E-Wave – Page 41 – Slope of Hope with Tim Knight

Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Another Analog (by Nathaniel Goodwin)

By Tim Knight - 15 years ago (17, Sep 2010 5:59:47 AM)

After reading some great posts on the thoughts of Serge and Pug Thursday, I thought I would throw this analog out there. This one has been in the back of my head for a few months, and is one reason I’ve tried to lighten up a bit on the bearish side. I am not trading off of this or any other analog, just keeping it in the back of my head along with all the others.

If this panned out, it would be like a strung out version of the 1960’s. The pattern we are currently in could take a few years longer than it did in the 60’s. Elliott Wave wise; this is sort of like what I think Pug is projecting. ((We could also be in an X wave right now from the 666 low after a big A-B-C from 2000-2009, and possibly break the 2008 high to conclude the X wave. What could follow is another mess of A-B-C crash-rally-crash (or just painful sideways motion) that could last until 2020-2025)).

I believe that Prechter’s P3 then P4 and P5 is actually the quickest and easiest way this whole mess could end up in terms of EWT; unless the A-B-C from 2000-2009 ended the correction, and we are now in a new bull market. To be honest, I think there are better ways for me to spend my time honing my trading skills than worrying about EWT long term. No matter what happens, EWT will find a way to be correct in the end!

Here is a fun-fact, mom says I was actually conceived sometime in March of 1974, and was born on 10/04/1974, which was the day that awesome bear died.

One theory I have is that I may need to impregnate a willing female sloper, which could possibly start the beginning of the next and final big sell off. When the slope-love-child is born, we should all probably dump our shorts and go very long for the remainder of our lives.

If any slope-babes between the age of 21 and 52 are interested in the creation of my spawn, please leave your contact information in the comments section below. This offer is also valid for Bloomberg’s Deidre Bolton and CNBC’s Amanda Drury.

Pug

By Tim Knight - 15 years ago (16, Sep 2010 10:12:36 AM)

As many have gathered, I'm been kind of "down" on Elliott Wave lately (for reasons regular readers know all too well). One E-waver, though, seems to get consistent respect from Slopers, and that is Pug.

Here is his site, which appears to be partially free and partially fee-based. Now let me be clear that my general interpretation of the market's direction differs considerably from Pug's, although ultimately we are in total agreement (that is, the S&P getting somewhat below the February 2009 lows, but not by apocalyptic amounts). Here is his latest "big picture", which calls for a rise to new highs (gack!!) followed by a long fall.

There's been enough adulation about Pug in the comments section that I thought it was high time to point out this impressive site.

ES and EURUSD Break Support (by Springheel Jack)

By springheel_jack - 15 years ago (20, Aug 2010 8:11:01 AM)

I was looking for confirmation that a major decline might be starting
yesterday and I got it when ES broke the rising channel. Looking at SPX
the channel was broken even more convincingly and just to underline the
point the 13/34 daily EMAs recrossed bearishly, backing up the 13/34
weekly EMAs which recrossed bearishly last week:

EURUSD didn't break the broadening ascending wedge yesterday but has
dropped well below it overnight, and has also dropped through the
neckline of the big H&S pattern indicating to 1.214. Short of a
really major recovery today I'm regarding the EURUSD wedge as broken,
and that is confirmation once we see the close today that we are likely
to see new 2010 lows on both ES and EURUSD:

Where we are on EURUSD is of enormous importance in my view as it is
the key inverse proxy for USD. I've posted before on the complex
relationship for the positive correlation between EURUSD and ES/SPX, and
that the moves down on ES move furthest and fastest when both ES and
EURUSD are both in powerful waves down, as they were between the SPX top
in April and the early June, during which time ES fell just over 180
points on a peak to trough basis. I think it is now likely that we are
in another such period now.

I have put a tentative EW labelling on the EURUSD moves down from the
top so far. On my primary count wave 1 completed at the June low, and
the recent high was the top of wave 2, putting us in wave (iii) of 3
now. On my alternate count we just completed wave (iv), which retraced
almost exactly 50% of wave (iii), and have just started wave (v) of 1.
EW pedants should forgive my not using the standard labelling, but I
think the meaning is clear enough, and either way new 2010 lows from
here now look likely:

Looking at the SPX daily chart I have also found a simply
beautiful declining channel from the April high to support this overall
picture. Looking at it now it is a perfect technical declining channel
from the top, and should define the target for the current swing down,
subject of course to the time taken to complete it:

On the basis of that channel and the current situation on EURUSD, and
assuming that we don't see a major reversal on EURUSD taking it back
into the broadening ascending wedge by the close today, I am therefore
seeing the next major swing low in the 940 SPX area in mid-September. We
shall see if I'm right over the next three weeks. 🙂

In the shorter term I also have a smaller declining channel on ES for
the current move, and also a largish potential H&S pattern
indicating to the 975 area. These give us the two most likely bounce
levels for the immediate move down, and they are the 1050 ES area to
finish the head on the potential H&S pattern, and the powerful
support level at 1037 ES, which would be the declining channel target
and also the neckline for the big H&S pattern on ES / SPX that
indicates to the 870 area. I'm favoring the lower target:

So there we are. I have put my bear suit back on and am once again
targeting 870 SPX as the most likely main target for this move down, as
it is the target for the big SPX H&S, the broadening formation,
and also the bearish gartley pattern that I posted yesterday, as well as
being the key support / resistance level for the October 2008 to July
2009 period. I am hoping that we will get a second Hindenburg omen in
the next few days just to add the final touch to the overall technical
picture here, which in my view hasn't looked as bearish since August
2008.

EURUSD Breaks Support (by Springheel Jack)

By springheel_jack - 15 years ago (10, Aug 2010 7:46:39 AM)

EURUSD finally broke support on the rising wedge overnight, and not
before time. I am expecting to see a good sized retracement now. My
target is in the 1.28 area, though technically of course, the target is
1.22. I've mentioned before that rising wedges often evolve into
channels or broadening wedges, and I'm expecting this one to evolve into
a broadening ascending wedge, and have drawn in the rising support line
on the chart:

GBPUSD, which has resolved into a clear broadening ascending wedge now,
is retracing back towards the 1.55 area. I'm somewhat doubtful about
this pattern breaking down and support there may well hold:

AUDUSD broke the rising wedge on the daily that I posted the other day.
Nice catch braddurden for pointing it out. I'm seeing some support at
0.90 but I think it's more likely we see a fall to the main rising
support trendline in the 0.87 area:

Oil completed the bearish gartley pattern I posted, though it was
Keirsten who first pointed it out of course, and reached the top
trendline of the rising channel. I'm seeing some support in the 79 area,
but am expecting a fall to rising support in the 75.50 area:

Dr Copper has broken support overnight and looks likely to return to
rising support in the 310 area, and to the extent that copper is a lead
indicator for equities, it is currently pointing firmly down:

So far, so bearish, but where does that leave equities? Well, that's all
about the rising wedges. In the short term the second of two rising
wedges on the ES 60min broke downwards last night. The first wedge broke
down last Friday and played out to target at 1104 ES. The second wedge
has the same target and with a bit of help from EURUSD, should have no
trouble making it there:

If ES can make it back to 1104, then the main rising wedge on ES will be
broken, and that is very much the main prize here of course.
Technically the rising wedge target indicates back to the July ES low,
but more likely in my view we will retrace either to the 1070 or 1084.5
area, or to the 1040 ES area to make the RS on a big IHS that should be
obvious on the chart below. I have listed the full range of targets on
the daily chart and I am hoping that channels or patterns formed during
the descent will make it easier to call this on the way down:

For a number of technical reasons, as I've explained in previous posts,
I'm expecting this to be merely a retracement in a larger bullish
picture. In EW terms I think we have just finished wave 1 up of a new
move up on equities from the July low, and we will have to retrace a
long way before I start to reconsider that seriously. That's not because
I think the recovery is real or that current economic policies are
putting us on the road to sustainable prosperity, but while the rotten
fundamentals will bring down this market sooner or later, I'm doubtful
about that happening in 2010.

For a good picture of the current EW picture from the bull side, my friend Pug posted a publicly viewable summary
last night that I think is well worth a read, and the scenario I have
outlined today fits very well with his alternate scenario.

More Elliott Wave Thoughts (by Nathaniel Goodwin)

By Tim Knight - 15 years ago (05, Aug 2010 7:01:25 AM)

Living alone the past week and a half has taught me that I am not much of a bachelor. I’ve
been told that I’m not the best person to be alone with, which is probably why I like having a roommate – mom, grandma or the colonel… whoever, I don’t like being alone by myself.

To curb my loneliness, I asked local street dweller Stun Gun Jones to move in for a bit. He agreed to stay until the Colonel gets back on the condition that I don’t cramp his lifestyle by making him use the bathroom and shower.

Last night I was showing him some charts with long term Elliott Wave counts, and he started that drunken laugh/cackling people hear from him all day on the street. He stated that the following EW count was just as possible as the count with EWI's P3 panning out, and warned me not to place big bets on very speculative EWT outlooks or be too firm with my beliefs on how things will play out long term.

After hacking up some phlegm and Irish Rose, Stun Gun said that there are a few safer ways to use EWT, one way is to only try to catch 3rd waves. A third wave is the most powerful or “glorious” of all waves, and a third wave can be a 3 or C – both are third waves. Wait for an impulsive first wave to appear, it could be a 1 or an (A), wait for 2 or (B) to appear. Enter the trade anywhere from 38-61% retracement of the first wave, set stops right below the first wave. Exit can be tricky, look for divergences or whatever to exit the 3rd wave (which is either a 3 or a C, who cares!)

I have to go empty Stun Gun’s pee-jar, another prerequisite of him moving in. One other thing he told me though was that lots of folks are looking for Aug 5th-6th as an important cycle or turn date, we are also very close to the 50% retracement area from the April 26th high to July 1st low. Seems like a good place for a bearish turnaround. His advice helped me out in early July, so I’ll be taking a close look the next couple of days.