一个笨蛋的股指交易记录-------地狱级炒手

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Friday, February 20, 2009STRATEGIC THEORY
REPRINTED FROM THE 20-FEB. WEEKLY BRIEF

Through a series of quick snapshot visual representations, this issue intends to graphically convey what each of our strategies strive accomplish in practice.


LEVELS-I & II
From its historic 2007 highs, we observe Level-I and Level-II strategies in this daily chart of the Dow. The bright purple arrowed lines represent our largest core speculative stance at Level-I.

Note how Level-I core positions maintained long exposure throughout the first leg of declines from the October 2007 top. It is not until early 2008 that core bias shifts to the downside. Circled in bright purple, are general periods of drawdown or non-performance relative to Level-I positions.

On the same chart, we illustrate operations at Level-II with dark purple arrowed lines. Note how Level-II short positions established in July of 2007; preserves the last portion of profits relative to Level-I maintaining its long side exposure. In kind, the dark purple circles illustrate general periods of drawdown or non-performance relative to positions taken at Level-II.




LEVEL-III
In the above 60-minute chart of the Dow, the blue arrowed lines represent the general types of swings intended for capture at Level-III. Despite attempting to capture shorter-term swings that Level-II hedging operations simply ignore, the areas circled in orange represent typical periods of drawdown or non-performance relative to positions taken at Level-III. Though this is a purely speculative strategy, in some sense, one may consider Level-III a hedging operation against positions taken at Level-II.




LEVEL-IV
The chart above illustrates the visual landscape of bullish and bearish trade-trigger set-ups considered for capture at Level-IV. Varied in point-value, size, success, and failure, this purely speculative strategy is somewhat impartial to trends, and instead focuses on chart patterns that present a continual menu of measured speculative opportunities. As illustrated, one can see that price followed direction (free of drawdowns) in more than half of all the arrowed triggers. It is important to note however, that even though they may have provided substantial open profits at one point, at least three of these triggers failed to reach their measured targets.




LEVEL-V (IPV)
The chart above illustrates the (IPV) portion of our extremely short-term LEVEL-V counter-trend strategy. When the market cooperates with this strategy’s mechanical protocol, it intends to capture one to three day trends from counter-trend reversal pivots.

Note that this “always in the market” mechanical approach will be heavily taxed with controlled losses amid sustained stretches of overbought/oversold extremes, general sideways short-term price action, and/or during extreme episodes of pronounced and sudden whipsaw reversals. We illustrate such tax in the two failed reversal signals circled.




LEVEL-V (MV)
The chart above illustrates the (MV) portion of the LEVEL-V counter-trend strategy. As illustrated, this strategy is much faster moving, and makes every attempt to capture as many meaningful pivots as possible. When the market cooperates with this strategy’s mechanical protocol, it intends to capture intraday trends from extremely short-term reversal pivots.

Note that this “always in the market” mechanical approach will also be heavily taxed with controlled losses amid sustained stretches of overbought/oversold extremes, general sideways short-term price action, and/or during extreme episodes of pronounced and sudden whipsaw reversals. We illustrate such tax in the five failed reversal signals enmeshed amid the areas circled.



ANCILLARY STRATEGY REVIEW

Weekending 20-Feb. 2009

LEVEL-III Medium-Term Swing Trade (NTST)
Dow trades – UP 10.7%
S&P trades – UP 10.9%
NDX trades – UP 8%

LEVEL-IV Trade-Triggers
Total Dow trigger-points CAPTURED – 680-pts PROFIT
Total S&P trigger-points CAPTURED – 666-pts PROFIT
Total NDX trigger-points CAPTURED – 92-pts PROFIT

LEVEL-V Short-Term Counter-Trend (MV) (IPV)
Total Dow Level-V points CAPTURED – 17-Feb. 242-pts PROFIT
Total S&P Level-V points CAPTURED – 17-Feb. 32-pts PROFIT
Total NDX Level-V points CAPTURED – 0-pts Captured

Following respectable sell side Profits Booked at the start of the week, subsequently sustained oversold conditions failing to incite a rally lasting more than 90-minutes, has since taxed the Level-V counter-trend strategy with a succession of controlled losses in search of a tradable bottom.

We hope that you have enjoyed this Weekly Brief, and have gained some insight into strategy application and current market conditions.


Until next time…

Trade Better / Invest Smarter…
Joseph Russo
Publisher & Chief Market Analyst
ELLIOTT WAVE TECHNOLOGY


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Thursday, February 12, 2009RISK OF RUIN
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.

Before a grand momentous occasion of this sort can save the nation, 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 we hit rock bottom the sooner we will be able to embark upon a 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 we titled 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 above March 2008 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 frantically 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.

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. From the false paradigm of what we now perceive to be this great kick-start quest in 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 wrap their hands around the golden gun loaded 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 they finally found their golden gun, and have begun spinning its big shiny barrel frantically with hubris of old, awaiting their turn to pull the trigger in the fatal game of fully loaded Russian roulette.

Trade 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 is to help active traders anticipate price direction and amplitude of broad market indices over the short, intermediate, and long-term.


Communications ‘09:
To more effectively convey dynamic trading conditions relevant to our technical publications; we have recently launched complimentary E-letter briefings for anyone interested in following our work. E-letter dispatches will briefly summarize current market conditions and tactical trading postures across various time horizons and trading strategies. Those interested may acquire E-briefings via the sign-up blocks on this blog page.

Until next time...

Trade Better / Invest Smarter…
Joseph Russo
Publisher & Chief Market Analyst
ELLIOTT WAVE TECHNOLOGY


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Tuesday, February 10, 2009HOW TO SELL MAJOR TOPS AND BUY CRITICAL BOTTOMS
REPRINTED FROM ELLIOTT WAVE TECHNOLOGY’S E-LETTER BRIEFS

Welcome to the premier issue of Elliott Wave Technology’s E-briefings. As promised, our maiden letter will reveal just how easy it is to buy low at major bottoms, and sell high at major tops.


The chart above illustrates 4 arrowed “BUY” zones just before and after the lows of the bear market bottom of 2002 and 4 arrowed “SELL” zones just before and after the highs of the bull market top in 2007.

Certainly, anyone with 20-20 hindsight can look back and say with certainty that these critical zones of reversal were the quintessential sweet spots where one would have ideally shifted their largest speculative expressions on the market.

In our view, “investing for the long-haul” is a fool’s game. Recent events and those similar throughout the entire history of financial markets prove without equivocation that financial markets are EXTREMELY SPECULATIVE no matter what ones time horizon may be. To believe otherwise is to gamble heavily on timing ones need to cash-out with that of the markets willingness to oblige.

Following the collapse of equity markets in the fall of 2007, most all global equity indices are now sporting trajectory lines, which harbor the power to wipe them out completely. Well-established historical gauges for “total collapse” targets range from 80% to 90% declines from peak values. We provide identification to all of the Global Markets “risk of ruin” trajectories and their respective downside price objectives (should they eventually breach) in our latest Millennium Wave Quarterly Report.

With this newfound view of reality, we suspect many readers are hell-bent on figuring out a definitive way to engage markets with a level of certainty, which assures that the lion’s share of their core account positions will be OUT, or SHORT amid big market downturns, and IN and LONG amid major market advances.

In general, the hardest thing about buying low and selling high (in any time frame) is setting concise technical boundaries to price data, trusting in what those boundaries portend, and then pulling the trigger when those boundaries are crossed. It is that simple.

As we see it, one must first resolve how they are going to approach executing either one specific or a combination of five levels of market engagement. Although many may prefer a multi-layered approach, using multiple accounts from which to concurrently engage various and at times, opposing levels of engagement within the organized framework of a much larger master trading plan, for the purposes of this briefing, we shall limit our focus exclusively to addressing only LEVEL-I engagement , which is the longest-term time horizon of practical utility.

STAYING THE COURSE
To illustrate the simplicity of our LEVEL-I approach; we will use engagement results in the NASDAQ 100 as example of this pro-active method of assuring stellar profits vs. rolling the dice on a useless buy and hold approach.

Although it is not necessary to have grand strategy visions of plausible market outcomes, acquiring them does add a significant level of confidence in trusting the charts, and executing speculative trade plans with the least amount of pause, doubt, or hesitation.

In addition to cogently applying the principles of Elliott Wave along with a host of additional ancillary technical indicators, the most basic tool enabling one to stay with long-term trends is a simple moving average barometer.

The problem most people have with this very simple rule of engagement is that they are just too lazy to be diligent about checking each week’s closing price to see if it is above or below this simple-to-track boundary measure.

Imagine that. In less than an hour per year, (one minute each weekend) one is able to get LONG near critical bottoms and SHORT near major tops. As with most speculation, this is NOT rocket science, nor some mystical magical method of reading tealeaves, but rather an ongoing exercise in patience, discipline, and resolve. Either you have it, or you don’t. It’s that simple.


BUYING CRITICAL BOTTOMS
Thirteen weeks after the bear market bottom in 2002, Level-I core positions reversed core short positions and went long the NDX @ January’s weekly close above our moving average boundary at a price of 1087. The print low in October of 2002 was 795.25, and we waited for more than three months and a 36% advance off the low to REVERSE HIGHLY PROFITABLE SHORT POSITIONS in order to shift long side entry positions at LEVEL-I.

If anyone is foolish enough to be shocked at the simplicity of this discipline or to harbor disappointment that such an entry does not represent buying “the” bottom, but rather an arbitrary level nearly 40% above, then we suggest those individuals must immediately realign such unrealistic expectations with the harsh realities and disciplines associated with successful ongoing speculative operations.

One must remember that speculating is a constant exercise in odds, which involves constant exposure to risk. When one speculates or invests, one must be willing to risk odds of a measurable loss in exchange for the bounty of financial reward in kind.

Upon pulling the trigger on a LEVEL-I core reversal long signal @ 1087, it was then required that we place our initial stop-loss orders beneath the October 2002 low. Bear in mind that this LEVEL-I long reversal was a major PROFIT-TAKING event from the prior dot.com collapse. In this context, risking an initial 40% after booking MASSIVE PROFITS on a previous core LEVEL-I short-trade is of no major consequence.

Now here is where the hard part comes into play. After the first meaningful buy-signal price-close above our observed moving average, the market immediately submerged back beneath the long-signal boundary for five successive weeks in a row.

Whether we were sitting on massive profits or not, it was still quite challenging to maintain confident resolve to long exposure from 1087 in the last week in January, especially when February ushered in an immediate pullback print low back down to the 938.52 level, drawing down open equity by more than 13%.

Those were five weeks of hell and tense frustration in questioning whether the market was indeed heading back to fresh bear market lows. Such is the price of admission, and a natural part of the speculative process.

If one so chose however, they could have opted to take an immediate 6.4% loss the next week by exiting flat @ the following week’s 1017 close beneath the boundary trigger. Five weeks later, they would have had signal opportunity to enter long again, this time from 1015.

By 31-December 2003, based upon long-entry at 1087, our speculative investment position was up nearly 35% on the year.

The pure take-away is that no matter which discretionary approach one takes in “trading the boundary trigger”, maintaining resolve and discipline in methodically probing for that ever-elusive bottom or top will eventually pay-off handsomely.

No, it does not come easy, and it is quite rare that one receives immediate comfort or validation for all of their hard work, diligence, and exposure to risk. On the contrary, one should expect inordinately high levels of challenge toward their efforts for without pain, sacrifice, and hard work; there are surely no rewards of lasting merit.

Next, we will briefly explore the return trip south following the bull market top in 2007 some four years later.

THE TREND IS A VERY SPECIAL AND IMPORTANT ACQUAINTANCE
The trend is your friend but only if you treat it fairly, respect it, and hold it to task when it pushes the envelope toward boundaries beyond those with which you are comfortable.


SELLING MAJOR TOPS
Sparing much of the blow-by-blow details, this is the very same process of buying bottoms but in reverse. Here we took over 30% in long side profits on core directional positioning, and reversed short at the late 2007 closing price of 1960. In this case, we had ten straight weeks of immediate validation ecstasy as we found our new short expression in the market up nearly 15% by mid-March.

Wait a minute, “not so fast” says the market. Over the next 8-weeks, the market took back all of the validation it had given us, and posted four solid closes back above our sell-signals moving boundary. As if this were not frustrating enough, the market continued to move against our position, and drew down open equity to a loss of nearly 4-%. Again, such is the price of admission and a very natural part of the speculative process.

However, with over 30% in booked profits on our previous long side expression, and a 15% stop-loss on our new LEVEL-I short position, we maintained resolve in holding the former uptrend to task in proving itself more friendly than the recent introduction and prospects of a new long-term downtrend being kinder and gentler toward our shifting speculative bias.

Grand strategy views expressed in the form of Elliott Waves (along with ancillary technical indications) made it objectively easier for us to have held faith in our newfound opinion of the price action, especially considering the prospective alarming outcome if the markets telegraphed intentions were to eventually deliver the full bounty of bearish goods suggested. We trust that all would agree that the subsequent 54% crash into the November 2008 low an adequate delivery of such goods.


THE COST OF ASSURANCE IN HOLDING TREND TO TASK
One may be wondering just what happened amid the two years spanning 2004 through 2006? In sum, a whole lot of NOTHING.

From our perspective, it was a miserable dead-end two years of mistrust, trials, and tribulation in holding trend to task. Whipsaws abounded as the market gyrated in fits and starts leaving the constant question of trust-in-trend forever on the table.

It is times like these where the hardest of work and diligence applied, paradoxically brings the least amount of reward. However, this is the essential cost of assurance that one must pay in order to avoid ruination by a major market collapse, or to find oneself left behind amid a bullish rocket launch thrust to the upside.

Admittedly, in this particular time horizon, the buy, & hold crowd came out on top to the tune of 13%, and without lifting a finger. Ah, such is the allure and seduction of “set it and forget it” “the market always comes back” mentality.

In our view, they can keep that ideology along with the 13% they may garnish from it every couple of years amid any given decade. We would much prefer to toil endlessly for valid assurances rather that succumb to the temptation and false promise of erroneously “sure-things”.


Whipsaw City
The chart above illustrates outcome to our long side market exposure in place from 1087 in 2003 through July of 2004. We reversed posture and booked 32% profit on long side exposure as noted. As the chart goes on to depict, a series of seven whipsaws in trend developed from July 2004 through May of 2006, which on balance, yielded no returns whatsoever.

It was not until the buy-signal of September of 2006 that the trend stabilized from a most horrid and nasty consolidation to one that was much more friendly and easy to get along with. Despite this series of seven core-position-shifts producing the agony of zero results, the 13% cost of assurance drudgery made capturing the final 33% of upside remaining in the cycle that much more rewarding.

We hope that you have enjoyed this maiden issue of our new Quarterly Briefings, and have gained some lasting and realistic insights as to just what it takes to engage the markets prudently at LEVEL-1.

Until next time…

Trade Better / Invest Smarter…
Joseph Russo
Publisher & Chief Market Analyst
ELLIOTT WAVE TECHNOLOGY


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Sunday, March 2, 2008EPIC PARADIGM SHIFT LOOMS
Adaptive Trading and Investment Perspectives
Since we first began offering our market forecasting and analysis services to the public some two years ago, Elliott Wave Technology has been strident in directing our clients focus and attention to the negative wealth effects that eroding fiat-currency’s impose - along with the plausibility of epic consequence, if and when an inevitable paradigm shift against the acceptance of fiat-money were to ever reach critical mass. No matter where we are in a given investment cycle, we must first recognize the inherent nature of that environment, and then adapt our various investment postures with fitting perspective.


Say, you wanna revolution – well, ya know
In our view, as a result of their near-100-year monopoly, and flawed mandate to create public perception of never-ending (un)sustainable growth with price (in)stability, monetary authorities find themselves compelled in administering to an additional and rather absurd mandate - one which must avert an otherwise inevitable and catastrophic credit-deflation of their own making – and they must do so, at any and all cost. Our highly esteemed monetary authorities, boxed in a systemic paradox of their own design, appear to have no choice but to take their alchemy up a notch, and begin to fertilize seeds of hyperinflation in order to save face, and assure that their obligatory mandate will be fulfilled as agreed.

To their credit or shame - depending on one’s perspective, they have successfully staved off this permanently imminent and exponentially growing deflation for more than 30-years running. The monster in which they’ve been so accustomed to taming – has apparently taken on such gargantuan proportion that it is now becoming acutely unmanageable. The seeds of hyperinflation are slowly taking root, and may soon begin to expose themselves to the populace, and spread unabated. Unless our monetary and political stewards begin taking immediate steps toward fostering the adoption of a sustainable, pro-active, fiscally sound and transparent set of practical transitional protocols to construct a NEW sustainable system of money and credit – the current generation will no doubt, be bearing witness in their lifetimes, to an epic paradigm shift reaching critical mass – resulting in a 21st Century revolution to abolish and supplant the present fiat-currency system of money and credit.


Good, but not good enough
Although a new incoming administration with fresh momentum for promised-change may be considered a very good start, such positive intentions alone - unless radical and swiftly acted upon - will not be enough to get the job done in time. It also may be such that there is simply no practical timely solution other than making the necessary preparations to maintain civil order, the rule of law, and containing the masses as crisis after crises pounds the nation toward eventual revolt.

Ain’t no stoppin’us now – we’re on the move
It is our further opinion that this flawed system of fiat-money and credit-creation has long outlived its practical utility, and stands out quite clearly as the NUMBER ONE - SINGULAR SYSTEMIC CAUSE of all systems deemed to be broken, dysfunctional, grid-locked, intractable, or in some stage of pending breakdown or looming collapse. If left inadequately addressed, or simply left to 20th century business-as-usual inflationary tactics - such denials, misguided actions, and lack of visionary leadership will ultimately threaten to impose an acute and prolonged disruption to the well-being of civilizations across the globe for decades to come.

Dual Voice / Singular Focus
Before we continue, we wish to point out that we communicate with two distinct voices on occasion. Our public voice, exemplified by expression of opinion and philosophical query, is often limited to articles such as this one. In stark contrast, our second voice is purely analytical, and all-business. Market based communications within our publications are strictly limited to adherence, and utmost respect for impartial technical assessments as to the state and progress of a wide array of broad market indices. We consider this to be our more disciplined, essential, and relevantly applicable voice. A voice that is steadfast, prepared, anticipatory, on-the-money, and always on-guard.

Takin’ what they’re givin’ cause we’re workin’ for a livin’Despite its current state of pending jeopardy, and though flawed as it may be, each of us by default - must participate and adapt to the current financial systems construct, limitations, and constraints. It is all that we have to work with. One of the cornerstones to our long-term investment guidance has emphasized the general rule of thumb in guiding each of our clients to take steps to assure that their accumulated wealth is protected against the ravages of inflation by means of acquiring a constant and adequate percentage of their total net worth in physical Gold and Silver bullion – under any all market conditions. The bulk of such acquisitions were made when gold was at or below $400 – it now appears destined to strike $1000 and beyond. Such guidance from two-years ago was definitely worth its Gold-weight, and most certainly worth the price of admission!


Pro-active long-term checks and balances
In framing our long-term market analysis, we have adopted a series of mechanically based checks and balances from which to monitor adequate levels of long or short side exposure to broad based financial indices. Our patience and discipline in observing these trigger-points has paid off handsomely per our recent bout of high-level profit taking - whereby we lifted 2/3rds of long side exposure to general equities just prior to the October top. Similar mechanics shall alert us as to when and if to take full cover, and when and if it may be prudent to begin re-introducing exposure back to the long side of equities. More aggressive clients use such barometers to build short positions in various indices.

Global Investors must Align Perception and Reality separately
The three charts above provide a small, relatively short-term glimpse into the early rumblings of a rather subtle paradigm-shift quietly building mass. The comparative studies illustrate the “official” and perceived levels of dollar denominated performance and value metrics. Below is a longer-term data series of the three titans. In the chart below, we have provided self-explanatory annotations as to our long-term forecast for the US dollar.


Aligning Short-Term Trading Expectations in Proper Context
Those committing themselves to short-term speculation should only do so only if they possess adequate amounts of discretionary trading capital, patience, tenacity, discipline, and resolve to succeed. Those seeking constant spoon-feedings of “tell-me-what-to-do-next” guidance - neither willing nor desirous to work for themselves, will generally end-up failing.

All too often, traders prematurely jump to and from the latest system or guru with the hottest advertised hand. Such folly equates to selecting a mutual fund or stock for long-term investment on the basis that it was last year’s best performer.

Over time, and likely after parting with a good portion of their trading stake, participants eventually learn that one way or another; proper endeavor into the art of speculation is predicated on hard work-ethics, acceptable levels of routine losses, and discretionary adherence to adaptive-dynamic trading principles that have proven themselves both reliable and profitable over acceptable periods of time.

Strident Short-Term NTO Traders Resume capturing BIG PROFITS
The ongoing hi-jinks, mayhem, and housecleaning operations continue to rid the market of its most fearful traders. Though many may have cut & run scared - jumping ship at the first sign of rough waters, our swift response in quickly adapting proprietary short-term methodology to the current market environment has paid off smartly for NTO traders. Our adaptive-dynamic analysis provides short-term NTO traders with the audacity, resolve, discipline, and confidence - to stick it out, and come out on top when the going gets tough.

Short-Term Trading Environment: Week ending 29-Feb.
In a word … MANIC

Below is a graphic summary of recent short-term trade-triggers identified via Elliott Wave Technology’s Near Term Outlook . Note how our trade performance has quickly rebounded after enduring a bout of sudden losses in weeks prior. In fact, the lion’s share of February has been fraught with similar challenge. Such adversity along with the resumption of handsome profits is further illustrated by February’s closing profits relative to last week’s sizable $8,000 bounty.


Elliott Wave Technology’s short-term market analysis provides an adaptive roadmap to the dynamic price action landscape five days per week. The Near Term Outlook provides an excellent platform from which speculative short-term traders may better execute their strategies, mitigate risk, and maximize profits.


THE BROAD MARKET UPDATE
We are going to begin this broad market outlook with a long-run value perspective of Japanese equities. The chart below has been extracted from Elliott Wave Technology’s Millennium Wave Quarterly archives. Our chart of the Nikkei is well annotated, self explanatory, and contains a shaded backdrop of the YEN vs. GOLD behind the nominal price series.



Trade Better / Invest Smarter…


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Sunday, February 17, 2008BULLS ON DEFENSE
BULLS FUMBLE - First-Down - BEARS
The near 20% decline from peak to trough in the October 2007 - January 2008 period, marked a potentially devastating turnover for Bulls. After throwing a near interception back in August, Bulls held steady, recovered, then fumbled critically at the October ‘07 highs.

Bears handily took possession thereafter, and have scored an undeniable first-down with the lows hit in January. Despite the aid of statist intervention along with surety of more where that came from, the Bullish contingent finds itself in the very rare and awkward position of playing defense.

Not without a fight
Though Bears may have scored a first-down, they are not very far along in advancing their ultimate campaign. It is likely they are still at their own 10-yard line - with a gargantuan 90-yard battle to win for a touch-down bottom to victory. Not only do Bulls still maintain mountains of steroidal-muscle and influence over the grid-iron at large, but they also have a formidable army of fans and officials working overtime to skew favor back to their collective multi-generational interests. On the other hand, it will be interesting to see the resultant outcome of official’s attempts to reflate what has yet to be adequately deflated.



As the above page extraction from Elliott Wave Technology’s Interim Monthly Forecast clearly reflects, the time for pro-active traders and investors to have gotten defensive was in the summer and fall of 2007. Going forward, participants may get second chance to get defensive at higher levels, or it may also turn out such that the bullish contingent somehow prevails – prompting us to lift our currently defensive posture.

Gaming the System with Options and Futures
Short-term leveraged trading is a highly speculative endeavor that entails significant levels of risk along with extraordinary levels of reward. To prevail in such an arena, one must not only adopt and stick with a winning discipline – but one must also accept that taking ones share of managed losses is a basic element of such engagement.

Below is graphic summary of previous week’s short-term trade-triggers identified via Elliott Wave Technology’s Near Term Outlook .



Elliott Wave Technology’s short-term market forecasts provide an outstanding roadmap of the dynamic price action landscape five days per week. The Near Term Outlook provides an excellent platform from which speculative short-term traders may better execute their strategies, mitigate risk, and maximize profits.

Short-Term Trading Environment: Week ending 15-Feb.
Ironically, the faster markets traverse amid their expanded daily ranges, the slower the larger degree wave counts take to unfold. As the stakes get higher, the premiums and risk to participate in these moves rises accordingly – and so do the rewards.

Re-Capping last week’s trading points:
Following the mayhem and hi-jinks incited by the crisis intervention and emergency rate-cuts some three weeks ago, markets have settled down – albeit in a much larger, more volatile version of its former self.

Sparing the blow-by-blow details of the previous two weeks, our non-discretionary short-term trading discipline has captured over 500 points in the Dow in the week past, recovering most all of the losses experienced earlier in the month.



THE BROAD MARKET UPDATE
We are going to begin this broad market outlook from the value perspective of Gold - one of the last remaining stable benchmarks of equal weight and measure. The chart below translates the value of the Dow Jones Industrial Average when measured against the Gold value.





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 which includes our Global Millennium Wave Quarterly reports, Interim Monthly Forecasts, and ongoing coverage of the short-term Dow, S&P, and NDX five-days-per-week, while issuing near-term updates for the US Dollar, Gold, Crude Oil, and the HUI two times per week.

Trade Better / Invest Smarter…
Joseph Russo
Publisher & Chief Market Analyst
ELLIOTT WAVE TECHNOLOGY


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Sunday, February 17, 2008HIGH-JINKS, MAYHEM, and HOUSE-CLEANING
2/3/2008

Free-Market Dynamics vs. Statist Intervention
In this particular round (likely the start of the 15th), one may assume that at present, the round is even on points. Free Market Dynamics have scored in breaching some minor structural under-pinning’s of the artificially-engineered perennial Bull - and the Statists have scored in response - thus far placing a perceived “floor” against the free markets natural propensity to adequately cleanse abuse and excess.

House Cleaning
Most are familiar with, and fully grasp the notion that in order for a gaming enterprise to maintain profitability, the “House” must always have a profit advantage. This simple concept is no different for the various market exchanges. The “House” must be profitable and prevail in the facilitation of open exchange. If it fails in this endeavor - the House will inevitably collapse, thus rendering no venue for trade – game-over.

The periodic wild price swings, which are most blatantly observed post FOMC announcements, provide a most opportune time for exchanges to “clean-house” as it were. Participants of either bullish or bearish persuasion are pounded out of their speculative positions, and punished by way of sharp trading losses. As the “house” mops up profit, it concurrently achieves the task of shaking out the largest portion of short-term speculators of every stripe.

Long-Term Analysis / Short-Term Queues
Apart from the inherent propensity and survival-of-the-fittest need for regular house-cleaning, short-term queues not only remain an essential element to the frequent speculator – but in addition, play a useful role in the maintenance and hedging of longer-term positions.

Following this week’s short-term trading summary and weekly overview, we will provide a sample of our long-term analysis from across the pond. Elliott Wave Technology’s illustration of the German DAX shall provide example of how maintaining a handle on long-range perspectives can assist both traders and investors alike.

Short-Term Trading Environment: Week ending 1-Feb.
Highlighted by Wednesdays FOMC announcement and subsequent series of violent whipsaw reversals, last weeks trade was a futile but necessary exercise in strategic resolve - producing little if any productive short-term benefit.

Re-Capping last week’s trading points:
The week began with a classic “throw-under” from a typically bullish falling wedge pattern. Despite the tendency for a false “throw-under” effect, the un-biased mechanical nature of trading the price-action compelled us to sell the breach nonetheless. Profits on such efforts were short-lived, and ultimately stopped for a loss.

Just four 30-minute bars off Mondays weak open; we began hitting a succession of elected long positions, re-situating our short-term trading posture on the right side of the market. All of these long positions went on to achieving their upside price targets.

By Tuesday, equity markets were once again in “levitation-mode,” awaiting announcement of the highly anticipated rate-cut stimulus. Those with experience were likely cognizant of their “sitting-duck” status relative to the impending melee following the public FOMC announcement.

Though appropriate for traders to stand aside amid the mayhem generally associated with FED meetings, we intentionally “trade-through” such noise. In doing so, and despite the added risks, we purposefully maintain a constant mechanical disconnect from all such builds of pent-up emotion and second guessing.

Ignoring discretion, instincts, or individual judgments does not guarantee profits – in fact, nothing does. At times, such instincts will pay off handsomely, and at others – be proven totally wrong. In the end however, monitoring all price-action triggers and trade signals generated by our studies, allows us to record and reflect upon the practical utility and real-world results of steadily applying consistent disciplines throughout all market conditions – win, lose, or draw.

Shortly following Wednesday’s public intervention announcement, with high-jinks in full gear, equities spiked sharply higher, and then suddenly collapsed into the close.

Thursday’s open was received with some downside follow-through, only to once again – reverse sharply higher - and remain in a generally sustained rising posture throughout the close of trade on Friday.

Amid a highly unstable, artificially supported price-action dynamic, we continue to engage markets with our usual resolve. Last week, such discipline produced a total of 9 short-term trades. Three profitable buy-side trades, five losses on the sell-side, and one aggressive long position that remains open.

Although clients are free to exercise individual discretion and instinct in selecting positions, it is our job to track proprietary strategy mechanically, based exclusively on the price-action, omitting all discretionary selection-bias surrounding pending news, pattern tendencies, or events.

On balance, January was an enormously profitable month; however we concluded its final week of trade virtually flat, with a net capture of just 12-points in the Dow.

Below is graphic summary of this week’s rather challenging trade-triggers identified via Elliott Wave Technology’s Near Term Outlook .



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 which includes our Global Millennium Wave Quarterly reports, Interim Monthly Forecasts, and ongoing coverage of the short-term Dow, S&P, and NDX five-days-per-week, while issuing near-term updates for the US Dollar, Gold, Crude Oil, and the HUI two times per week.

Trade Better / Invest Smarter…
Joseph Russo
Publisher & Chief Market Analyst
ELLIOTT WAVE TECHNOLOGY


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Sunday, February 17, 2008ORCHESTRATING A BOTTOM?
1/27/2008

A Work in Progress
Well, it is blatantly obvious that the (PPT) plunge protection team, presidents working group – or whatever they call themselves - found it necessary to intervene in the free-market in attempt to orchestrate a bottom.

Where are these guys when markets are a boiling-pot of unsustainable parabolic animal spirit? We suspect during such episodes, they are patting themselves on the back for planting the seeds for such bullish orgies.

Massive Undertaking / Will it be Different this Time
Might the inordinately early rescue efforts (which began pre-Dow 14K, in August of ’07) be telling of the sheer size and scope that this particular bail-out requires?

This alone, may suggest that any short-term temporary political stimulus (even alongside the redundancy of emergency monetary policy interventions) may do little to mitigate what is quite plausibly a much longer-term systemic malady.

When does Change become Revolution
Given that both Democrats and Republicans are in general agreement (prompting both to mount strong campaign platforms of “change”) that a critical portion of our government is fundamentally broken, we wonder how each candidate would define accomplishing “true-change” without radical consequence? Perhaps this may be why (R) Ron Paul is being ignored like the plague by his opponents and mainstream media alike.

In our view, the century for tweaking status quo paradigms has past. The 21st century demands a bold new sustainable vision of truth, preservation, prosperity, and security. Anything less equates to re-arranging the deck chairs on the Titanic.

We suspect change-denied, becomes revolution when a failing government’s inevitable last band-aid-fix and race-against-time falls terribly short - prompting masses of regional populations toward revolt, and general civil unrest as a result of acute and sustained levels of economic pain and hardship.

Following this week’s short-term trading summary, we will provide an update of our big-picture overview to monitor just how well the powers-that-be are executing their efforts to incite and orchestrate a perceived bottom.

Trading amid Intervention
How should traders and prudent speculators deal with massive government interventions in the supposed free-markets? Should they immediately get-long the intervention bandwagon, or should they stand pat on shorts, in attempt to fade the omnipotent fed?

In our view, the answer is none-of-the-above. Despite exerted efforts to manipulate markets, the short-answer is to simply trade the price-action as it is presented – contrived, fraudulent, or otherwise.

Short-Term Trading Environment: Week ending 25-Jan.
Last week’s trade was frantic, excessive, and extremely volatile. The highlight was Wednesday’s 600-point daily range-reversal off a retest of Tuesday’s lows. We warned traders in advance to anticipate potential for larger drawdowns and the likelihood of larger potential losses amid the ongoing melee.

Re-Capping last week’s trading points:
It was apparent on Monday’s market Holiday that trade would open the shortened week with a significant decline.

Though markets were likely on path to putting in a near-term bottom on their own, the emergency intervention efforts simply sealed the deal, and set the stage for Wednesday’s deep re-test and hyper-reversal to the upside.

The Near Term Outlook already had sell-side positions in place from the previous week, many of which achieved downside price target objectives amid Tuesdays sell-off.

We had also been anticipating and actively probing for a near-term low. Tuesday was no exception, as buy-side probes were quantified per our evening report posted the previous Friday.

Yes indeed, we faded the initial intervention rally on Tuesday to capture 300-pts of intraday profit near Wednesday’s lows, while our longer time-frame buy-probes off bottom continued un-stopped.

The mega-reversal rally on Wednesday also triggered at least two additional short-term long-positions, one of which has already reached a rather profitable price objective.

By Thursday, we were back in what appeared to be a business-as-usual “levitation” mode, which often follows major price spikes, especially when fostered and mandated by “the fed.”

Ignoring such political acrobatics, our discipline called for a short-term sell-side position which was indeed stopped for a loss on Friday’s marginal new high.

With our usual resolve, the follow-through high on Friday open was also faded with three separate sell-side trade-signals – two of which have already achieved their downside price objectives on sustained weakness through the close of the week’s final session.

All said and done, we grabbed well over 1300 points from the Dow by week’s end - with one long and two short positions still actively working.

Below is graphic summary of this week’s trade-triggers identified via Elliott Wave Technology’s Near Term Outlook.



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 which includes our Global Millennium Wave Quarterly reports, Interim Monthly Forecasts, and ongoing coverage of the short-term Dow, S&P, and NDX five-days-per-week, while issuing near-term updates for the US Dollar, Gold, Crude Oil, and the HUI two times per week.

Trade Better / Invest Smarter…
Joseph Russo
Publisher & Chief Market Analyst
ELLIOTT WAVE TECHNOLOGY


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Wednesday, January 23, 2008The Song Remains the Same
Hauntingly Familiar
Here we are once again, suddenly embroiled amid a frenzy of financial crisis, and looming bail-out interventions.

The jury is still out as to whether or not this crisis will turn out to be “the big one” that will take down the entire house of cards.

Inevitably, the day will come when no form of economic stimulus or monetary policy interventions will be sufficient enough to provide remedy to the decades of sub-standard stewardship rendered by our elected officials.

Until such a day of reckoning arrives, we can not discount the possibility that the present cast of self-perceived masters-of-the-universe and their monopoly stronghold, which is rapidly fracturing, will prevail once again.

Following this week’s short-term trading summary, we will provide a brief, big-picture overview of the broad market indices to see just how vulnerable they have become in the last three months.

Maintaining Resolve
Another such song that remains the same is the one we sing daily while interpreting the price-action landscape from a short-term trader’s perspective.

Our analysis is purely a function of price-action, which in turn is continually reconciled against our longer-term wave counts and view of overall market structures.

Our proprietary work graphically deciphers the dynamic price-action landscape as it unfolds. We carefully draft the analysis to be free of bias, highlighting most, if not all of the pending and active trade-triggers telegraphed within a given price series.

Short-Term Trading Summary: Week ending 18-Jan.
From a counter-trend rally standpoint – though we continue to anticipate and prepare for one, as of last week - no low was low enough from which to launch a sustainable counter-trend rally.

Coming into last week on the short-side with two successive sell-triggers, a pair of intervening stabs at a tradable low failed miserably.

Shortly thereafter, we were back on the right side of things with another sell-trigger elected on Wednesday.

Thursday provided additional justification to probe for a low. Following a modest rally attempt at the open on Friday, this effort also ended up failing.

Friday’s failed rally-attempt allowed us a rare second chance to enter a previously triggered short-trade (circled) which we failed to identify in our prior days report.

All said and done, we took over 580 points from the Dow by week’s end.

Below is graphic summary of this week’s trade-triggers identified via Elliott Wave Technology’s Near Term Outlook .


THE BROAD MARKET UPDATE (BIG-PICTURE)
On a grand-scale, major equity indices have breached key-minor support levels in recent weeks. They are fast approaching a time frame in which a swift and forceful recovery must get underway in order to re-claim and salvage their fractured minor-degree up-trends.

Failure to do so in a timely fashion, accompanied by an acceleration of losses, risks engendering widespread recognition that a longer-term “trend change” to the downside has embedded itself in the minds of the majority of participants both large and small.


The Near Term Outlook covers the short-term Dow, S&P, and NDX five-days-per-week, and issues near-term updates for the Dollar, Gold, Crude Oil, and the HUI two times per week.


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Saturday, January 19, 2008Buy-Probe / Sell-Probe Entry Rules

For the purposes of tracking signal performance, we shall quantify entry levels for counter trend buy-probes at the the opening price of the third (30-minute) price bar following the low in which the probe was justified.







In kind, we shall quantify entry levels for counter trend sell-probes at the the opening price of the third (30-minute) price bar following the high in which the probe was justified.


In addition to allowing a 15% margin for slippage, commissions, and other related transaction costs to arrive at our net profit estimates, the above probe criteria shall hold us to task, quantify, and provide a better representation of hypothetical performance.


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Sunday, October 21, 2007Opportunity Knocks
CRISES = OPPORTUNITY
There is no better vantage point from which to anticipate the pending course of events than the effective study and interpretation of dynamic price-chart data.

Despite the preponderance of regular interventions, hype, spin, greed, fear, and the like – if properly read, price-chart data contains the answers to most, if not all of the financial-spheres endless stream of perplexing riddles.

At first glance, the nature of price-data behavior can appear rather complex, erratic, and difficult to figure out – let alone trade.

For those willing to take the time to learn how to read the price action effectively, navigating trades suddenly becomes much clearer, and what used to appear as complex and erratic – will soon make perfect sense.

Once one embraces and accepts the crafty nature of common price-action, the success of one’s trading and investment campaigns will improve dramatically.

Following our short-term trading summary and general market commentary, we will present a rare and special series of proprietary trading charts from our subscriber archives.

Our proprietary charts will graphically depict the dynamic price-action landscape as it unfolds. We carefully draft our analysis to be free of bias, highlighting most, if not all of the pending trade-triggers telegraphed ahead of the current price data.

Short-Term Trading Summary
Below is yet another graphic summary of recent trade-triggers and price-target objectives successfully identified via Elliott Wave Technology’s Near Term Outlook publication.




The chart above is not a working analysis chart, but rather a graphical summary created to reflect the net effect of our ongoing analysis.

Following our broad market update, we will provide readers with a rare and unique preview of the actual working charts from which we generate the above types of summaries.


THE BROAD MARKET UPDATE
In light of the 20-year anniversary of the ’87 crash, we thought if fitting to take a “what-if” peak at what damage (or lack thereof) that an ’87-style crash could possibly inflict upon the some of the broad market indices.



The Past 15-yrs in Brief:

The NASDAQ 100


The NDX:
CLAWING AT 2200

Just shy of testing a five-year upper trend channel boundary, this formerly wiped-out index is still struggling in recovery mode.

Due in part to its lagging relative recovery, the NDX is suddenly perceived as an undervalued safe-haven darling with plenty of upside opportunity.

Note that a sudden ’87 style 20% crash in the NDX does no damage whatsoever to the long-term integrity of the uptrend established from the 2002-wipeout bottom.

Should such an event occur, so long as the crash bottom held, it would obviously then mark a fantastic low-risk, medium to long-term buying opportunity.

Bring it on… Bring it ALL on … 1750 – 2200 – 2300 – 2700 – 3000 - 1100… It matters not to us, we’ll be right on top of the action regardless what takes place.

Good thing the fed goosed equity markets higher though - just in case. If they hadn’t, we’d probably already be trading near 1750 after Fridays dismal showing.

Currently, despite all the rage, the NDX is over-extended. Another little heads-up is that bullish percents for the NDX registered a clean sector-wide 6% sell-signal reversal after Friday’s rout.
Short of a very controlled hyperinflationary dollar collapse - forcing equities to adjust higher in response - upside progress is likely to be limited over the very near-term.




What if… the dollar is on the verge of a massive third-wave collapse rather than nearing a sustainable bottom as one might reasonably expect? Two years of hugging tightly below the upper trend channel boundary of a long-term downtrend does not bode well over the near and longer term.

Here we show what The Dow would look like amid an imminent 20% decline. Although a retest of 11K would substantially breach the Dow’s current uptrend, so long as such a low marked a lasting bottom, the Dow’s longer-term trend would remain positive. Ditto for the S&P below.




Oddly similar to the NDX, Gold has broken out to fresh highs for the move as it attempts to reach an eight-year upper trend channel milestone. Should they “let the dollar go” (again), Gold is likely to jump that hurdle, skyrocketing with a host of other tangible commodities, and will not look back until it fly’s past 1200 or better. The only thing to stop it is a fiat paper currency called the United States Dollar.


A SPECIAL PREVIEW INTO THE WORKS OF ELLIOTT WAVE TECHNOLOGY


THREE PRIMARY DISCIPLINES TO ACCURATELY CALIBRATE PRICE-ACTION DATA

1. First, we rely heavily upon our trusted Elliott Wave Analysis to monitor the progression and maturity of wave status at several degrees of trend. We begin our study at the largest degree of trend with long-term monthly charts, then carefully reconcile all of our counts way down to the smallest actionable intra-day wave structures.

2. Secondly, in addition to our dynamic reconciliation of wave counts at all degrees of trend, we monitor proprietary overbought/oversold readings in multiple time horizons. Knowing when price-action within a given set of data is at normal levels of overbought or oversold, provides an important dimension to one’s overall view of the time period under study.

3. Finally, when trading the trenches of intra-day warfare, taking queues from chart patterns and strategically placed trendlines is the single most effective method in keeping one-step ahead of the price-action. No matter the time horizon, each of our charts contains several of these key boundary markers.


Each marker is a potential weapon with a measured level of firepower. We clearly illustrate where all of these weapons reside, and note what kind of firepower they may carry should the price-action pick them up.

Sure, some are duds and misfire, however many of them engage, and never look back until their targets are captured. Similarly, some may engage, retreat, and then lock back on radar moving directly toward our desired price objectives.

In sum, knowing in advance how and where price-action will react is a HUGE advantage. Such an inordinate edge enriches traders/investors with a unique foresight to clearly visualize, anticipate, and prepare for the dynamic landscape of “what-ifs” that reside immediately in front of the price-action.

Such forward-looking, anticipatory foreknowledge provides the 4 essential elements to booking consistent profits while mitigating one’s expected share of losses:

THE FOUR ESSENTIAL ELEMENTS TO BOOKING PROFITS AND MITIGATING LOSS

1. Pre-determine various levels of risk/reward
2. Identify specific entry levels suitable to one’s trading style/risk tolerance
3. Set clear and specific exit targets once a trade is opened
4. Awareness of visual boundary markers from which to manage positions and stops


The proprietary charts presented below will illustrate precisely how we incorporate our three primary disciplines in drafting a continual forward-looking price-action landscape. The studies will also convey the practical utility an ease in which one can incorporate, and bring the four essential elements of advantage into actionable alignment with one’s specific trading preferences.

“The added beauty of our disciplines - is that they perform rigorously, and with outstanding results in ALL time horizons!”

WE HAVE EXTRACTED THE FOLLOWING ANALYSIS DIRECTLY FROM OUR SUBSCRIPTION ARCHIVES WITHOUT ALTERATION:

Based on our wave analysis, in the October 10 edition of the NTO’s Wednesday Evening Post, we were anticipating an imminent near-term top, or a pending breakdown-failure below the lower-boundary of the ending diagonal pattern under observation.

We had already issued justification for low-risk Counter-Trend sell probes the day prior, which were now over 80-pts in profit per the close on October-10.

We also identified prospects for a quick 100-pt rally-thrust to a fresh “throw-over” high in completing the preferred pattern in force.

In the event the market failed such a thrust, and subsequently breached the lower boundary of our triangle, we clearly noted that such a breach would provide signal to a sell-trigger/support-failure citing a point-value target of 150-points beneath triangles boundary marker.



PROPRIETARY CHART FROM ELLIOTT WAVE TECHNOLOGY’S NEAR TERM OUTLOOK

ANTICITPATING A NEAR TERM TOP

10-10-2007 from the Near Term Outlook Wednesday Evening Post



General commentary briefing from the “Wednesday Evening Post”

10-10-2007

“The move down off the high appears corrective thus far – and the market has already rebounded .618 off session lows in the last hour of trade. Two equally plausible ST outcomes are noted. Price-action’s response to the updated dynamic support / resistance trade-triggers will determine short-term resolution.”

PROPRIETARY CHART FROM ELLIOTT WAVE TECHNOLOGY’S NEAR TERM OUTLOOK

NAILING A NEAR TERM TOP
10-11-2007 from the Thursday’s Near Term Outlook

Upon Thursday’s open, the Dow tripped our resting buy-trigger citing short-term target to 100-pts of upside thrust “throwing-over” the upper triangles boundary to complete the ending diagonal.

At the highs of the session, the Dow was up over 119-pts prior to reversing sharply after a brief and fleeting throw-over.

From our trade-trigger entry at the open, the high for the day was less than 2-pts shy of our measured 14,200 target. The move back beneath the upper boundary was a first queue to take early profits or reverse short. Subsequent failure after moving above R-3 provided a second exit confirmation for those still holding longs.

Obviously, aggressive discretionary traders may have opted to SAR (stop and reverse short) upon the Dow’s re-entry beneath the upper boundary, or alternately upon failure of the Dow to hold above its intra-day move north of R-3’s resistance boundary.



Full commentary from Thursday nights Near Term Outlook

Dow Short-Term Trading Chart: Comments posted on Thursday, October 11

Wave Counts / Trade-Triggers / Targets:
“If one were to review yesterday’s Wednesday Evening Post, one would find it hard to argue just how perfectly we projected the short-term ending diagonal pattern in development.”

“From here, R-1 defends the 13879 target, while S-1 marks boundary to another sell-trigger/support breach citing an additional 240-pts of downside.”

“R-2 marks a likely retest level at the .618 retracement area from yesterday’s low.”

“A sustained move above the .618 level is likely to mitigate near-term downside follow-through – and threaten new historic highs.”

“At its apex, R-3’s dual markers identify a (pending) falling parallel upper-boundary of resistance along with a modestly rising trendline associated with the marginalized 14305 target.”

IP Counter-trend Probe Campaigns / Targets captured:
“ST/CT traders probing short from 10-9’s alert, have likely taken at least 100-pts profit near the lows or by the close of Thursday’s trade.”

“Once a ST probe follows through as desired, and momentum reaches a ST extreme – CT-traders must be quick to take profits – or at least protect the lion’s share of money earned so as not to give it all back in a day.”

“Since our last ST buy-trigger from yesterday’s evening post only captured 98 of the 100 points targeted, we cannot claim 100%-perfection – but we came pretty-damn close! FYI, the trigger to cover those longs (for PROFIT) was price action coming back beneath the R-3 level.”

We will end our proprietary chart preview with Friday’s outcome (below) to show the relative actionable accuracy of the previous day’s comments above.

Take-away points from Thursday’s comments relative to Friday’s price action:

“ST/CT traders probing short from 10-9’s alert, have likely taken at least 100-pts profit near the lows or by the close of Thursday’s trade.”

“Once a ST probe follows through as desired, and momentum reaches a ST extreme – CT-traders must be quick to take profits – or at least protect the lion’s share of money earned so as not to give it all back in a day.”

1. For Short-Term Counter-Trend traders acting on 10-9’s sell-probes, which were over 100-pts in profit per Thursday’s close, our suggestion for such traders to have taken GOOD QUICK-PROFITS on such positions near the previous lows or by the close, proved accurate.

2. We had graphically noted in the previous chart, that the Dow was at or nearing previous levels of short-term oversold that had previously spawned snap-back rallies.

3. On Friday, at its highs, the Dow was indeed snapping back – up over 85-pts intraday and closed the session up 77.96.

“A sustained move above the .618 level is likely to mitigate near-term downside follow-through – and threaten new historic highs.”

4. The above reference to a sustained snap-back rally beyond the noted .618 retracement level also proved accurate.

5. The rally on Friday (shown below) approached the .618 retracement level referenced. Should one care to look, trade on the following Monday breached the .618 level by whisker in the course of a single 30-minute bar, then subsequently sold off confirming the stated inference of near-term downside follow-through.



We do not predict prices, nor do we issue specific buy and sell recommendations in advance of trade-triggers electing, or upon price-targets achieving objectives.

Although we graphically identify explicit entry-triggers along with point-values and price-target objectives, decisions to place orders and manage trades through fruition are the sole the responsibility of each individual.


The Near Term Outlook covers the short-term Dow, S&P, and NDX five-days-per-week, and issues near-term updates for the Dollar, Gold, Crude Oil, and the HUI two times per week.


Opportunity is knocking … Anyone home?


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Saturday, September 15, 2007A PERFECT STORM OF OUR OWN
The Elliott Wave Technology Website has been whipsawed - taking a sizable-hit resulting from a spate of technical glitches experienced in the June, July, and August periods.

Unfortunately, those we richly compensate and entrust to procure all technical matters concerning the “web,” have inadvertently failed us. This has cost us dearly in countless ways.

What we have recently experienced was quite similar to that of a good trade gone bad - forcing ones hand at sucking-up a sizable unwanted loss, leaving the sting-of-the-hit to linger a bit longer than it otherwise would.

Briefly, the worst of our unexplainable technical glitches enabled a random and intermittent portion of new and existing subscribers to gain initial, and renewal access to content without charge.

Our developers have assured us that all is now firmly under control - and that any outstanding glitches will cycle and cleanse themselves through the system by Septembers-end.

Those affected will likely receive a default “declined payment” e-mail notification, and will need to re-order subscription access from the member login page. For those requiring assistance in doing this, just go to Managing Your Subscription for a simple walk-through.

No one is specifically to blame – instead, it is one of those situations better chalked up to the “stuff-happens,” realm. Frankly, it is behind us at this point, and we have already moved on to our next trade.

Building A Large, Elite, and Fast Growing Network of Profitable Traders and Investors:
Since April of this year, our membership clientele has more than TRIPLED! Our growth has been phenomenal.

We believe this success has to do with our general philosophy to over-deliver on our commitment to provide the most accurate and timely forecasting guidance available anywhere on the net. We continue to fulfill this trusted obligation with extremely high honors.

We have recently added DAILY MARKET COVERAGE for short-term equity index traders providing a continuous FIVE DAYS A WEEK of seamless market coverage!

In addition, we have recently provided a blog page where we share and answer questions relative to trading, proper interpretation, and application of our unique – easy to adopt methods of analysis and trade.

Due to sheer volume of comprehensive information and inordinate time required to procure, we have pared back our comprehensive NTO to two issues per week, but added a third Evening Post Briefing for the weekends.

The enormous growth of our subscription base provides testament to our successful brand of forecasting. This is likely a result of the consistent level of PROFITABLE TRADING OPPORTUNITIES identified regularly in all of our publications, and across every time-horizon.

With modest efforts and steadily honed money management disciplines, subscribers should have no trouble at all extracting inordinate multiples in excess of 10X to 1000X-times the cost of subscription premiums.

As one of our subscribers has recently put it:

“The content provided is undoubtedly efficient, and diligently composed; - only a nitwit could lose money following the advice contained therein.”

Exemplified beautifully in the Crude Oil chart provided to NTO subscribers back on August 21, 2007 - the following publication excerpt provides perfect testament to the above client’s rather impassive quote.

The graphic below, though reduced in size with marginally legible text, is an actual page extraction from our Near Term Outlook publication – the larger degree wave-counts and price-targets were removed, as they are naturally reserved for clients’ eyes only.



Bubbling Crude
After plunging precipitously for the two weeks prior, the crux of our August 21 report for Crude Oil was anticipating bottom to a 4th wave down, and included a secondary follow-up issuance of a BUY SIGNAL against the 68.90 low.

As we all know by now, by last Thursday - September 13, just three short-weeks from our call to BUY CRUDE at $69.00, Crude closed that session at 78.78 – up 9.78 or 14.17%.

Those clients trading futures earned upwards of $9000.00 per contract basis this singular forecast! Those trading 2 contracts earned $18,000.00, and those trading more than two contracts made more money in three weeks than the majority of Americans earn over the course on an entire year!

Conservative clients trading the non-leveraged (USO) oil-fund ETF had opportunity to earn in excess of 14% returns in three short-weeks! A non-leveraged ETF trade yielded clients $1,400.00 in profit for each multiple of 10K invested.

Most fund managers would be thrilled to achieve such numbers over the course of an entire year let alone three weeks - we often produce such performance metrics in less than a month!

What its Worth to You, is all that matters
What might one be willing to pay for such consistent and profitable forecasting? What is the true worth of such anticipatory guidance in the market place?

Obviously, worth and value will vary greatly from person to person. For instance, the futures trader employing a multiple-lot trading strategy would likely be willing to pony-up a much higher premium than the non-leveraged fund trader would.

In either case, basis the single example above - earning in excess of $9,000.00 per contract for the futures trader, and over $1,400.00 per 10K invested for the non-leveraged fund trader, we trust that both would be more than willing to part with a 5% – 10% tributary commission from their bounties for having access to such credible, consistent, and reliable information.

On that one trade alone, this would translate to $450.00 - $900.00 from a single-lot futures trader’s profits, and $70.00 - $140.00 from the non-leveraged fund traders profit per 10K invested.

Given that one-hundred such trading opportunities may funnel throughout our publications in a given month, how then might one begin to place value and worth on such and endless wellspring of opportunity?

We Stand and Deliver
The bottom line is that anyone who has experienced, followed, and tracked the net-profit-effect of our work knows the level of skill, time, efficacy, and production value that goes into each of our publications.

Admittedly, ours is not a “high-gloss,” publication, nor one filled with well-written, entertaining prose discussing economic fundamentals, or providing interesting philosophy for one to ponder.

Instead, the information from our publications reflects the raw actionable substance provided by price-action itself, and gets straight to the day-to-day realities facing traders and investors of every stripe.

We meticulously survey and graphically draft the price-action landscape – then proceed to set forth a consistent forward-looking road map, inclusive of all obstacles and detours minus any emotional table-pounding biases.

Time to Step Up to the Plate
In light of the inordinate amount of time expended producing our reports in concert with the explosive profit potential resident within each publication – access premiums will be doubling across-the-board in the very near future.

Boys to Men
For those with any trading/decision making ability whatsoever, such news shall be deemed meaningless - shrugged off as a non-event. For those who continually struggle in “getting the knack of things,” our revised publication premiums will likely add insult to injury. So be it…

If one is unable to quickly grasp our consistently proven market message and continually fails to translate such information to regular profit margins that utterly dwarf membership premiums, then it is likely that such individuals have no business trading the markets in the first place.

Make It So
The Fall is here, and the time is right – so let the games begin… ENGAGE


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Friday, August 17, 2007Refueling Psychotic-Optimism
Until September, this shall be our last public article prior to our return from hiatus after the Labor Day holiday.

Fed Saves Markets From Near-Meltdown:
In light of the Feds clandestine shattering of the discount window in the wee-hours of Friday morning, we really do not have much to add to last weeks rant about Ponzi-Regimes coming to the rescue of grossly mismanaged markets.

Down how much? – And already requiring immediate emergency rescue measures?
Last Thursday, stock markets were off their historic highs by around 10%, and most major metropolitan housing-markets are down anywhere from 5% - 10% at best.

Certain regions like Manhattan, have experience little if any downward adjustment to their mega-bloated values - some 200% - 300% above their former 1998 values.

Nonetheless, such minor disturbances amid a perpetual debt-based prosperity-paradigm require immediate intervention by central banking cartels – with endless assistance to follow as needed.

Why Not Intervene When Markets are rising in Parabolic Buying-Panics?
There seems to be no cause for concern when various housing markets ballooned over 200% in the course of 6-short years – or when equity markets rise in extended parabolic fashion.

As far as housing is concerned, such rapid appreciation of monolithic proportions are one-off historic anomalies requiring serious downward adjustment however, most everyone would ignorantly wish to return to such a mirage, and forever embrace such folly as the “norm.”

Making Waves:
In our view, the only positive effects of such meddling are the unmistakable footprints of Elliott Waves - which remain clearly marked in the wake of price action – regardless of intervention.

The Week in Review:


The NDX:
The NDX relinquished last week’s trendline big-time. Though violated substantially, long-term trends remain up.

The rebound off the weekly low, attributable in large part to the Fed’s continued interventions, left the index down 1.89% on the week.

We suspect strategic short-sellers would beg, borrow, and steal to gain equal favor of such omnipotent forces in incessantly working toward their fundamental causes.

However flawed, traders must be cognizant of this inherent bullish prejudice, and adapt accordingly.

Below is a common example of our approach in adapting to such flaws:
The chart below documents last weeks short-term trade-triggers and price-targets captured from Elliott Wave Technology’s Near Term Outlook.


For active traders of all time-horizons, there is no better road map for navigating market indices than the Near Term Outlook.

Transparency, disclosure, and selling the truth
Bear in mind the above illustration reflects a portion of trade set-ups clearly identified by our adaptive short-term price forecasting methods. It does not depict nor represent a sequentially hand-delivered trade recommendation-history for those yearning for blind-faith trade instruction.

There are no free rides in life - especially when it comes to financial speculation
Although we set forth our short-term market forecasts with stunning clarity, traders still need to work the provided landscape vigorously in order to extract the large bounties regularly offered by dynamic markets.


Now let’s see how the rest of the majors performed during last week’s funk…


After setting fresh multi-year lows just a week ago - following news that its manufacturers are playing a key role in “rescuing the world” from the effects of their “marked-to-nothing-but-faith” products and mutant offspring - The Dollar has curiously begun to rise. Such a show of confidence leads us to wonder if Mr. Bernanke has been consulting with Mr. Rubin on recent matters.

The action over the past four-weeks has The Dow looking more like a “slinky” than the premier equity market of the globe. Although overwhelmingly bullish longer-term, the Dow continues to show signs of vulnerability over the near-term.



A likely result of the feds interventions along with sudden dollar stability, Gold resolved its double inside bars to the downside – returning to its intermediate-term coiling pattern.

In viewing the 6-month weekly bar chart for The S&P, it certainly looks like the beginnings of “crash” - longer-term however; this ailing index also supports a major long-term uptrend.


Until September …

Trade Better / Invest Smarter…

Joseph Russo
Publisher & Chief Market Analyst
ELLIOTT WAVE TECHNOLOGY
www.elliottwavetechnology.com
Email Author












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Friday, August 10, 2007Ponzi-Regimes to the Rescue
[size=85%]Kindly indulge us - as we pen this week’s intro in the spirit and humor of a Dennis Miller-rant.

We cannot help but find it amusing that:
Those institutions whom are complicit in adhering to paradigm-doctrines - passed down and mutated from the founding architects, masterminds, and mass-producers of worthless fiat-paper, (global central banking cartels) suddenly find it essential to “rescue” over-bloated, and still highly-overvalued markets from a crisis of inevitability (on par with 911?) spawned from the very godfather of Ponzi-Schemes from which they steward.

In a rather twisted analogy: [size=85%](Wrapping up the rant)
The above is akin to continually re-appointing a board of known-pedophiles and sex-offenders to preside over a conglomerate-monopoly of worldwide playgrounds and child-care centers. Having provided them with full-unfettered power in maintaining a hands-on controlling interest, for reasons yet unknown to humankind, we then collectively harbor the brilliance of mind, to rely exclusively upon this board for remedy and solution to the vicious cycles of ongoing child-abuse experienced at their facility. Are we all completely insane?

Making Waves:
From our perspective, the only positive affects of incessant meddling in supposed free-markets – are the unmistakable footprints of “Elliott Waves,” which remain clearly marked in the wake of such malfeasance.

[size=130%]The Week in Review:

General Equity Indices –
Singing to the Global Cartel of Central Bankers…

…“Catch Me Now - I’m Falling”

The NDX:
After treading briefly below last weeks support-line, the NDX managed to close spot-on this critical trendline boundary.

Barley hanging on to what remains a zone of comfort inside the boundaries of a long-term bullish-uptrend channel - the NDX has its work cutout in the days and weeks ahead.

Despite cries of Armageddon:
The Bull has been stirred – but not yet shaken
One should remain opened to maintaining general levels of collective psychotic-optimism in the promise and hope of Fed-led rescue efforts – however, one should also continue to prepare for the worst in the event such omnipotent forces of world influence flat-out fail.

At the pilot’s continued request, please keep your safety belts securely fastened, and your seat backs in their standard upright positions.


A Financial PANIC and Crisis-Situation on par with 911?

They have got to be kidding us, right?

In our view, the current crisis has spawned from institutions misguidedly adopting a perpetual debt-based prosperity paradigm. Such a systemic-born crisis’ will inevitably require dismantling, and renovation from the bottom up.

The recent malaise is nothing more than another layer upon which cumulative miss-steps have been taken over multiple decades in attempt to preserve, subvert, and control the natural order of what used to be free-markets.

Authoritarian Free Enterprise aside
Elliott Waves continue to lay their footprints with glaring clarity. The immediate $64-trillion-dollar question - is whether this antiquated, and elite system of inevitable misfortune, has finally placed its last straw atop the peoples back.

We shall soon find out whether the markets will be printing fresh historic highs by years-end, or begin unleashing a truly debilitating period of reckoning for many years to come.

Elliott Wave Technology remains at the forefront in producing unrivaled, well-organized, and stunningly accurate guides to long and short-term market forecasting.

For those compelled to participate and profit from such volatile crisis-bearing opportunities, acquiring a reliable source of adept and impartial navigation council will provide the all-essential trading-edge required to adapt profitably - no matter what the market may deliver.

In addition, such practical guidance will render long-term utility in how one perceives and engages financial markets in any time-horizon.

The chart below documents last weeks trade-triggers and price-targets captured from Elliott Wave Technology’s Near Term Outlook.




For active traders of all time-horizons, there is no better road map for navigating market indices than the Near Term Outlook.

As evidenced by recent news of significant losses at “black-box” quant-funds, no mechanical trading systems or algorithms can anticipate directional moves with the agility, speed, and precision rendered by our adaptive method of short-term forecasting.


Now let’s see how the rest of the majors performed last week…

After setting fresh multi-year lows earlier in the week - amid news that its manufacturer is taking a leadership role in “rescuing the world” from the affects of its products and offspring - The Dollar has suddenly gathered some strength.

After printing fresh lows for the move on Friday, The Dow managed to close marginally higher on the week, but remains stuck beneath the base of its previous trading range. Although overwhelmingly bullish longer-term, the Dow continues to show signs of vulnerability over the short-run.



Gold failed to follow through on last weeks feeble attempt at breaking above the previous weeks inside bar. As a result, we now have a potentially more powerful array of “two successive” inside compression bars. Next week should prove interesting.

Since it has been one of the worst recent performers, it is only fitting that The S&P closed the week with a wider margin of cushion above its recently muted trend channel boundary.


Until next time …


Trade Better / Invest Smarter…
Joseph Russo
Publisher & Chief Market Analyst
ELLIOTT WAVE TECHNOLOGY
http://www.elliottwavetechnology.com/
Email Author






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Saturday, August 4, 2007Volatility Delivers Wake-Up Call to Financial Sphere

By Joseph Russo

ElliottWaveTechnology.com

8/3/2007

Likely resulting from decades of imprudent financial engineering, the uncertainty-surrounding discovery as to the potential extent of collateral damage from such shenanigans remains immeasurable and unknown.

Similar to the engineers about to embark on months of investigation as to the cause of the sudden bridge collapse in the city of Minnesota - the omnipotent financial sphere is just beginning to access whether or not the minor structural fractures, (which market volatility has so blatantly revealed) could possibly morph into a sudden and total collapse of similar dimension.

The Week in Review:

Highlighting the NASDAQ 100

General Equity Indices Threaten Notable Breakdowns going forward
Friday’s dismal weekly close did nothing to improve upon the numerous technical underpinnings that were riding on last week’s performance.

Although the NDX broke down below last week’s trendline, we graciously offer it a second such boundary to prove itself.

The low close beneath levels of the past seven weekly bars, has evoked a “sell-signal” basis the good old-fashioned 4-week rule. (John Murphy’s Technical Analysis of Financial Markets)

Breadth stinks quite frankly - as all of the major Bullish Percent Indices (including the Dow’s) have flagged sector-wide sell signals upon significant reversal breaches below their overbought 70-levels.

Despite capitulation-optimism surrounding high VIX/VXN readings relative to recent years, historically, the VIX becomes contrarian-bullish at levels above 30. Still a ways to go…

Apart from all of the plausible doom and gloom, longer-term uptrends remain firmly in tact, and at some point, a major reaction rally will prepare for take-off.

Although one should maintain general levels of optimism (after all, the bull is NOT dead yet) one should also be prepared for the absolute worst.

At the pilot’s request, please keep your safety belts securely fastened, and your seat backs in their standard upright positions.




post 2002 - Is volatility attempting to return to historical Norms – AGAIN!

Such question will be answered in due time, and will be contingent upon success of the financial spheres fresh layers of adopted rescue attempts.

In the interim, we continue our own brand of “business as usual.” The chart below documents archived trade triggers, and recent price target captures from Elliott Wave Technology’s Near Term Outlook.





For active traders of all time-horizons, there is no better road map for navigating markets than the Near Term Outlook.

To our knowledge, no mechanical trading systems or algorithms can anticipate directional moves with the agility, speed, and precision rendered by our dynamic method of short-term forecasting.

Re-read “Navigating Near-Term Volatility” for a refresher on just how we forecast and anticipate critical market turning points.


That said - Let’s see how the rest of the majors are holding up…

After a brief peek above last weeks sharp downtrend line, the Dollar reversed sharply lower on Friday - threatening to retest multi-year lows.

The Dow (hands-down market leader since 2002) gave up further ground last week – closing dangerously below its former trading range. Although still overwhelmingly bullish longer-term, the Dow continues to show signs of stress.


Last weeks inside compression bar for Gold, has potential to set-off major fireworks in either direction for the week ahead. Watch the US-Fiat Dollar for clues, and hold on to your hats.

The S&P looks downright ugly! Since it has destroyed its previous two uptrend lines, we shall grace it with a third, and “last chance” boundary to maintain any semblance of upward trajectory.

A special note to current and prospective NTO clients:
Elliott Wave Technology prepares detailed analytics for the major indices each Monday, Wednesday, and Friday - prior to the open.



NTO members who actively trade indices short-term, are encouraged to check our blog-page on Monday and Wednesday evenings - after the close.



These bi-weekly, "post-close" updates will relay actionable developments, which may have arisen during the previous session that may have impact in advance of trade on Tuesday's and Thursday's.



Until next time …


Trade Better / Invest Smarter…
Joseph Russo
Publisher & Chief Market Analyst
ELLIOTT WAVE TECHNOLOGY
http://www.elliottwavetechnology.com/
Email Author








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Tuesday, July 31, 2007A brief message about "our" Blog-Page
GENERAL PAGE NOTES:
At the top right, we have set up an archive index for posts. We suspect this index will enable one to access the complete archive.



At the bottom of the page there are two links-

One is for subscribing to e-mail post-notifications titled: Posts (Atom)



The second link titled: "Older Posts" will list all previously archived posts.



To keep the page somewhat short, and away from a perpetual scrolling screen, we will limit the initial pageview to that of the last one or two posts.

If you prefer a longer scrollable page consisting of more than just the last two posts, let us know and we can increase the number of posts listed.



DYNAMIC DEVELOPMENT
The Elliott Wave Technology Blog will develop based on the demand, requests, and input from all those who wish to participate in shaping it.





Upon launching, we are initially inclined to reserve the blog for members, or by invitation only to those who wish to consider membership. Should existing members wish to change or modify these attributes, we will make such accommodations.





Below is a short list of general goals of the page. We encourage users to provide additional suggestions for adding value in addition to the goals we have listed below. For starters, here is what we are striving to accomplish for our readership:


GENERAL INTENT
The purpose and intent of the blog will be to serve the interests of existing clients, and to provide select prospective members a place to become better acquainted with our brand of services.




VALUE
The blog-page will add value, and act in complement to our membership services and real-time charts posted at stockcharts.com.

The page will be a place for us to post special interim reports should market conditions warrant.

Once subscribed to the blog, users may choose to receive automatic e-mails, or set-up direct feed preferences the moment new items have been posted.


STANDARD FAIR
Under normal market conditions, the blog page will serve to provide a convenient venue for us to comment on select markets in between our regularly scheduled reports.

The blog page will NOT be used as a chat room, guru-bashing corral, or any other form of non-productive banter.

Members and prospective clients alike, are encouraged to share experiences, thoughts, and offer suggestions and comments on site and market related matters.


EDITORIAL ARCHIVES
We will post select published articles, and provide commentary threads relating to various topics that members wish to explore further.


HELPING HANDS
We strongly encourage all those interested in authoring, moderating, or administering to various aspects of the page to contact us directly to discuss such arrangements. We can use all the help we can get!


CONVENIENCE & UTILITY
The page will of course contain several convenient links to member login pages, subscription management services, our stockcharts page, along with other relevant or user suggested links.




We shall do our best in adding value through the adoption of our blog-page, however it is essential that we attain your assistance, input, and feedback to achieve optimal results.





Looking forward to your comments and contributions,




Joe



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Tuesday, July 31, 2007NAVIGATING NEAR-TERM VOLATILITY

By Joseph Russo

ElliottWaveTechnology.com

7/30/2007

Down and Dirty
Nothing can be more exhilarating or rewarding than trading profitably amid fast-moving markets with expanding daily ranges.

Conversely, there can be nothing much worse than having to take personal responsibility for having your speculative trading account destroyed in a matter of months, weeks, days, or hours.

Below, we have provided a chart history of the Dow Industrials illustrating results of Elliott Wave Technology’s recently archived trade-triggers and price-target captures from the Near Term Outlook.
Our Complete and Objective Focus
We provide all analysis with patience, discipline, flexibility, and proven adaptive dynamics. Since we do not “trade” that which we forecast, we harbor no emotional or financial interest in the outcome of any particular set-up or guidance measure.

Our only focus is to identify all evolving bi-directional trading dynamics. Simply put, we effectively map out variant market paths, patterns, and price projections before they unfold.


Do You Have What it Takes
There are a several essentials, which are continually required to execute profitable trading campaigns in any market climate. All of which carry proportionately more impact amid heightened periods of market volatility.

In certain cases, it may be prove wise to step out of the fray to avoid expanding levels of risk exposure.

For those maintaining strong directional opinions, and are intent on exercising those views in the marketplace, allow us to suggest a short list of attributes to assist with such endeavor.

First and foremost, one should make diligent attempt to abandon all strong directional opinions.
Although such efforts are in direct opposition to ones initial motivations to trade, the less emotional commitment one has to specific outcomes, the better-prepared one will be to adapt to rapidly changing conditions.

Additionally, one must fully accept the increased risk, and be steadfast in limiting losses, while maintaining swift and decisive ability to accept respectable profits when presented.


The Bottom Line
By no means is the process a cakewalk. It requires a lot of hard work and diligence on the part of the analyst, and an equal amount of effort and diligence on the part of traders.

We routinely map, and archive all of the highest probable outcomes. All short-term trading charts clearly illustrate trade-trigger locations, price-targets, and risk-levels.

How Does it Work
Often times, traders will be required to exercise discretion and trade style preferences when conflicting signals of equally plausible merit present themselves.
For example, say a market is overextended, and both the wave-counts and momentum readings suggest it prudent to evaluate campaigns to launch relatively low-risk counter-trend trade probes. At the same time however, various price patterns exist, telegraphing prospects for a further advance in the direction of the current trend.

What we are called upon to consistently deliver
As such, our primary obligations are to alert traders of all pending prospects, and to provide them with as much ancillary information surrounding each.
As the market unfolds, we maintain responsibility for monitoring status and progressive conditions relative to all working targets, forecast preferences, and probes.

Each session brings with it fresh data points forming a continual dynamic evolution to every given price series. Each new set of data-points either supports or negates progression toward achieving targets outstanding.

In addition, all new price action lends itself to generating new signals, be they bullish or bearish. Naturally, we are also obliged in keeping traders informed of every new development be it large or small.
Upon achievement, failure, pending, changing, or vacillating price movements surrounding each signal, trigger, and target - we graphically update our charts with easy to grasp color references and label tags.


How are traders expected to take advantage of actionable information
Despite the enormous advantage of possessing a concise mapping of trade triggers, price targets, and signal alerts, it remains the task of the individual trader to prudently access and appropriately align his or her money management, trade style, and risk tolerances with the opportunities routinely presented.

Once a position is on, traders must then take responsibility in managing their trade according to similar criteria along with the evolving market dynamics monitored by the outlook.


Examples
Suppose your strategy and opinion favor a counter-trend set-up. Having as much information as to how much further the market may extend in opposition, will provide valuable insight as to where it may be most prudent to provide cover prior to launching counter-trend campaigns.
If such levels are outside of your money management boundaries, you then have critical foreknowledge in aiding decision for either placing a trade with acceptable levels of risk, or passing it up until conditions improve.

Conversely, your strategy and opinion may favor trading momentum in the current direction of trend.
Not only we will have defined clear trade-triggers and price-targets for such set-ups, but we will have also provided you with ancillary information regarding risks and boundary levels associated with the opposing counter-trend signal.
Should your short-term trade elect and hit target - great! However, what happens if your trade elects, but your target fails to achieve prior to the market turning against you?
Having clear understanding the opposing counter trend forces at work, knowing what may set them off and where, will provide you with immense advantage in knowing when to take early pre-target profits, cover losses, or completely reverse your position on the side of the counter move.


Can You Sense the Truth
The levels of accuracy and achievements depicted in the chart above are archived, and routinely commonplace in the Near Term Outlook. What the chart does not depict is a systematic record of specific time-sequential buy and sell-recommendations.
Expectation or allusion to such would be unrealistic, impossible, flat-out hype, and a rather insulting misrepresentation of services rendered.

The art and science of effective short-term forecasting is compromised the moment an analyst embarks upon issuing individual trade recommendations, or becomes overly emotional relative to his or her ongoing duties.
To do so would be akin to taking an emotional stake in the outcome of each specific recommendation or market call.

Further complicating such endeavor would be the follow-up necessity required by the analyst in rendering specific ongoing management advice for every cited market call.

Bogged down in arriving at, and administering to a one-size fits all trade management doctrine; such analysts are likely to lose touch with their craft and forecasting acumen.

Caveats
In order to render and realize the competitive edge inherent to the highest levels of bi-directional accuracy in forecasting guidance, there will be times when:

1. General guidance turns out to be flat-out wrong. (very rare, but possible)
2. Multiple opposing signals and/or trade triggers are present at the same time.
3. An identified trigger fails to meet its target objective or flat-out fails.
4. Counter trend signal alerts require a succession of low-risk probes prior to paying off.
5. A position taken from guidance will experience an uncomfortable level of drawdown prior to reaching its intended target.
6. Traders inadvertently mismanage campaigns or tactics even though guidance targets ultimately succeed.
7. Traders will not be at resource to enter orders at the time a signal triggers.
8. Set-ups and triggers develop between regularly issued posts.
9. Traders become over-confident and begin faltering after a string of big wins
10. Nothing seems to work in your favor and times when campaigns string together with stunning brilliance and perfection.


In closing, to maintain a true and lasting grip on where the major markets are heading in both the long and short-term, there is simply no better roadmap than the
Joe Russo
ELLIOTT WAVE TECHNOLOGY



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Tuesday, July 31, 2007Index Traders Edge Vol. 8

By Joseph Russo

ElliottWaveTechnology.com

7/27/2007

Highlighting the NASDAQ 100

Holding the Line

Interestingly, the NDX is one of the few broad-based equity indices to maintain its standing uptrend from the March lows.

Despite closing near its low for the week - with losses approaching 4%, the NDX survived the onset of this particular storm with little if any near-term technical damage. Much rides on the week ahead however.

Incidentally, the weekly rally from the March low turns 21 next week, marking prime time for a panic-low or manic buying-spree reaction high.

Buckle up!

How the rest of the majors held up…

After breaching 12-year lows beneath 80.14, and plummeting toward its 15-year historic low of 78.43 - The Dollar managed to summon much-needed defense at the 80.02 level - closing the week on an up-note while breaking marginally above a tight downward trendline of resistance.

The Dow failed to achieve expansion targets following its short-lived attempt in expanding its range. Soon after, the index re-entered the high-end of old price territory, and by weeks end - found itself a new home at the bottom of the range. In process, the Dows robust former uptrend failed. The index closed at the lower end of its weekly range, residing at key levels of near-term support. Per last weeks close, the Dow now shares a trajectory of ascent similar to that of the NDX.
Upon achieving it wedge breakout targets, Gold gave back most of those gains at the first clear signs of a Dollar bottom. The S&P failed miserably upon its marginal besting of former historic print highs. Upon reaching critical mass, the index tanked, suffering a near 5% bloodletting, while threatening to ruin an otherwise healthy level of trajectory.

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Tuesday, July 31, 2007Mitigating Collateral Damage

By Joseph Russo

ElliottWaveTechnology.com

7/30/2007

After numerous months of shaking and rattling, financial markets have finally begun to roll - over, that is - and notably to the downside of late.

Financial engineers the world over, are likely scrambling alongside the brotherhood of institutions, deliberating plausible methods by which to orchestrate transfer of unintended, and immeasurable risks across the global financial sphere.

Over the decades, our globally adopted financial paradigms have spawned a plethora of derivative, and structured-finance schemes that are severely lacking in both foresight and prudence.

Perhaps the largest and most cunning of financially engineered schemes is the marriage of faith-based fiat-currency with a highly complex global credit system. This couple is no doubt, a quintessential source of far-reaching worldwide malaise.

Rarely spoken of in effectual context, nor adequately disseminated to the masses by mainstream media, our structurally flawed financial system may one-day stifle a notable portion of civil societies it has managed to create.

Given many of the non-transparent underpinnings to our modern systems of credit, currency, and money creation, one would be naive to embrace the notion that the financial realm is somehow separate from the economic realm.

Financial Armageddon / Global Revolution

The Coming Stabilization / The Next Great Wave

All in good time, we suspect. We realize it is plausible that the early warning signs of such malaise may be nearing critical mass. In kind, it may be just as likely that we have another 5 or 55 years grace to develop more structurally sound, and sustainable systems.

Considering the magnitude of the many systemic shocks endured in the past, our current system – flawed as it may be, has held up well. Relative to past shocks, the latest bout of market volatility appears nothing more than a minor irritation thus far.

One must also be cognizant that a horrific event of epic proportion need not occur in order for an overstretched, unsustainable structure to slowly build and multiply numerous layers of non-transparent fractures, breach, then suddenly implode - void of a singular cause. Bear in mind, the straw that breaks the camels back need not be heavy.

As the world continues to turn, we proceed with our work in monitoring progress to one of the most fascinating and deceptive Bull Markets in the history of humankind.

We close this piece by sharing a small segment of sentiment and breadth charts that we feature regularly in our Near Term Outlook Publication.

Each issue of the 30-page Outlook is packed with a full compliment of market internals, which measure various levels of impending strength and weakness across various broad based markets. Some indicators such as the VIX and PUT/CALL ratio are contrarian while others like Bullish Percents measure breadth and anticipate imminent market direction.

Upon the close of the trading week, we found recent readings in our Bullish Percents array to be of notable interest. We trust the thumbnail charts will speak for themselves.

Speaking of deception, the chart below provides a rather interesting overlay comprised of the Put/Call ratio, The Dow priced in Gold, and The Dow priced in US dollars.


Put/Call Ratio w/Dow vs Gold


PUT/CALL Ratio: Based on CBOE statistics, the Put/Call Ratio equals the total number of puts divided by the total number of calls. When more puts are traded than calls, the ratio will exceed 1. As an indicator, the Put/Call Ratio measures market sentiment. When the ratio gets too low, it indicates that call volume is high relative to put volume and the market may be overly bullish or complacent. When the ratio gets too high, it indicates that put volume is high relative to call volume and the market may be overly bearish or in panic.

From peak optimism and complacency in March of 2000, the PUT/CALL ratio has been on a seven-year rising wave of pessimism. Interestingly, the ratio’s high pessimism reading in 2002 was spot-on, and in perfect confluence with the nominal bear-market low in the Dow. Thereafter, in otherwise peculiar fashion, pessimism continued to accelerate amid a rising upward channel as the NOMINAL Dow staged a roaring bull market advance. We suspect the reason for the lopsided bearishness and pessimism is a direct result of artificially low rates of interest in concert with a ballooning of easy credit, reckless liquidity creation, and bloating fiat money supplies.

DOW vs Gold Ratio: The price series in black plots the Dow Jones Industrials as measured against the value of Gold. It is upon observation of this ratio that many analysts conclude that a “silent” bear market in stocks persists. This ratio appears to have reached a bottom of primary degree in 2006. If correct, a rising primary B-wave advance in the ratio would explain the persistent nominal move higher in the Dow concurrent with the weakness in Gold. From the ratios 2006 low, the Dow has outperformed Gold. We have plotted the “nominal” Dow in Grey


Bullish Percents
The Bullish Percent Index (BPI) is a popular market breadth indicator that is calculated by dividing the number of stocks in a given group (an exchange, an industry, etc.) that are currently trading with Point and Figure buy signals, by the total number of stocks in that group. Bullish Percent levels that are above 70% are considered overbought, whereas levels below 30% are considered oversold. Strong buy signals occur when the Bullish Percent Index falls below 30% and then reverses up by at least 6%. Conversely, promising sell signals occur when it goes above 70%, and then reverses down by at least 6%. As an aside, any 6% reversal from a prior pivot extreme raises near-term prospects for ensuing strength or weakness contingent upon the direction of the reversal.


Unless the rapid decelerations in BP levels are telegraphing an extreme washout panic-low, sector wide sell-signals in both the S&P and NYSE composite indices do not bode well for the bullish case over the near-term.

The sudden 20% bearish reversal in the Dow BP’s is equally stunning. Of all the majors, the NDX escaped with least percentage reversal - though it threatens sector wide bearish confirmation upon a move below the 70 level.


Joe Russo
Publisher & Chief Market Analyst



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Thursday, July 26, 2007



The S&P Vibrating at Critical Mass
By Joseph Russo

ElliottWaveTechnology.com

7/20/2007

Nearly a year ago, back in September of 2006, we shared a keen and timely awareness as The Dow Approached Critical Mass. Save for the miserable comparative retracement performance from the tech-sector off the 2002 lows, numerous equity indices have since broken decisively to the upside above their previous historic highs. The S&P is one of the last to arrive.

The Mother of all Benchmarks is on the Hot-Seat
As we pen this market update, the S&P has yet to close above 1553.11. Perhaps it will do so by today – perhaps not.

We suspect the recent surge in out-performance by the NASDAQ (leadership?) might simply be a matter of funds chasing after the most undervalued laggards relative to the levels of advance achieved in most other major indices.

For longer-term investors, position traders, and the most astute Elliott Wave connoisseurs, we have laid out specific forecasts and price targets for the Intermediate, Primary, Cycle, Super-Cycle, and GRAND SUPER CYCLE Degrees of trend in force from 1696!

Yes, we have acquired and exhaustively analyzed data spliced to the Dow from the British All-Shares Index 1693-1853. Thereafter, we spliced the Clement Burgess Index from 1854-1895! From 1896 forward, we follow the Dow Jones Industrials in its present form.

To our knowledge, no charting service presents a more robust, organized, and accurate historical accounting of the wave structures at the largest degree of trend than Elliott Wave Technology. With proven mastery over such large-scale time horizons, it stands to reason that we are equally adept at calling the short-moves in the market with similar levels of skill, patience, and accuracy.

For active index traders, we continue to identify and capture - with near-perfection - virtually all of the swings, trade-triggers, and short-term price targets in our Near Term Outlook publication.

To get a grip (and keep it) on where the major markets are heading in both the long and short-term, there is simply no better venue than Elliott Wave Technology.

That said – let’s take a look at where the weekly charts are trading…






The Dollar is at its own level of critical mass, which vibrates about the 80.39-80.14 levels. Should these levels soon become “price-ceilings,” hold on to your hats! The Dow has broken out of its recent range with a “summer-rally” resolution following the well telegraphed, “June Swoon.” Who knew?



As we anticipated, Gold broke to the upside side quite nicely from a nest of falling wedges, and is now approaching a key eight-week resistance level just under 680. Like the Dow, the S&P has also broken to the upside, now vibrating at its critical- mass closing resistance of 1553.11.
Until next time …
Trade Better / Invest Smarter…
Joseph Russo
Publisher & Chief Market Analyst
ELLIOTT WAVE TECHNOLOGY
http://www.elliottwavetechnology.com/
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I, MATADOR... AND THE TAMING OF THE BULL
by Joseph Russo
ElliottWaveTechnology.com
February 8, 2006
Financial markets have long been a venue of intrigue, perversity, excess, and mysticism of sorts. As such, many of the baffling conundrums through out financial market history have led to many catch phrases. One such phrase is that "The Market is Always Right."

It Takes Two Baby...
It is our contrary stance that markets are always wrong. The value of anything is simply the current price to which the last two parties agree, at a specific moment in time.
This rather emotionally charged mechanism is all that is required to set a plethora of market prices on a daily basis. Opportunities arise when at any time, participants involved in the discovery process have false incentive, are incited by fear, greed, or ignorance toward a compulsion to agree on price levels further and further away from the most basic tenets of reason relative to the time period at which the price discovery is taking place.
Such opportunities present themselves intra-day, while larger imbalances are recognized months, or even years after excessive maladjustments. The level at which a given market is quoted vs where it "should be" fundamentally, technically, or otherwise are rarely one in the same.

Caught In the Crossfire...
Price discovery exists in a perpetually dynamic state of flux. Thus is our argument that the current market price is always wrong at its inherent common denominator. That said, it becomes a foregone conclusion that at any moment in time, half of all adversarial market participants (traders) are dead wrong.
Many participants jump back and forth to the various sides of price discovery in an effort to join with those in the "right" for the moment. Some may be reducing size and taking profits, while others are attempting to gain initial entry, while yet others may be getting out for good.

Come As You Are...
Investing or Trading "Nirvana" may be defined as getting "long" or "short", on the right side of a market either early on, or in the middle or final phase of a super extended long-term directional mega-trending market. In this case, "The Trend is Your Friend."
We should add to this particular catch phrase that yes, "The Trend is Your Friend," (contingent upon where and when you get in and out of it, and shall remain friendly until such time as it ultimately terminates its existing larger degree cycle.)

Sweet Emotion...
The price discovery process being one of great emotion is fraught with frailty and temperament, subject to change on a moments notice, and then change back again. Where are these larger degree terminals? Where does it all end? In short, it never ends!

Safe-Haven...
Safe-Haven authors, whom we greatly support and admire, are rather generous in sharing with us, pending fundamental and technical arguments relative to present and future price discovery imbalances that we all should remain cognizant of and highly regard.

Looking for Clues...
Many such arguments presented have immediate and direct impact, while others go ignored only to become quite relevant many months hence. In the interim, astute investors, institutions, and traders alike are searching for answers to back their short-term positions and long-term portfolios.

And the Answer Is...
May we boldly suggest that most all of the immediate and long-term answers lie simply in the proper interpretation of the footprints left behind by the collective culmination of pairs, telegraphing motive and intent via price patterns graphically expressed on a simple bar chart.

Can You See What I See?
What then is the best way to perceive this fragile process of ongoing emotional price discovery? Is there a discipline or group of methods by which we can accurately discern what the discovery process is inferring? Is there some high tech algorithm, inter-market interface program that can tell us when to go long, short, stand aside, or hold various sectors and indices? Perhaps there is, but we suspect it is a bit simpler than that.


Hold On Loosely, But Don't Let Go......
After more than 15 years of trading, investing, and intense study of financial markets, it is our firm opinion that good old fashion chart analysis with proper application of Fibonacci Ratios, Trend Lines, and Elliott Wave Theory is just about all one needs to navigate the markets safely, and with the highest levels of confidence.
As many have in the past, and as many more will do so in the future, shall come to find out the hard way that this seemingly common sense approach is without doubt, quite a lot easier said than done. There remains one small and elusive aspect of executive application that gets smack in the way for the majority of participants. That small but poisonous fly in the ointment would be that of sweet emotion.

It still takes two baby....
So what is the solution? We are of the firm belief that the solution rests upon the distinct separation of analysis and execution. In our opinion and real-time experience, incorporating such a strategy yields far superior performance.
I Can See Clearly Now...
Over the years, similar to the two party price discovery system, we have found the best approach to assertively navigating markets successfully also requires two parties. We have metaphorically morphed and characterized the navigational process of these two parties to that of a "Matador" as he masterfully orchestrates the "Taming of the Bull."
We emphasize, "Taming the Bull" simply because at the very largest degree of trend, equity markets are inherently bullish. They unfold on an upward path of progress with intermittent episodes of pause and regress. Some such episodes are brief and painless, while others may be prolonged, frustrating, and costly.
"I, Matador"
We have coined this engineered dual state of control, "I, Matador."
The notion of "I, Matador" embraces the concept of two distinct operational arms. The "navigation" arm and the "tactical" arm. However, unlike the two adversarial parties agreeing upon and setting price in the course of discovery, the two arms of the Matador act in tandem, sharing the same objectives, while focusing their respective concentrations distinctly apart from one another.

Hungry Minds Are Never Fed...
Matadors as we have described them, do not prognosticate, hold onto, or ballyhoo grand predictions. Nor do they aspire toward Guru Status. It is strictly the successful execution, and ongoing process relative to the immediate business at hand, that may then only temporarily satiate the incessantly starving mind of a Matador.

I'm Your Captain...
The navigation arm continually monitors and accurately plots the safest most reliable course, otherwise known as the dynamic market forecast. The "navigators" nourish the tactical arm with regularly updated road maps inclusive of destination targets, detours, short cuts, risks, and potential hazard zones. The navigation arm is NOT emotionally concerned with open profit, or loss as they are entirely removed from the highly charged adversarial discovery process itself. The singular focus of the navigation arm is continuous identification and anticipation of dynamic directional movement across varying degrees of trend. Its prime directive is feeding this vital information to the tactical arm, which then deploys it to engage in the adversarial discovery process.

Ride Captain Ride...
The "tactical" arm is the second part of the duo, which extracts the key directional information provided by the navigation arm. The tactical arm assimilates the information to suit their varied objectives, and with calm assertion, applies it to their advantage upon taking part in the otherwise emotionally charged price discovery process.
It is up to each tactical team to fully develop and strictly adhere to a diligently managed risk strategy based upon adequate resources and realistic objectives. The singular tactical focus is to act prudently, with an assertive calm discipline strategically engineered to execute pre-planned assaults based upon the directional coordinates received from the navigation arm.

Go On; Take the Money and Run...
The tactical arms sole purpose is to book profit, and manage risk exposure relative to the time frame and risk at which each team is geared to travel.

One is a Lonely Number...
Together the two arms become one, morphing into "I, Matador. Neither bullish nor bearish, their combined stature is that of the most brilliant Matador, masterfully orchestrating his will over the most dangerous adversarial terrain. As "Brothers in Arms," they assert their skill with deadly force in the face of an opponent far more powerful than they as one.

© 2006 Joseph Russo
Editorial Archive

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GLOBAL CONTAGION
by Joseph Russo
ElliottWaveTechnology.com
April 16, 2006
“A highly deceptive global contagion of the bullish kind appears well underway”
FUNDAMENTAL CONSIDERATIONS
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.
BELIEVE NOTHING THAT YOU HEAR, AND ONLY HALF OF WHAT YOU SEE
We highly recommend the reading of two rather illuminating editorials that have inspired this piece, and may serve to bolster its technical summary.
Dr. Marc Farber who eloquently explains the continued manifestations regarding nominally perceived vs alternative value benchmarks authors the first, and the second is from Cliff Droke, who brilliantly aligns the forces of powerful economic cycles with the fundamental challenges facing the controllers of America’s financial destiny.
Cliff Droke: Global Economic Order "How Much Closer Are We to Geo?
Marc Farber: "Anatomy of Bear Markets"
TECHNICAL ANALYSIS
All of the charts presented are in nominal terms using classic tenets of Elliott Wave Theory. The analysis reflects both the nature and maturity of wave structures as interpreted by the author.
Our technical contribution and comprehensive subscription service is designed to assist traders, investors, and portfolio managers in navigating many of the unique technical conditions surrounding current market patterns around the globe.
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.
Just how far along they are in development remains somewhat elusive. In some markets, the extensions appear ripe for termination at any moment, while others display clear evidence of more room to run.
Monitoring the unfolding of such extensions is quite challenging due to the perplexity and multitude of sub-divisions required to complete the sequence.
As always, the larger periods are dominant, and what may count out as a satisfactory sequence of completion on a daily chart may well end up disappearing into the larger time frames subsuming rendition of the pattern in force.
The probable cause of its development may reside under the auspices and repetition of exponentially larger and larger injections of global liquidity at numerous junctures of crisis spanning 10-20 years or more.
Below is an idealized extended Intermediate Degree (5) terminal:

The following pattern example is a more realistic representation of how an extended (5) of Intermediate Degree may unfold in real time:

Now it is time to explore some of the recent Global Contagion in real time.
AUSTRALIA

A Glimpse of the Top from Down Under

Since the 2004 wave (4) print low in 2003, the ASX has gracefully ascended with fewer and fewer pullbacks in five waves of Minor Degree; marching straight toward the top of its trend channel.
BRAZIL

Perpetual Carnival since late 2002

Of interest regarding the Bovespa, is the prospect for the currently topping Intermediate (5) to be terminating only that of Primary “3”.
INDIA

Forever Rising in the East

India continues to display a relentless advance- virtually absent of any meaningful corrections since 2005. The fifth wave extending in the BSE appears to be one of Minor Degree. The completion of Minor x5 will mark an extended Intermediate (3) terminal. Note the smaller narrow trend channels drawn from the 2005 lows. Price has climbed near the top of this trend channel and has already begun to descend.
MEXICO

That GIANT SUCKING SOUND seems to have bred one heck of a Bull Market for Mexico

After kicking and clawing its way through Intermediate (4) and Minor 4, the Bolsa has done nothing but ascend in stellar fashion since the 2002 low marking Minute ‘2’. Of immediate concern are the two divergences occurring against the ’06 all time highs in both the RSI and ROC. Note the two key power up trend lines in light gray and blue. Should they both hold- the top of the trend channel remains very much in play.
RUSSIA

RED BULL …. A bull like no other!

We will let the chart of the RTSI speak for itself.

© 2006 Joseph Russo
Editorial Archive

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GLOBAL CONTAGION II
by Joseph Russo
ElliottWaveTechnology.com
May 22, 2006“Is the bullish contagion nearing its end, or just pausing to refresh?”

The following is a chart pattern update from our previous 4/16 post…

TECHNICAL PATTERN REVIEW:

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.

Monitoring the unfolding of such extensions is quite challenging due to the perplexity and multitude of sub-divisions required to complete the sequence. As always, the larger periods are dominant, and what may count out as a satisfactory sequence of completion on a daily chart may well end up disappearing into the larger time frames subsuming rendition of the pattern in force.

The probable cause of their development may reside under the auspices and repetition of exponentially larger and larger injections of global liquidity at numerous junctures of crisis spanning 10-20 years or more.

Below is an idealized “extended” Intermediate Degree (5) terminal:



The pattern below exemplifies a more realistic representation of how an extended (5) of Intermediate Degree or higher might unfold in real time:



Now it is time to explore a progress update of the Global Contagion in real time.

Chart comparisons are expressed in weekly vs. monthly periods to highlight declines off the recent highs.

AUSTRALIA

THAT WAS THEN… 4/12/2006
A Glimpse of the Top from Down Under



Since the 2004 wave (4) print low in 2003, the ASX has gracefully ascended with fewer and fewer pullbacks in five waves of Minor Degree; marching straight toward the top of its trend channel.

THIS IS NOW… 5/19/2006



The previous 4/12 analysis had a chart high of 5197. Since then, the ASX pulled back briefly,
then launched what appears to be a final assault into a long-standing price capture window.
From peak to trough, the market is down just under 6%. EWT’s first downside target is just
above 4800. Just another pause similar to the October decline of ’05? Time will tell. The chart
high for 5/19 is 5352.10; just 47.29 points shy from the mid-range of our optimal distribution
window that appeared back in April.

BRAZIL

THAT WAS THEN… 4/12/2006

Perpetual Carnival since late 2002


Of interest regarding the Bovespa, is the prospect for the currently topping Intermediate (5) to be terminating only that of Primary “3”.

THIS IS NOW… 5/19/2006

INDIA

THAT WAS THEN …. 4/12/2006
FOREVER RISING IN THE EAST


India continues to display a relentless advance- virtually absent of any meaningful corrections since 2005. The fifth wave extending in the BSE appears to be one of Minor Degree. The completion of Minor x5 will mark an extended Intermediate (3) terminal. Note the smaller narrow trend channels drawn from the 2005 lows. Price has climbed near the top of this trend channel and has already begun to descend.

THIS IS NOW… 5/19/2006


What appeared to be a potential top at 11,930 back in the April 12 analysis, turned out to be
another fourth wave bottom. Our projected price target window was 12,300 – 14, 789.
The 5/19 weekly update shows our previous target window has been entered. Since the current
chart high of 12677.11 the BSE has fallen over 13%. Is this just another pause, or perhaps a larger degree trend change?

MEXICO

THAT WAS THEN… 4/12/2006
That GIANT SUCKING SOUND seems to have bred one heck of a Bull Market for Mexico


After kicking and clawing its way through Intermediate (4) and Minor 4, the Bolsa has done nothing but ascend in stellar fashion since the 2002 low marking Minute ‘2’. Of immediate concern are the two divergences occurring against the ’06 all time highs in both the RSI and ROC. Note the two key power up trend lines in light gray and blue. Should they both hold- the top of the trend channel remains very much in play.

THIS IS NOW… 5/19/2006

On 4/12, the Bolsa was struggling to maintain the 20k level. It has since chopped higher
to a print high of 21,917 only to sink back to close 5/19 just above 20K. The tightest of
up trend lines continues to hold for now.

RUSSIA
THAT WAS THEN… 4/12/2006

RED BULL …. A bull like no other!


THIS IS NOW… 5/19/2006


The Chart high for the RTSI is 1795.00, just 42.59 points above our projected high on April 12.
All the classic criteria have been met for a terminal of major degree. Trend channels objectives have been achieved, price targets have been achieved, and all of the required sub-divisions can be accounted for. All that remains is a retest or marginal new high after a test of the 1400 level. Should this play out, this chart will go straight into the textbooks. So far, the RTSI has fallen about 19% from its recent highs.

© 2006 Joseph Russo
Editorial Archive