Perfect Wave - 2012-1/2

Here is my portfolio as of today's close:

Long Term - Big troop dolloar amount allocation: TLT 50% cash 50% (no change)
Medium Term - Small troop stock holding: EDZ, FAZ, TZA (no change)

The market closed near day low again today. This is a very bearish price action where the market sucked and trapped more bulls in the moring before the decisive moving down in the afternoon. If the current preferred wave count is correct, we are in 3._3._3 wave underway. If the wave fractal reproduces itself of the wave-1, we will be seeing a big gap down and with a killing collapse very soon. Remember that this bear run is far from over! DO NOT buy any dips! All posts will be synch-ed to my blog.
 
Let me tell you my friends, the most dangerous bear market formation is a long winding slow motion one! The money flows outward from equity (slowly) into some other markets (e.g., bonds). Every time the stock market falls to a support (temporarily), it attracts some little bulls to buy, and the market gets rebound, but the market falls below the support area few days after and traps more people. In conclusion, DO NOT buy into any dip! Any surge is your opportunity to unload your stock and go short. The bear market has just started and is far from over.

20120512+SP+-+Daily.png
 
Quote from snowrider:

Let me tell you my friends, the most dangerous bear market formation is a long winding slow motion one! The money flows outward from equity (slowly) into some other markets (e.g., bonds). The bear market has just started and is far from over.
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Yes, it does seem the S&P is heading for flatline of 1,257 for the year.

However, would you change your analysis of the pending bear market if the S&P held above 1,293 Wave [1] top and reversed back up?

In other words, at what point does the "ABC" correction of Wave [IV] convert into a Wave 3 collapse?
 
Quote from ScalperJoe:

Yes, it does seem the S&P is heading for flatline of 1,257 for the year.

However, would you change your analysis of the pending bear market if the S&P held above 1,293 Wave [1] top and reversed back up?

In other words, at what point does the "ABC" correction of Wave [IV] convert into a Wave 3 collapse?
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ScalperJoe - Thanks for the feedback. It could be heading to 1257 because of current downward momentum. About the question whether 1293 will hold, I would bet that it could be breached tomorrow (Friday) morning right at openning. Why do I make this speculation? Because of today's solid long black candle with high volume. If we don't have a strong intervention or super good news tomorrow, the wave count should be staying the same direction. About the question when the "ABC" scenario should be voided, I would still say that the high of 10/27/2011 (i.e., 1292.66) is the key observation point. BTW, I will synch this conversation to my blog. Thanks.
 
Quote from Wide Tailz:

If we don't rebound here, the picture will start to get scary.
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Stock Indexes are trying to make a higher low.

When they do the next oscillation is a lower high, and if the market breaks the eventual lows of this higher low, that will be the start of a new bear trend. If we set another higher low after the next lower high oscillation, that will be a net positive, but I fear this may be the start of a bear market with one last rally before dropping below the new lows.
 
Quote from Wide Tailz:

If we don't rebound here, the picture will start to get scary.
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Agreed. Here are some points to consider:

1. Wave top of 1,293 was breached intraday, but Friday's SPX close was at 1,295.

2. The SPX is nearing its 38.2% fib retracement from the October 2011 lows.

Next week's price action will most likely paint the picture of whether or not the SPX can hold above the close of October 2011 lows and the fib level.

Obviously the hype of Facebook's IPO didn't help the tech sector. And Uncle Ben is nowhere to be found, for now.
 
Where is the backtest of this nonsense?

Elliot Wave is bunk, because there is no strategy defined by it, making it subjective and unsystematic.

EW is not a strategy until there's a simulation of it.
 
Quote from bwolinsky:

Where is the backtest of this nonsense?

Elliot Wave is bunk, because there is no strategy defined by it, making it subjective and unsystematic.

EW is not a strategy until there's a simulation of it.
More...

Paul Tudor Jones likes it.
I think EW theory has some validity.
Some other people call it the Idiot Wave Theory because it resembles so much of a Rorschach Test.
 
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