Tuesday, January 6, 2004
Issue Contents:
| 13:02 | Good Morning Time to step back. |
| 16:16 | Active Trader Transcript Real time forum log. |
| 16:35 | Meanwhile... the Fat Lady is spotted. |
| 16:50 | Knowledge Base Wedges and Elliot Triangles. |
For the balance of this week, we will be uploading comprehensive survey of all the major market indices, interest rates, gold and currencies.
It's the beginning of the year, and perhaps an important turning point in the market, and it deserves our undivided attention.
Real time forum log.
Click on the title above to expand this document.
When we last looked at the weekly charts of the major market indices on December 3, 2003, we said:
I want to point out that with the exception of the Semiconductor Sector Index, we can observe that the last few up and downswings for the three broad indices have been getting progressively smaller and overlap each other's trading range. This has produced daily charts with an ever-smaller trading range, making it hard for things like day trading. Given that market sentiment is extremely positive out there, we have to make allowance that these rising wedges could be the "wedge as climax" pattern, therefore, making this M Test of Top even more important. The only other alternative to this is what the Elliott Wave people call the Wave Four Diagonal Triangle, a pause before a straight up climax move to make a Wave 5 spike high. Obviously, that would require the markets to pick up steam and just blast up in a near vertical trajectory. So far we have not seen that yet.
Fast forward by a month, and the daily chart of the S&P 500 index tells the story. I am not sure when the last time I ever saw a broad stock index sporting an ADX on the daily chart over 50, and right now, both the S&P and the Dow Industrials are in this position. Add this to the fact that what follows Wave 4 is Wave 5 in Elliott Wave theory, this means that this move "should" be the last leg on the upside.
P.S. Tomorrow is the Wolf Full Moon! Beware!
We will post tons of charts tonight, and until then, as a bonus, all subscribers can access today's Active Trader Transcript where we documented wedges and Elliott triangles in unprecedented detail. Enjoy!