market forecasting into a consistent, impartial, and immensely rewarding endeavor for those who take the time to embrace it.
We deliver this unique blend of proprietary charting protocol daily, with the express intent to convey timely and profitable information. Our daily reports impartstrategy-specific guidance, which strives to calibrate market impact relative to a multitude of trading signals that are in direct alignment with distinct speculative strategies set forth in the members NTO essentials file.
Regardless of one’s level of trading experience, users must allow sufficient time to become acquainted with the authors charting protocol, strategies, and tactical narratives prior to entering positions or developing discretionary trading strategies of their own. Our forthcoming E-letters should assist greatly in this endeavor.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2009%2F0127.html&title=%22Bridging%20the%20Gap%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2001%2F27%2F2009&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3c083c957e9f1f/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2009 Joseph Russo
Editorial Archive
Five Levels of Engagementby Joseph Russo, Elliott Wave Technology | February 2, 2009Print http://www.financialsense.com/fsu/editorials/russo/2009/images/0202_clip_image001.gif After a brief update on the Dow, we will share with readers the five levels of tactical engagement, which drive our market guidance and summarizes the working architecture behind Elliott Wave Technology’s forecasting disciplines.
Update on the Dow
Last week, we had mentioned the tentative low (7909) in January.The smaller set of “upward” Fibonacci retracement levels previously added are providing us with clear information relative to the market’s near-term condition.Thus far, the Dow has sternly rejected price as it back tested the larger broken speedline of former support.Prior to collapsing just above a modest .382 retracement rally, the market reached its latest interim peak on Wednesday January 28.Wednesday’s print high of 8405 quickly succumbed to over 400-pts in losses on Thursday and Friday.Though still holding, the price action of last week strongly suggests that the January low is likely to fail in the not too distant future.
Levels of Engagement
Over the years, we have routinely reported on the fast-paced excitement surrounding short-term trading accomplishments, and more recently on the powerful strategy of capturing medium-term moves in bridging the gap; however, we have yet to explain just how each of our tactical approaches are designed to integrate and work together as part of a larger strategic trading operation.Although each level of operation trades effectively as a stand-alone strategy, like Elliott Waves, each of them also comprise elements of larger sequential design.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0202_clip_image003.gifLevel–I
Core Cyclical Positioning
Our fully integrated trading models begin with secular and cyclical assessments of long-term price data.We then execute a methodical technical approach from which to express either a cyclically bullish or a bearish opinion within a given market.As of January 2007 for example, our long-term cyclical assessments turned bearish on the Dow just above the 12,000 level.For the last year, our largest governing core position has been engaged on the short side of the Dow.It will remain there until we observe a reversing cyclical shift.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0202_clip_image004.gifLevel–II
Hedging Long-Term Cyclical Postures
The next level of our strategic model addresses the primary trends residing within the context of the larger cyclical trends.Though they may not affect the direction of the dominant trend, primary moves can be rather substantial.As such, our primary hedging strategy intends to protect and even profit from market movements counter to those positions held in Level-I core accounts.For example as of November 2008, speculative countercyclical hedging operations remain justified in holding long positions in the Dow from the 7650 level.This versatile hedging strategy not only protects, but may also enhance core account performance by trading in the same direction vs. limiting its operation to only taking trade’s counter to those held in Level-I.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0202_clip_image005.gifLevel–III
Supportive Medium-Term Hedging Operations
We discussed this level of strategy in bridging the gap.Similar in purpose to the previous, Level-III supports, protects, and enhances operations taking place at one level above.The tactical approach of this operation addresses the smaller to medium-term trends that reside within the context of primary trends.As a stand-alone strategy, Level-III is well suited for those wishing to engage from a distance.Level-III does NOT require one to monitor price-action during the day.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0202_clip_image006.gifLevel–IV
Short & Medium Term Speculative Opportunities
Without exclusive regard for trend, this level of ancillary engagement focuses on identifying a multitude of measured trade triggers in either direction.The tactics comprising this strategy are visual, providing clear price targets, defense boundaries, and risk levels.At their discretion, traders with clear vision of trade trigger locations may then accurately assess risk vs. reward in order to make best-practice judgments as to which they will take action on.This level of engagement is generally suited to those with moderate or frequent daily access to real-time charts.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0202_clip_image007.gifLevel–V
Short-Term & Day Trading Disciplines
Level-V is also an ancillary operation in the grand scheme of things.It consists of a proprietary short-term/day-trading model that delivers concise one-hour advance notice of entry and exit signals throughout the course of each trading session.Although we consider engagement at every level speculative, day trading is a highly accelerated form of the art.To control the mayhem inherent in such endeavor, our model is predominantly mechanical in nature.A disciplined methodical approach takes the emotional guesswork out of an otherwise shell-shocked war-zone-like environment, and entrusts most of the decision making to the steady hand of a proven mechanical framework.As with all speculative endeavors, periods of poor performance and drawdown are part of the discipline.This level of engagement requires that one have access to live intraday charts throughout the entire trading session.
The Complete Speculative Landscape
In our total commitment to keep one-step ahead of the entire speculative process, we go to great lengths in continually plotting course of the entire trading landscape for all time horizons.Doing so enables us to assess which strategies are currently working, which are muddling through, and which are languishing.Maintaining impartial resolve to such discipline allows us to deliver large profits without self-aggrandizement, and engender caution where necessary to stem losses amid situations of challenge.
http://www.financialsense.com/fsu/editorials/russo/2009/images/0202_clip_image008.gifTrade the Super-Cycle IV-Wave
To safely speculate on, and effectively trade the endless array of unfolding subdivisions forthcoming in SC-IV, one may subscribe to our premium technical publication.
The express focus of Elliott Wave Technology’s Near Term Outlook is to help active traders anticipate price direction and amplitude of broad market indices over the short, intermediate, and long-term.
Over the past three years, we continue to hone the art of dispatching tactical trade set-ups and market forecasting into a consistent, impartial, and immensely rewarding endeavor for those who take the time to embrace it.
We deliver this unique blend of proprietary charting protocol daily, with the express intent to convey timely and profitable information.Our daily reports impartstrategy-specific guidance, which strives to calibrate market impact relative to a multitude of trading signals that are in direct alignment with strategies provided by the author.
Regardless of one’s level of trading experience, users should allow sufficient time to become acquainted with the authors charting protocol, and tactical narratives prior to taking positions.
Communications 2009:
To more effectively convey dynamic trading conditions relevant to our technical publications; we are soon planning to launch complimentary E-letter briefings for anyone interested in following our work.E-letter dispatches will briefly summarize tactical trading postures across various time horizons and trading strategies.The theme of our maiden E-letter will reveal how to sell at major tops, and buy at critical bottoms.Those interested may email us to get an early seat on our mailing list.
www.financialsense.com%2Ffsu%2Feditorials%2Frusso%2F2009%2F0202.html&title=%22Five%20Levels%20of%20Engagement%22%20by%20Joseph%20Russo%2C%20FSU%20Editorial%2002%2F02%2F2009&logo=&logobg=&logocolor=&ate=AT-financialsense/-/-/3c12b44875a410/1/49b44c024eb8e0c7&adt=undefined&content=&CXNID=2000001.5215456080540439074NXC]http://s7.addthis.com/button1-bm.gif Copyright © 2009 Joseph Russo
Editorial Archive
Risk of Ruinby Joseph Russo, Elliott Wave Technology | February 12, 2009Print The Silver Bullet Band
Groping in the dark for the golden gun with silver bullets, should they get their hands on it- the Fed, Treasury, and the political bodies at large, may soon discover they have been on their knee’s pleading to engage in a willfully ignorant round of Russian roulette with a fully loaded revolver.
Inevitably, we envision this high-level failure of leadership bringing about an unprecedented opportunity for the US to raise the white flag on its irreparable financial system, and place disciplines from the Austrian school of economics to task in rebuilding its financial markets.In the interim, it is our hope (or fantasy) that the real (peoples) economy is somehow able to survive with vim and vigor while old school Wall Street deservedly crumbles amid a period of historic restoration.
Before a grand momentous occasion of this sort can save the street, the financial sphere must first hit the very bottom of the barrel.Where IS the bottom of such an epic and calamitous event?History suggests clearly that 80% to 90% declines from peak values are the norm.The sooner it hits rock bottom the sooner it is able to embark upon restoring prudent and sustainable growth path.It is scary, but that simple.
There IS no meaningful floor under the market – only the very bottom
Quite honestly, even we did not think the floor would fall out as quickly as it has.Below is an updated chart we presented nearly a year ago in a piece entitled V-for Vendetta.
Revisiting the Wilshire 5000
If one opens the “Vendetta” link and looks at the March 2008 version of the chart below it will become clear that we got it right, but failed to anticipate the gravity and speed in which the floor under the broadest representation of equity markets would collapse.As the updated chart graphically expresses, the “risk of ruin” is nearer than one might have conceived previously.Moreover, should it play out, we have now defined its target zones.
Below are a few of our prescient quotes from a segment within the Vendetta article, which provided briefings on the state of various markets at the time:
On the S&P 500: from March 10, 2008
The S&P is struggling franticly to hang onto its five-year reflationary uptrend from 2003.Despite a potential breach (and apart from an all-out-crash) this beloved benchmark equity index is likely to get some sort of reprieve from its most recent five-months of bear whipping.
On the NASDAQ-100: from March 10, 2008
The NDX is one of the first widely followed equity indices threatening to post an ominous five-month closing low beneath its five-year uptrend.The presidents “working group” must now do whatever necessary to insure a March close back above the mandated perpetuity of inflationary growth, or risk watching all of its fiat-managed equity indices stumble and fall.
On Gold: from March 10, 2008
Gold is frantically holding above its upper trend-channel eyeing the $1000 milestone, telegraphing to all of financial civilization the necessity to change its ways.So far, no one is paying serious attention.
Prescient Quote Outcomes:
On the S&P- After registering in an interim low of 1256.98 the week of 17-March, the S&P recovered more than 180-pts or 14.5% by mid-May.This was the rather generous and anticipated reprieve mentioned in our timely status briefing.The all-out-crash is still unfolding.
On the NDX- After registering in an interim low of 1668.57 the week of 17-March, the NDX recovered more than 380-pts or 23.2% by early-June.Whether or not this occurred with the aid of the presidents “working group” by September, all were watching in awe as fiat-managed equity indices stumbled and fell.
On Gold- From its 7-March 2008 close of 974.20, Gold went on to surpass the $1000 dollar milestone.In the week ending 17-March, Gold registered an interim high of $1033.90.Ironically, since the US Fed and Treasury still hold all the games poker chips gratis the reserve status of its fiat currency, Gold dipped 34% testing the 681 level in October 2008 as a combination of deleveraging and lemmings rushing to dollars reanimated signs of life in the otherwise dead US currency.
And still scratching our heads
We simply cannot comprehend the logic of leadership.In fostering an egregious 30-year span of hyper-like inflation, they suddenly stop the game, decree rule changes left and right, and then claim that we are facing a threat of a massive deflation, thereby mitigating any negative effects of their current radical plan, which is to embark on the largest inflationary effort ever attempted in the history of humankind.
Four months after its initial pounding, Gold is knocking on the door of $950, up some 40% from its lows, and is again approaching the $1000 milestone despite the continued surge in an otherwise worthless paper currency.
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A reversion to the mean spells RUIN
The new normal, not yet defined, has potential to be truly incomprehensible.The old, so-called “normal” growth path that leadership is betting the ranch to salvage was an artificially created erroneous paradigm that is now just beginning to implode.By default, the US will take down the rest of the Globes financial markets in this extraordinary process of vile but necessary cleansing.The irreparable financial sphere is now poised to deliver itself a tsunami of forced-cleansing simply because of leadership’s failure to exercise the wisdom and discipline to allow the system to cleanse itself.
And they all fall down
Many if not all Global Equity Indices now sport trendline trajectories, which if breached, portend total collapse.Contrary to the false paradigm of what we are now bombarded with as an essential kick-start quest to getting things back to the “old normal”, a simple reversion to the mean will equate to a serious breach for many of these “risk of ruin” trendline trajectories.It is indeed time for truly radical about-face change.Radical enhancements to what caused the problem in the first place constitute no change whatsoever.
Thus far, all seems eerily calm as the powers that be have yet to find the golden gun laden with silver bullets.We should become more concerned after a convincing market rally, which gives off the appearance that their convoluted efforts are actually starting to work.Such a feat would indicate that they finally found their golden gun, and have begun spinning its big shiny barrel frantically, and with hubris of old, awaiting their turn to pull the trigger in the fatal game of fully loaded Russian roulette.
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