13 replies to this topic

[Douglas]

4caster & Chilidawgz, this market is like the dot com bubble on steroids.  Fiscal and monetary stimulus to the tune of trillions of dollars has juiced the economy avoiding a recession and flooded the stock market with buying power.  I am convinced that "the piper will be paid" when the Fed is forced to react when inflation rises like a phoenix from the ashes due to all the excess funny money still sloshing around in the system.  To date I believe the Chinese economic train wreck has been holding back this inflation resurrection by pressuring crude oil and other commodity prices, but this is only postponing the day of reckoning.  

 

The recent divergence of the NYSE AD line that I show in the note above could be pointing to a turn in the not too distant future like it did in 2007 as shown below.

 

 

Regards,

Douglas

[fib_1618]

The bottom line for any technically related market analyst to understand is that breadth of market (or even that of a single issue or sector) leads price, or to put it another way, the value (supply) of any product is solely dependent on the demand of what's being sold that determines its cost. So when it comes to something like Elliott Wave labeling, for example, third waves are ALWAYS accompanied (and led) by the very best in both breadth and volume. Therefore, if price is making higher highs, but its underlying breadth/volume components are not, then the price structure can not be labeled as a third wave. Period. A broader sub component of this idea is that the pricing of growth issues (those that are considered undeserving when it comes to investment capital since their perceived valuation are exclusively dependent on the cost of the debt load that they carry for their research and/or development) will lead higher (or lower) compared to those that are considered issues of value (companies that already have a solid domestic or multinational business model of which may also include providing dividends while you wait for future longer term valuations to be realized). Right now, we have mixed market conditions in which both bulls and bears can make a case as being important in determining the future direction of stock market prices (which is very different than that of the decade of the 2010's).

 

All that said, the following link will take you to my Elliott Wave primer of the usual psychological, technical and fundamental characteristics of each wave structure which can help providing guidance in labeling, and from which, all you then have to do is to determine the degree of trend and its longer term importance and/or implications: https://tinyurl.com/2y3de6ud

 

Fib

[4caster]

I don't pay any attention to the e-wave stuff but I am into Correlation & Regression analysis. So far this year

Amazon, Meta, Microsoft and Nvidia have accounted for 75% of the move up in the mkt. So wouldn't it be

logical to assume that e-wave counts here are not reliable because those 4 stocks are skewing the data or

am I missing something here?

[fib_1618]

I don't pay any attention to the e-wave stuff but I am into Correlation & Regression analysis. So far this year

Amazon, Meta, Microsoft and Nvidia have accounted for 75% of the move up in the mkt. So wouldn't it be

logical to assume that e-wave counts here are not reliable because those 4 stocks are skewing the data or

am I missing something here?

The concept of Elliott Wave is that every single structural price sequence can be labeled as a means of knowing (and sharing) where we are, longer term, at any given point in time. So, yes, Elliott Wave counts are very reliable as long you unemotionally following the guidelines as provided by such primers as the one I linked within this thread.

 

Fib