US - potential targets for the end of this rally

[Ian56]

I have potential targets for the end of the rally of Dow 10270 to 10290, S&P 1176, Nas around 2100.
Reasons below.
Any comments appreciated.

Regards,
Ian



On the Dow since 21/9 we have
Wave 1 8062 - 9598 = 1536 28 trading days
Wave 3 9024 - 10169 = 1145 21 trading days
Wave 5 9736 + 1536 = 10272

Assumes length of wave 5 = length of wave 1.
The problem with this is that elapsed time for wave 5 is much shorter than wave 1 if it happens tomorrow.

Taking the pennent formation from today
Wave 1 was 9985 - 10151 = 166
Wave 3 target is 10276 (10110 + 166)

Taking the rally from 14/12
wave 1 was 9735 - 10090 = 355
wave 3 was 9985 - 10185 = 200
wave 5 was 9935 + 355 = 10290

An alternative theory is that around 10270 would be a backtest of the broken trendline from 14/12.

On the S&P we have
Wave 1 944.8 - 1110.6 = 165.8
Wave 3 1053.6 - 1173.6 = 120
Wave 5 1114.5 - 1176 = 61.5 (postulated target)

61.5 is 37% of wave 1 and 51% of wave 2. (Close enough to 38.2 and 50?)

An alternative theory is that around 1176 would be a backtest of the broken trendline from 14/12.

Taking the pennent formation from today
wave 1 was 1142.4 - 1161 or 1162 = 19
wave 3 was 1157 + 19 = 1176

Taking the rally from 14/12
wave 1 was 1115 - 1153 = 38
wave 3 was 1140 - 1164 = 24
wave 5 1138 + 38 = 1176

24/38 = 63%.

On Nasdaq we have
wave 1 1387 to 1792 = 405
wave 3 1646 to 2065 = 419
There does not appear to be a wave 5, December has been a corrective / consolidation wave structure.

Taking the pennent formation from today
wave 1 was 1950 to 2030 = 80
wave 3 2023 + 80 - 2103

Taking the inverse H&S pattern on the monthly chart.
Head at 1918, neckline broke at 1997. Minimum target 2076.

Around 2100 would give a backtest of the broken up channel from Sep.

 

[chester]

US potential targets.

Certainly a very interesting read. I certainly see major resistance on the S&P at 1174-1176. If we clear that I might have to turn bullish.

 

[Ian56]

I am now looking for a correction high sometime between 30/1 and 1/2 before the next leg down.
Targets - Dow 9980-10030, S&P around 1152, NAS around 2000.

Likely bounce on the Dow tomorrow from 9810-9820 region as per Chartrman's postings.
A move below 9800 and especially 9780 is bearish for tomorrow.

The following charts for the S&P sum up my take on the current situation.

http://www.bearforum.com/cgi-bin/bbs.pl?read=214708

http://www.bearforum.com/cgi-bin/bbs.pl?read=214643

S&P and NAS also look to be forming short term consolidations, which if broken to the upside suggests targets around 1150 and 2000.

The situation is less clear cut on the Dow and I am postulating chartman's trendlines.

Cycletimer consensus have 30/1 - 31/1 as a short term cycle high.

Regards,
Ian

 

[Skimbleshanks]

Great post Ian!

Skim

 

[Ian56]

Take a look at Raptor today.
It looks very much as if wave 3 of a significant decline is now in progress.
Within wave 3, wave 1 looks to be nearing completion.
(Wave 1 was 8-9/1 to 22/1.)

The indices are at or near significant support.
Dow 9600, S&P 1098 (major), Nas 1880.
I am hoping we get a short term bounce today.
Wave 3 of 3 may start immediately after the Fed meeting at 7:15pm?

Wave 3 should not be the shortest wave and should be a fibonnacci relationship to wave 1.
Wave 1 was 600pts on the Dow.
Fibonnacci targets - 1.00, 1.618, 2.6.
So from 9908 we have targets of 9308 or 8937 or 8348.

Adopting a similar principle to the S&P and NAS we have targets of :
S&P 1078 or 1040 or 980.
Nas 1740 or 1640 or 1388.

Note how close the second 2 targets are to :
a) the low of the 1st wave up from 21/9
b) the low on 21/9

I am looking for a realistic target on the Dow of around 9000 by mid Feb.

Looks like my previous post was out by 1 day and 1-2 days worth of rise.
The indices are weaker than I expected at the start of the week.

Regards,
Ian

 

[RogerM]

Ian - thanks for an excellent series of posts. I always get confused with EW counts - the charts in your links shown above seem very clear. I don't disagree with your targets - I have formed much the same view using different techniques - i.e. traditional consolidation, s/r and measured moves. And it could all happen quite quickly!

 

[Naz]

After recent events we know that realisticly predicting what the market might do is very frustrating but it seems to be a pass time that many of us like to have a go at.So here's my input.

I like fib's on the Nasdaq comp for my workings because in every time frame they work extremely well.The more fib levels joining at one point the more important that level seems to become for traders.

Many ,many times the Nasdaq runs consolidates and then runs the same distance again from the consolidation.I have noticed that if you take the beginning of the run and project the fib grid into the future if the 38% and 62% match the edge of the consolidation highs and lows then where ever the end of the fib grid ends will be the end of that run and a possible turning point.

This works even better if you have another fib level from a different time frame meeting at the same point.

So using this info if you take the 50% retracement of the Sep low at 1380 to the Jan high at 2100 (which its self is a fib level of the previous high in May 2001) Then the 50% retracement from 2100 is 1741.

If you then take the fib grid from 2100 and project it into the future making sure that the 38% and 62% fall on the point where the comp has bounced (ie 1880 and then 1960) then the end of the fib grid ends at approx 1741.

If you go back to that high in May 2001 (2320) and the low in Sep 2001 (1380) then the 38% retracement of that move is 1741.

So if you realy like fibs,one could argue that this latest move down is going to take the comp to 1741.Which if you notice is one of the targets that Ian56 has posted on this thread as well.

All workings are approximate.

I would also say this, that in the last two years as the Nasdaq has fallen, important turning points have nearly always had some kind of fib level associated with them.If one believes that the economy will pick up,at some stage the Comp will make a major higher low on the weekly charts,this may very well be at some kind of fib level.So i believe that many players will be watching these important levels with renewed interest.

 

[Ian56]

Looks like a classic ABC correction today of yesterday's rally.
Wave 1 of this decline, with wave 2 complete or near complete.
Target for wave 3 on the Dow is around 9470-9430. 9450 is 38% retracement of the rally from Sep.

Regards,
Ian

 

[Naz]

Well 1745 near the close on the Nasdaq today.Maybe there is something in these fib's after all.