Btw my utmost bearish scenario

Its similar to Insider's.. the structure looks much more clean on NDX than anything else.. Says we are on 5 down.. and the last rally was a 4. And thursday was the 2 up of the 5 down, and friday was the start of 3 down of the 5.. The ultimate projection of this decline would put it somewhere around Qs 40. Here's the key dates (without showing a chart, but should be pretty obvious).. that I want to mention. 4/7/08 is the 38% retrace of the top in 10/31 to bottom on 3/17. 3/17 would be the end of the 3. Note that 3 would start on 12/11, and 3 of that 3 ended on 1/23, and 4 of that 3 ended on 2/1, which is another perfect 38% retrace. So its almost perfect text book elliott, which implies this leg is the 5th down of 5 waves down, the last rally we saw being a 4 up in a-b-c structure from the bottom. This is far more bearish than my current preferred downside projection. But IF it is a 5, the real 5 that is, not the 5s everyone's been calling for a while.. then this will hit some ungodly sentiment extremes. I may post a chart later. But should be clear for anyone doing EW work.

Dcenger,

We differ on the counts slightly but the end result is the same....we both believe we are in wave 5 down. However I believe you are thinking too small. Thursday was wave 2 of wave 1 (Of larger 5). Agree it has been classic elliot with the alternation rule and the extended third wave, retracements to important fib levels, etc. Since the third wave was the extended wave we can expect Wave 5 to either be equal to Wave 1 or some fib relationship of wave 1. Wave 5 = Wave 1 at 1216/1226 depending if you take it off the A or C wave of 4. Also Wave 5 = 1.382 Wave 1 at 1151/1161 which is exactly what insider is looking for and. I prefer the second posibility as its near the 50% retrace of the 02-07 Advance as well as the 04 highs....so you have a confluence of fibs at support. Its something to keep an eye one...

http://stockcharts.com/c-sc/sc?s=$SPX&p=W&yr=8&mn=3&dy=10&i=p75754272808&a=135962264&r=3072.png

Its similar to Insider's.. the structure looks much more clean on NDX than anything else..

Says we are on 5 down.. and the last rally was a 4. And thursday was the 2 up of the 5 down, and friday was the start of 3 down of the 5..

The ultimate projection of this decline would put it somewhere around Qs 40.

Here's the key dates (without showing a chart, but should be pretty obvious).. that I want to mention.

4/7/08 is the 38% retrace of the top in 10/31 to bottom on 3/17. 3/17 would be the end of the 3.

Note that 3 would start on 12/11, and 3 of that 3 ended on 1/23, and 4 of that 3 ended on 2/1, which is another perfect 38% retrace.

So its almost perfect text book elliott, which implies this leg is the 5th down of 5 waves down, the last rally we saw being a 4 up in a-b-c structure from the bottom.

This is far more bearish than my current preferred downside projection. But IF it is a 5, the real 5 that is, not the 5s everyone's been calling for a while.. then this will hit some ungodly sentiment extremes.

I may post a chart later. But should be clear for anyone doing EW work.

?

i agree 100% with your prognosis...here is my question to we fill the gaps on Friday first before breaking the january/ march lows?

Edited by iron cross, 12 April 2008 - 06:09 PM.

Very nice analysis, it is good to see the trend has been noted with come care. We have a ways down to go, then maybe some kind of counter trend rally- later, that is not the end of the variation on the theme 12000 +/- Dow. it is just a wave in the longer game: it is a traders game ONLY. Best, Islander.

Edited by Islander, 12 April 2008 - 08:43 PM.

I may post a chart later. But should be clear for anyone doing EW work.

Could the wave-2 of wave-5 be next instead? So, far this setup is quite similar to the January rally with the Fed pump and subsequent sell off on early Feb ahead of its consolidation in Feb, rather than the sell off at the end of Feb. Bearing weakness on Monday and Tuesday, I actually think the sell off will resume after the expirations, but I do not expect a much higher close from Friday. Although not like the March low, the market suggests roughly a 1.5-2% retracement, especially if we see some mild weakness (no strong follow through) on Monday...

$-worth of the equity calls and puts (ETFs included);

%-change e-calls e-puts
-5 1.98 8.07
-4 2.20 7.30
-3 2.44 6.59
-2 2.72 5.94
-1 3.04 5.37
0 3.40 4.87
1 3.81 4.44
2 4.27 4.06
3 4.78 3.73
4 5.36 3.46
5 6.01 3.23

Anything is possible.. the trick is not marrying anything yet still find ways to make money.

According to the expirations, the hedging will start to pay considerable premium below 1% in the senior indices, I think if it goes 1% below the Friday's close, the bearish speculation will continue to increase, although I am not very happy the way the bottom picking went on Friday around noon. Then there was some index options based bottom picking right around the last hour...

30 min nominal P/C ratios from Fri;

time eqt-calls eqt-puts eqt-pcratio idx-calls idx-puts idx-pcratio tot-calls tot-puts tot-pcratio
9:00 AM 203600 188681 0.926724 126193 214194 1.697352 329793 402875 1.221600
9:30 AM 122418 119506 0.976213 97789 167802 1.715960 220207 287308 1.304718
10:00 AM 85198 70510 0.827602 50146 131494 2.622223 135344 202004 1.492523
10:30 AM 78260 55898 0.714260 41792 116635 2.790845 120052 172533 1.437152
11:00 AM 71988 53068 0.737178 18755 52490 2.798720 90743 105697 1.164795
11:30 AM 89640 58537 0.653023 27649 65826 2.380773 117289 124224 1.059127
12:00 PM 68138 52057 0.763994 42463 55760 1.313143 110601 107817 0.974828
12:30 PM 36331 43200 1.189067 18859 48894 2.592608 55190 92094 1.668672
1:00 PM 74262 75130 1.011688 33593 86343 2.570268 107855 161473 1.497130
1:30 PM 67052 67686 1.009455 46209 97593 2.111991 113261 165279 1.459275
2:00 PM 63007 61812 0.981034 72815 90693 1.245526 135822 152505 1.122830
2:30 PM 73297 69600 0.949561 48946 74228 1.516528 122243 143828 1.176575
3:00 PM 128840 123513 0.958654 93042 197392 2.121537 141882 320905 2.261774

There is some fear but not much in theocc data either...

Edited by arbman, 13 April 2008 - 12:43 AM.

I just went through the occ data.. its not bullish. Funny thing tho.. stockcharts.com was reporting CPCE a lot higher than actual CBOE data. When I first saw it, I couldn't believe it. So I went to cboe website to confirm, and sure enough, stockcharts.com was wrong. From what I gathered on the action friday, there was buying the dip mentality, low fear. Probably means some more downside for the next few days.

Here are the moving averages of the 3 dominant harmonics. Their slopes were constantly improving for sometime now.

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=0&dy=0&i=p50273029163&r=9160&.png

If the market is not crashing, the oscillators associated with these harmonics suggest one more rally of 30-40 points to come very shortly from here and 5 points downside in the next 1-2 sessions. It could even suggest inverted head and shoulders pattern. If the market is indeed crashing, then the ranges will expand rather quickly...

Here ROCs and oscillators of the 3 harmonics... There is a smaller harmonics of 8-9 days and it is also getting quite dominant, but it is slightly out of synch right now. It could be because of 2 other dominant cycles that I am seeing (22-23wk, 90-94wks). The 22-23 wk cycle since January is near its peak, but less and less dominant now...