Value of Perfect Information

This first Chart is my EOD analysis that was posted on 8 June 2010. My primary scenario was the Bullish path depicted by the blue arrows. These arrows were drawn to indicate typical market direction and action for the next day. The first arrow up indicated that I thought the market would make a little headway before correcting into a buy-the-dip setup. Then I expected a significant rally into the EOD.

The chart below is the market’s action the next day with the arrows superimposed. Not perfect, but I’ll take that call all day long!

We don’t provide a day trading system. I am a probability trader that has modified a system that gives you an opportunity to learn to fish. The value we provide is in understanding setups and managing risks. However, there are times when I will give you a fish and other traders here will do the same. Also, please remember that this is about probabilities, not certainties.

My goal would be an “Elliott Wave for Dummies” curriculum. I love all the “for Dummies” books because they strive to simplify and clarify. They are profoundly simple. The mark of a good teacher IMO is someone who can get the hay down from the loft so the horses can eat it. Many teachers like to complicate their subject matter so they can appear “smart”. I have no use for insecurity in teachers. The old saying that “it’s better to teach someone to fish than give them a fish” is never more true than in teaching.

To that end, the best way to see what we do on a daily basis and on an intraday basis is to try our Premium Content. If this site doesn’t add back more than the price of admission, then you have no obligation to subscribe after one month, and you will have still learned some Elliott.

If you like what you see here, wait to see how MortiES’s analysis can assist you in your everyday investing or trading strategy! Go ahead, check out my track record and Click on “Subscribe to MortiES Premium” and give it a try! I am offering a 30 day free trial period.

Or just click the “Sign Up” button below!

This is my 26May2010 EOD post with analysis for the upcoming session. Analysis was done with a combination of Elliott Wave and typical Fibonacci relationships. As I stated in my post, I was fairly confident in this projection, but once ES got to the upper target, I felt that there were two scenarios possible. But for the next day, I was confident with my analysis. We had some other good calls this week, but this was my favorite.

The chart below is the path that ES took up until the close of trading the next day. I overlaid the arrows on the chart, and as the chart shows, this move was nailed.  A 50 point day makes a difference to any trading account.

We don’t provide a day trading system. I am a probability trader that has modified a system that gives you an opportunity to learn to fish. The value we provide is in understanding setups and managing risks. However, there are times when I will give you a fish and other traders here will do the same. Also, please remember that this is about probabilities, not certainties.

My goal would be an “Elliott Wave for Dummies” curriculum. I love all the “for Dummies” books because they strive to simplify and clarify. They are profoundly simple. The mark of a good teacher IMO is someone who can get the hay down from the loft so the horses can eat it. Many teachers like to complicate their subject matter so they can appear “smart”. I have no use for insecurity in teachers. The old saying that “it’s better to teach someone to fish than give them a fish” is never more true than in teaching.

To that end, the best way to see what we do on a daily basis and on an intraday basis is to try our Premium Content. If this site doesn’t add back more than the price of admission, then you have no obligation to subscribe after one month, and you will have still learned some Elliott.

If you like what you see here, wait to see how MortiES’s analysis can assist you in your everyday investing or trading strategy! Go ahead, check out my track record and Click on “Subscribe to MortiES Premium” and give it a try! I am offering a 30 day free trial period.

Or just click the “Sign Up” button below!

Guest post by Mark!  

A MortiES’ premium subscriber!

Here is a chart. Potential rally next week to upper trend line around 1115. But who knows?

Here is a potential big picture view. Pink lines are all parallel and run parallel to orange modified Schiff pitchfork lines. Support today was off pink line from prior swing low. Thick pink line from Jan high cuts through around 1145 (just under a .618 of latest swing). Potential right shoulder. If the neckline at today’s low was then to break, target would be around 862 near July 09 low. If we break higher, pink line target would be around 1262 which would equate to 1.272 ext ret of this pullback. Happy trading to all, Mark

Here is a picture of how the Emini has been trading within a pitchform frame of reference.  See it right now getting support at the median line and the blue downward sloping line.  If it can’t break above the upward sloping green line, it would be a sign of weakness.

Strength and weakness are defined within the channel, not on the horizontal, so for example if the vehicle is unable to make a new high within the channel, even though it might have made a higher high numerically, this is a sign of a weakening trend.

I hang out at MortiES Premium during the trading day where I provide charts and analysis during the trading day. Mortie has a free thirty day trial going on. Give it a try by going here: http://www.bostonwealth.net/subscribe-to-morties-premium/ and then clicking on

A Wave 4 is described as a Profit-Taking Wave. It is not so much that the Bears are getting stronger as the Bulls are taking profits off the table as they see them eroding. The mini-crash on 6May may not have been real in the eyes of many, but it did technical damage to the market. The emotions of traders are seen in the market as fear and greed have their way. That is also why I said in my post on 6May that the low of that day would be taken out, even though the massive rebound made many think it was just an anomaly. That low (1056) was broken Friday as ES dipped to 1051.25. I think we still have more to go, but I’ll take that new low for now. If that first leg down on 6May didn’t convince traders and investors that there was a significant correction beginning, then the more deliberate decline to the new low on Friday should have convinced them that there is trouble brewing with their new-Bull market. IMO, this is why technical analysis is so great. It is based on repeatable mass psychology, and it is driven by the emotions, fear and greed. Fear and greed are ever-present human emotions that form repeatable patterns in the market, whereas news and world events cannot be anticipated and measured by the lowly traders like myself.

The first chart below is an aggressively projected path for ES. As markets unfold, they reveal more information and counts can change, but for now this is how I am reading this 90 Minute Globex Chart. I am counting it as an ABC correction, making up W4 of the impulsive rally beginning 6Mar2009. I’m sure EWI – the Elliott gods in Atlanta – have this as the beginning of an impulsive move down after the completion of what they would call P2. They might turn out to be right, but that is not the flavor of Kool Aide I like at this time. I find that I have done well in analysis by not throwing the towel in too quickly by calling an end of a trend prematurely. Because this move up from 6Mar can contain a correction like the one I am proposing, I will go with it until proven otherwise by market action. Either way, I am Bearish until we end this wave and reverse into a W5.

For the new subscribers who may not have seen my Weekly chart that has the most Bullish scenario for ES, it is presented here with the newest data.

And then the most important question for short-term traders, what is it going to do Monday? Well, even during Bearish times, there are situations when we have to project rallies. Monday is one such time. I have no idea how ES will get to my target on Monday. I could take all day to form a green candle that makes it to the end of W4 or it could gap up during Globex and head down. We will just have to wait and see. W3 is at its typical, yet minimal, target level. It could also extend and continue on down to another Fib level, but my impression is that we will see a rally to at least the 1100′ish level.

We don’t provide a day trading system. I am a probability trader that has modified a system that gives you an opportunity to learn to fish. The value we provide is in understanding setups and managing risks. However, there are times when I will give you a fish and other traders here will do the same. Also, please remember that this is about probabilities, not certainties.

My goal would be an “Elliott Wave for Dummies” curriculum. I love all the “for Dummies” books because they strive to simplify and clarify. They are profoundly simple. The mark of a good teacher IMO is someone who can get the hay down from the loft so the horses can eat it. Many teachers like to complicate their subject matter so they can appear “smart”. I have no use for insecurity in teachers. The old saying that “it’s better to teach someone to fish than give them a fish” is never more true than in teaching.

To that end, the best way to see what we do on a daily basis and on an intraday basis is to try our Premium Content. If this site doesn’t add back more than the price of admission, then you have no obligation to subscribe after one month, and you will have still learned some Elliott.

If you like what you see here, wait to see how MortiES’s analysis can assist you in your everyday investing or trading strategy! Go ahead, check out my track record (last week we accurately forecasted 50 points of market action) and Click on “Subscribe to MortiES Premium” and give it a try! I am offering a 30 day free trial period. 

Or just click the “Sign Up” button below!

With ES down more than 13 at around midnight, I made the following prediction:

http://slopeofhope.com/2010/05/thurston-i-cannot-believe-that-we-missed-slopefest-look-at-all-the-fun-everyone-had-surely-the-lloyds-parties-are-not-a.html

Looks like my prediction of green came true!

This is the second weekend in a row that I have nailed the ES prediction.. here I called for a lock limit up on ES of +55 on Saturday night even before the Greek EU bailout was announced on Sunday evening…

http://www.bostonwealth.net/2010/05/09/limit-up-who-knew/

Here is my 2May2010 End-of-Day post. It was a rather bold projection for the next day, but I could see no other high probability, alternative scenario.

This is the way the market unfolded the next day. I don’t guarantee results like this every day. The market doesn’t make moves like this every day. But when I only have one arrow on my projection for trading the next day and a highlighted target area, I am not hedging my bets.

The best way to see what we do on a daily basis and on an intraday basis is to try our Premium Content.

If this site doesn’t add back more than the price of admission, then you have no obligation to subscribe after one month, and you will have still learned some Elliott. All you have to do to start your 30 day Free Trial to MortiES’ Premium Content is go to:

http://www.bostonwealth.net/subscribe-to-morties-premium/ and then clicking on

or just click the “Sign Up” button above!

Bears remember this please:

Two important metrics vis-a vis interbank lending and general credit conditions, while registering a slight bump in the past few weeks, currently are well within the normal zone.  However it is interesting to note that the last time the S&P 500 came crashing down towards 1100, those markets were in severe distress.

Bears remember this please:

Citigroup has studied 50 years of large one-day falls on the S&P 500. When markets have fallen 3 per cent or more on a given day, the average return over five, 20 and 60 days was 0.78, 0.21 and 2.56 per cent, respectively

Bears remember this please:

Analysts collectively are looking at 2011 earnings for S&P 500 companies above $95.  Applying a 16.37 or so multiple will get you very close to new market highs at around 1555 for the S&P 500.  Read here  to see how to apply the multiple!   Highest close was 1565 on October 9, 2007 and highest intraday level was 1576 on October 11, 2007.

err folks…. very simple rule here.. the Greek Crises will be resolved by June 11, 2010.. no ifs ands or butts about it.. no kinda sorta maybe but not really anything about it.. you all know why.. they will all have a giant pacifier that will have them all transfixed and glued to the tube! World Cup 2010 with Greece in it!!!!
You think they wanna be out throwing stones!!! Greece won Euro 04 and the country went ballistic with happiness for months.. encore and round two with the World Cup just weeks away.. win or lose it will unite the country in the global of global sports!!!!!

How the world markets looked on Friday

Today we celeberate our one year anniversary since launching our website on the same day last year when the bank stress test results became public.

What a difference a year makes!  The stress test results was one of the seminal events that marked the rapid ascent of the bull market; and yet today, a year later, the market is yelling out loud:  Payback is a bitch!

This is how our site looked during its nascent days last year!

Way back when in technical analysis school we were taught that vertical moves were the sign of an impending end to a market trend.  It does not matter if the move is either up or down. It is that sharp sudden change in direction. The VELOCITY of the move!  The one exception is if the market has been listless, flat, moved in one direction for a long time.  The investor disbelief that ‘something material’ has changed, may take several shocks to persuade that: as Bob Dylan admonished “The times they are a changing”.  Dan Ascani, once postulated in the mid-nineteen-nineties that [market participants were in such a case of denial] “The first wave down may begin with a crash!”  Another glaring example:  The Dow’s blast off in 1982.  The vertical move after the gap @ 1020 / the average never looked back.

The chart in question shows three Dow moves over the period of ten years.  In each instance it indicates the exhaustion of the accompanying mania:  The ‘eye balls’ /Dot.com rally -which in so many ways was analogous to the high-tech rally that concluded in 1961.  In both cases (1961/2001) after the speculative bubble burst a Blue-Chip rally occurred which took the Industrials (Dow/ S&P 500) to their ultimate top.  This notion that the bull market that began in 1982 ended in 2001 is ridiculous.  Just as the supposition back in the day that the Crash of  ’87 abrogated the bull run. It did not.  The third, in both instances, was a failed rally of dubious technicals that can be best described as a Rabid Run.

The current animal aided and abetted by monetary infusion necessitated by the near collapse of the banking system.  In the 1970′s:   an October mini-crash lay waiting in 1977 after the snap-back rally from the 50% decline.  As that was an inflationary epoch vs. the Debt-Deflation of today we can only hope to be so lucky.  The specter of the Japanese experience (Nikki down 75%) looms if we are not prudent managers of risk.

The Declination of the Move - a tale of three manias -historical analog 1960's/70's