Technical Analysis of the Financials Markets, Swing Trading Speculation

## Wednesday, November 30, 2011

## Tuesday, November 29, 2011

### Follow Up 29-11-11

I have not changed my bearish stance, however when ¾ of your unrealized puts profits disappear in a single trading day you kind of wonder.

11630 should hold as resistance for the down move to continue, definitively 11000 is my first target, based on the broken channel, also there is some intermediate significance at 11000

Some long resistance at 11230, 10530 would be a target if 11000 broken.

Let's see today action

Good day,

## Thursday, November 24, 2011

### Here´s another thought

Thanks to http://danericselliottwaves.blogspot.com/ for getting my attention to this perfectly parallel downward channel. The failure of the prices to reach the top of the channel is certainly an indication of a future break of the lower line. This is a 2000 point channel, if the lower line is broken the level minus 2000 is a new low target.

For the immediate future I am trying to project some consolidation area near the down line of the channel.

My first choice is a big flat with B wave stopping at the B1 10655 level fulfilling the great December-January almost etched rally.

My second projection is that BIG 2 ended definitively at 12231 on October 28, BIG 1 developed in 51 trading days and BIG 2 ending on October 28 had 19 trading days, 19/51 = 0.373, the nearest exact days relationship to 0.382.

With the channel measuring technique we'll put the end of 3 of 1 of BIG3 at 11000, then a 4 will stop around 11230 and 5 will be 573 points long same as 1 ending around 10655. With this scenario then we will have 2 of 1 of 3 running on December giving us some year end mini rally.

Anyway these are just possible scenarios, lets wait for the real development.

For the immediate future I am trying to project some consolidation area near the down line of the channel.

My first choice is a big flat with B wave stopping at the B1 10655 level fulfilling the great December-January almost etched rally.

My second projection is that BIG 2 ended definitively at 12231 on October 28, BIG 1 developed in 51 trading days and BIG 2 ending on October 28 had 19 trading days, 19/51 = 0.373, the nearest exact days relationship to 0.382.

With the channel measuring technique we'll put the end of 3 of 1 of BIG3 at 11000, then a 4 will stop around 11230 and 5 will be 573 points long same as 1 ending around 10655. With this scenario then we will have 2 of 1 of 3 running on December giving us some year end mini rally.

Anyway these are just possible scenarios, lets wait for the real development.

## Monday, November 21, 2011

## Thursday, November 17, 2011

## Wednesday, November 16, 2011

## Tuesday, November 15, 2011

## Sunday, November 13, 2011

### Triangle, Flat, Zigzag or What

I confess that I´m obsessed with the ratio analysis between waves and the purported fractal configuration of the market and waves; being that, let’s review the relationship.

Proposed Wave (a) could easily be 2 since 1576 points (12231-10655) is a 76% of 2069 (12724 – 10655), however now it doesn´t look that way, in the triangle A is 574 points, B is 513, C is 389, D is 373 and E could be 240 to end around 11900. That way we´ll have E/C= 0.618, C/A= 0.678, so if this is a (b) triangle it must certainly stop above the lower line with a possibility of an intraday undershoot. Citing Prechter , ¨ triangles always occurs in a position prior to the final actionary wave in the pattern of one larger degree¨, the (b) triangle wave of 2 fits that description perfectly.

Wave a of (a) is 989, 9.3% from 10655 to 11644 in 11 days, wave b is 247 or 25% of a, c of (a) is 834 or 7.3% in 11 days, we have a perfect time relationship between a and c of (a).

Now, if (b) is in fact a triangle ending around 11900, (c) must have some relationship with (a), .618 of (a) is 973 would carry (c) to 12873 right above our purposed 0, .382 of (a) is 602 ending (c) around 12500, I am not sure of the triangle now thinking about maybe a double tree.

12400 is the level for Wave 2 retracing 85% of 1, in that view I cannot see the markets going up much next week.

Proposed Wave (a) could easily be 2 since 1576 points (12231-10655) is a 76% of 2069 (12724 – 10655), however now it doesn´t look that way, in the triangle A is 574 points, B is 513, C is 389, D is 373 and E could be 240 to end around 11900. That way we´ll have E/C= 0.618, C/A= 0.678, so if this is a (b) triangle it must certainly stop above the lower line with a possibility of an intraday undershoot. Citing Prechter , ¨ triangles always occurs in a position prior to the final actionary wave in the pattern of one larger degree¨, the (b) triangle wave of 2 fits that description perfectly.

Wave a of (a) is 989, 9.3% from 10655 to 11644 in 11 days, wave b is 247 or 25% of a, c of (a) is 834 or 7.3% in 11 days, we have a perfect time relationship between a and c of (a).

Now, if (b) is in fact a triangle ending around 11900, (c) must have some relationship with (a), .618 of (a) is 973 would carry (c) to 12873 right above our purposed 0, .382 of (a) is 602 ending (c) around 12500, I am not sure of the triangle now thinking about maybe a double tree.

12400 is the level for Wave 2 retracing 85% of 1, in that view I cannot see the markets going up much next week.

## Sunday, November 6, 2011

### Complicated, yet Simple

Here´s a thought from the forest to the trees

The big zigzag started after the Dow topped at 14,093 on the October 8 2007 week, the A wave ended at 6626.94 for a 7466 points or 53% decline from the top.

Big B ended at 12681 for a total of 6055 points, retracing 81% of A, now, B was a 3 a-b-c movement that developed like this:

a, 6626 – 11204 = 4578 points

b, 11204 – 9686 = 1518 points, 33% of a

c, ended at B, 9686 – 12681 = 2995 points, 65% of a, cool

Let´s go to the trees

We have the ¨exact¨ end of B on July 21 at 12,724.41, then 1 ran 2069 points to 10,655.30 on October 3, the return move took the Dow to 12,231.11 on Oct 28 for 1576 points or a 76% of wave 1.

What is next?

a) 12231 was the end of 2, the market will drop to the vicinity of 10,200 or below but then, what will happen with the almost infallible Santa Claus rally on December?

b) Wave 2 hasn´t ended yet, and we are in the b part of an a-b-c wave 2. If that´s the case the following will happen. Wave b of 2 will go down to one of this levels:

11,632 with c stopping at 12,600 max, right below the upper resistance line

11,443 with c stopping at 12,400 at the internal trend line

11,000 with c around 12600 maximum

With a Fridays’ close at 11983, we have a minimum 3% drop for the following days.

Beware of the BIG formation; it can take the Dow to a hopefully truncated C around 8000.

The big zigzag started after the Dow topped at 14,093 on the October 8 2007 week, the A wave ended at 6626.94 for a 7466 points or 53% decline from the top.

Big B ended at 12681 for a total of 6055 points, retracing 81% of A, now, B was a 3 a-b-c movement that developed like this:

a, 6626 – 11204 = 4578 points

b, 11204 – 9686 = 1518 points, 33% of a

c, ended at B, 9686 – 12681 = 2995 points, 65% of a, cool

Let´s go to the trees

We have the ¨exact¨ end of B on July 21 at 12,724.41, then 1 ran 2069 points to 10,655.30 on October 3, the return move took the Dow to 12,231.11 on Oct 28 for 1576 points or a 76% of wave 1.

What is next?

a) 12231 was the end of 2, the market will drop to the vicinity of 10,200 or below but then, what will happen with the almost infallible Santa Claus rally on December?

b) Wave 2 hasn´t ended yet, and we are in the b part of an a-b-c wave 2. If that´s the case the following will happen. Wave b of 2 will go down to one of this levels:

11,632 with c stopping at 12,600 max, right below the upper resistance line

11,443 with c stopping at 12,400 at the internal trend line

11,000 with c around 12600 maximum

With a Fridays’ close at 11983, we have a minimum 3% drop for the following days.

Beware of the BIG formation; it can take the Dow to a hopefully truncated C around 8000.

## Tuesday, November 1, 2011

### End of the road....?

It looks like 12200 was the top of this move that started around 10655 for a 14.5% gain in 18 trading days, you knew that couldn’t last forever.

The market should hold above 11700 at today’s close, if not, a rethink of the waves must be made.

A final up move will be the last chance for selling longs with a profit, that final move will end between 12000 and 12200, and then a consolidation can take the market to 11250. If reached, that is the level to start buying again.

Here is another look,

The market should hold above 11700 at today’s close, if not, a rethink of the waves must be made.

A final up move will be the last chance for selling longs with a profit, that final move will end between 12000 and 12200, and then a consolidation can take the market to 11250. If reached, that is the level to start buying again.

Here is another look,

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## About Me

- Erick Stern
- From the Dominican Republic - Swing Trader Speculator - Civil Engineer/Project Manager - sternloinaz@gmail.com