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Edited By Jeff Greenblatt
March 23, 2006
The email I always seem to get from people is how can they learn more about Elliott.  My answer is to learn from the best.  I spent years following every single move Hochberg made until my forecasts were posted in Club EWI and some of them actually worked out BETTER THAN WHAT THEY WERE DOING.  They took notice, but that's another story.....
My website and ebook with the unique and original methodologies will be ready soon enough so long as I can stay out of the hospital, but until that time comes I have an idea to share with everyone.  This week is another of those FREE WEEKS at EWI.  I happen to admire great Elliotticians the way some people look at a great painting.  For the past couple of days, I've been admiring the work of Jeffrey Kennedy who happens to run the Futures desk over at EWI.  Say what you want about Prechter and their terrible forecasts over the past few years.  One thing they do have is excellent analysts on their staff.  For those of you who are new to Elliott or at an intermediate level I recommend very highly that you download ALL of Kennedy's charts.  Download the monthly Futures report then go to archives and download the past 5 daily reports which specialize in a smaller time scale.  After you do that go over ALL of his charts.  Look at how he puts the wave counts together.  It does not matter if you are interested in cattle, sugar, cocoa, etc.  This is a process that will take weeks if not months.  If you do that, I guarantee you will take your own wave understanding to the next level.
While we are on the subject of FREE WEEK, did you see Prechter's new Theorist?  He has an interesting chart and comes clean on one of his own blunders.  He presents a chart of the Dow in terms of  gold.  On this chart he makes a case the Dow has actually lost half it's value since the all time high in 2000.  I happen to think this chart is quite good.  Those of you who are socionomic students know the President's popularity rating is generally tied to social mood and the rise and fall of the markets.  So how can Bush's rating be so low while the Dow is within a few hundred points of its all time high and the SP500 is at a 6 year high?  This chart explains it.  Unfortunately for EWI the Dow is NOT measured in gold but rather in terms of the dollar.  Prechter FINALLY comes clean after all these years to tell us the wave pattern in the Dow from 2000-2002 was corrective and there is now the possibility of an all time high yet to come.  He makes the case the 2000 high MIGHT be a 3rd wave top.  Thank you very much.  It has been stated right HERE, at least 6 months ago and perhaps as long as a year ago the Dow bear was very choppy, looked corrective and may have led us to a 5th wave extension as the bear bottom in 2002 curiously ended in the vicinity of the 1998 low which also happens to be the fourth wave of one lesser degree.  This may or may not happen as that 2000-2002 wave can still be an A wave down of a larger ABC bear market but the bear market MIGHT NOT BE OF GRAND SUPERCYCLE DEGREE as Prechter contends all of these years.
Last time I discussed a change of stance based on a number of factors.  I also mentioned two mitigating circumstances which were a lower probability.  One of these happened to have been a potential bullish expanded flat IF THE NDX WERE TO BOTTOM near 1660.  The figure I put out was 1662 and it stopped going down at 1660.81. So as crazy and illogical as this seems, for the time being the charts have pulled a rabbit out the hat and have stopped going down EXACTLY WHERE THEY NEEDED TO. Those of you banking on this lower probability play, good luck to you.  You'll need it but the funny thing is it can't yet be ruled out.
What happened today opened the door a bit further for your scenario as the Futures and NDX took out yesterday's low but the NASDAQ DID NOT!  One thing I've observed over time whether to the bull or bear side if the group of indices are not all on the same page the trend might poop out.   For now, the intermarket divergence has a new NDX low not being confirmed by either the NASDAQ or the SOX. 
All is not lost for the bears either.  Check out the SOX chart.  The other day we experienced some real choppy action that I said needed time to sort out because it apparently did not make any sense.  The highest probability right now is the SOX has a developing running triangle that is not yet complete.  A running triangle is one that sets a low(high) for the trend, pushed in the opposite direction and makes yet a new price extreme for that trend that is actually just the B wave and not the 5th wave low.  IF this outlook is correct, the chart will now top between 505-510 and turn down.  Taking out the high at 510 on 3/21 would invalidate this pattern. Assuming a lot for now, if this pattern is right, the thrust measurement would take it down to the 470-475 range where there is a larger cluster of support where it could stage a bigger rally.  If it were to bottom at 471 it would have had a move of a perfect Fibonacci 89 points.  We are speculating here of course but if the SOX is in a bearish running triangle the lower probability expanded flat pattern in the NDX would ultimately fail as the SOX would take the NDX along for the ride.  This pattern has quite a butterfly effect so that will be on the top of the laundry list to watch tomorrow.
The SP500 could be developing a sideways pattern of its own along with the Dow.  I wish I had something more interesting to tell you on that front.
BOTTOM LINE:  We now enter the turn window of the 233rd day off the April low from last year.   With the NDX at a fresh low today, we have made a low within one day of the window.  That would be the other mitigating factor.  When this window closes we will then be in the FED ZONE which almost always brings fireworks.  For now, it appears we start off HIGHER as in any event the SOX would still need upward motion to complete that triangle but also we are dealing with that intermarket divergence.  Then we watch and see what happens.  If the SOX blows out the triangle, we will probably get a retest or new highs but if the triangle completes, we get another small degree leg down. 
The All Ords took out 5000 which means our forecast is on track.  It looks like it has a collision course with the upper trend channel as well as the 160-62 week window.  A new YTE reader wanted to know why the short commentary.  There are times when there is much to say and other times less is better.  Those of you who are new will come to learn in time these charts have magnets attached to them.  Once they elect a path they won't stop until they come to some cluster of Fibonacci time and price points.  The point is NO momentum indicator will stop it.  Why do some charts stay seemingly overbought or sold for extended periods of time only to reverse abruptly?  When the chart hits the time window, that's it.   In this case, the waves have been hard to count as the chart keeps going but the upper trend channel line is near 5100.  Since it's already Friday we are on the cusp of the window near the top of the channel.
I was looking for stiff resistance on the Silver chart at 1060.  We've surpassed that as we are sitting at 1068.  Silver has fulfilled the recent forecasts for continued bullish activity.  We are now hitting a cluster of relationships (3) so we'll see what happens.
Gold is in a more complex situation as discussed on Tuesday.  The bullish candle formation that formed on Tuesday's close came to naught as we took out that low.  The wave pattern since the recent high is very choppy and why I think it is a B wave in an ABC up.  Today we turned up on the 55th hour off the low from March 10th but did not do so decisively.  We are going nowhere fast on this chart.  From where we sit right now we can get one more low before a C wave up kicks in if I've been right about this.
XAU set the fresh low discussed on Tuesday night.  This looks to completed a small degree 5th wave low but that doesn't mean we are about to have a big rally here either.  All it really means is we can finally have the test of the 135-41 polarity area
BOTTOM LINE:  The only change here could be the XAU could catch a breath of fresh air from the recent inertia.  There is a ton of overhead resistance and it has not proven in any shape or form it will be able to take it out, IF IT COULD GET THERE IN THE FIRST PLACE.  Gold is stuck in a very choppy progression that looks nearly complete.  It would be possible for it to break down here but out of this choppy progression I think it should resolve up as this looks corrective.
The dollar held its 50 week moving average much as I thought it would.  Now it is taking the shape of one of those running triangles discussed previously for the SOX.    IF this is the case we are in the latter stages and could be within a couple of weeks of a resolution to a pattern that has been going on for nearly a year.  I put up a new chart that focuses on this possibility and the one of the reasons it might work out is from where I have the 3rd wave high to the C wave low is exactly 29 weeks.  Now we are sitting at 37 weeks as the trendlines converge.  If it was going to break down, it had an excellent chance  just the other day but it did not.
We are straddling the 110.56 area in a retest of the low.  This looks to be a very slow moving pattern since last Thursday that has finally reached the 5th wave.  Tomorrow would mark 7 days down and we could get a very sharp reaction going the other way.
Instead of retesting the low, we pulled back up and filled the gap near 65 left between Monday and last Friday.   The whole pattern over the past month is very choppy and while we remain land locked in a trading range I wouldn't be surprised if this ultimately broke to the downside but it still needs at least 3-4 more days of this type of action.
 For those of who are new, this is the link you follow to get to the charts.  IF you like what you see, please vote for it at the bottom of my page once a day.
The content in THE FIBONACCI FORECASTER is for educational and informational purposes only.  There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information is the opinion of Jeff Greenblatt and subject to change without notice.   Please be advised to consult your investment advisor, attorney or tax professional before making any investment decisions.  Jeff Greenblatt will not accept any responsibility or be liable for any investment decisions based on the information discussed here.


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