Interesting Chart Patterns To Monitor In Coming Days...

[AndyS]

Hi Marc,

This is great stuff here! Your friend who bought the stock @ $16 in his retirement account, I'm sure is most grateful!

Keep `em coming!

Andy

[MR]

Jim,

To follow-up again on our previous conversation, here is something I read this morning in MarketWatch:

"8:56am 08/20/04-- U.S. to continue filling petroleum reserve, Snow says By Rex Nutting"

"WASHINGTON (CBS.MW) -- Oil supplies have not been disrupted enough to justify releasing petroleum from the U.S. Strategic Petroleum Reserve, Treasury Secretary John Snow said Friday. "I don't think we're there yet," he said in an interview on the CNBC financial news network. Snow said the Bush administration intends to keep adding oil to the reserve. The government's additions to the emergency stockpile haven't had much impact on prices, he said. Democratic presidential challenger John Kerry has proposed a moratorium on putting more oil away while prices remain high. The SPR now contains 666.5 million barrels of oil, enough to replace 53 days of imports. The government intends to add 3.4 million barrels in August, 2.9 million in September and 4.8 million in October. The SPR's maximum capacity is 727 million barrels."

Originally posted by MR
Hi Jim!

.... I don't think George W. will do anything with the Strategic Oil Reserves before the election, based on something I read this spring,
commented about here in the spring. (see below)

Best wishes,

Marc

[DuaneG]

Hi everyone,

I did some updating to my daily emini chart and came across this ellipse that has settled in over the last couple of days. I know we are in the early stages of Wave 4, but I wanted to throw it out there to see what folks thought of where we are currently at with the senior average.

[MR]

Thanks Andy.... appreciate it. Just hoping to help someone out there in the little ways that can make a difference.... It really is a true story the Pixar thing. Wishing Google the best, but wondering how much we learned form the internet bust of 2000? Heard, for example, this morning on CNBC their market capitalization is now higher than GM? (or that is what I thought a guest said on Sqwack Box?)

Best wishes, hope all is well with our mutual friends in Hayward.

Marc

Originally posted by AndyS
Hi Marc,

This is great stuff here! Your friend who bought the stock @ $16 in his retirement account, I'm sure is most grateful!

Keep `em coming!

Andy

[jims_id]

Hi Marc

Thanks for the News update re: oil reserves. Looks like they will stand pat at least for now.

How do you rate the stock market rally of late? Alot of the technicals I look at say it's the real McCoy, but lack of volume is troubling. I am impressed at how well the indices have held up with all the bad news out there.

Let's do an in-depth analysis on the SPY if and when we get a correction in here.

Regards,

Jim

[MR]

Dean,

Wanted to follow up more on COP.

One very general reason why I felt COP would "profit-take" more before it returned to the weekly uptrend, was because of two things. The strongest MOB is lower, and so is the 200 period moving average.

It is possible, using the MOB study, one could have identified a MOB support at the immediate low, but it was only a minor pivot, which does not normally have the strongest support. If a MOB comes from a primary or major pivot, it has more strength attacted to it.

I didn't think this minor MOB would hold other than just for a short time.

Don't know if this helps... wanted to share a little more logic behind an earlier comment.

[MR]

I would rate it good odds the rally that started this week is sustainable for time being.
It was a vastly 'oversold condition' in some sectors, which gives room for more unwinding of
short positions very possible.

Your in-depth analysis of the SPY is a great idea.

How about anyone here interested, do some work on it or any of the other indicies this weekend.
Post your ideas here before Monday so we can compare and contrast the different schools of thought out there?

Anyone up to the challenge?

Thanks for the idea Jim....

Your Ohio neighbor, Marc

Originally posted by jims_id
Thanks for the News update re: oil reserves. Looks like they will stand pat at least for now.

How do you rate the stock market rally of late? Alot of the technicals I look at say it's the real McCoy, but lack of volume is troubling. I am impressed at how well the indices have held up with all the bad news out there.

Let's do an in-depth analysis on the SPY if and when we get a correction in here.

Regards,

Jim

[MR]

Ready to start discussion possibilities with SPY? Here is a hypothetical idea.

Look at the Monthly SPY. Either we are in a 3-wave rally where a top continues to build, or we are in wave 4 of a 5-wave rally where wave 4 may or may not have ended yet.

If SPY rallies above 117, there is a good chance wave 4 would be finished and the trend should continue up on the monthly chart.

(my best guess is all)

(two more posts to come soon...)

[MR]

Part 2-- Weekly SPY

Look at the Weekly SPY. On this time frame we can see a little more clearly the immediate wave structure.

The three best scenarios:

(1.a.) A "possible Type 1 Buy" (T1B) setting up?" We are at the end of a wave 4 correction where A = C = 1, where we only retraced the 25% minimum. We have the green Wave 4 Channel, 60% odds of rallying back into a Wave 5 if it holds. We have a black XTL, which is neutral. Great PTI.

(1.b.) The other possible Wave 4, Type 1 setup possibility is more complex. This one, if it continues to evolve this way, is really going to frustrate you. Get out the more sophisticated Elliott Wave books and look up "X" Wave patterns. I think they could take different forms, and they are killers to trade until the later stages.

The last week low was critical. If it did not hold up we may even have to worry about the more complex correction scenario nor working out.

(2) This scenario says we continue to look for a top to build. We eventually break the immediate low and a down trend starts. We held last weeks low. 1.40 is holding. For this scenario to develop, 1.4 would break and the last low has to be broken again.

(my best guess is all)

(one more post to come soon...)

[MR]

Part 3-- Daily SPY

Look at the Daily SPY. I tried to identify some of the immediate support and resistance areas for you to focus on.

I am getting tired, so will just let the chart speak for itself. If I can add anything, will try to comment more later

Is this a good start for ideas?

Marc

[jims_id]

Hi Marc

Wow....that's a tough act/analysis to follow. Helluva job Marc as always. Two little points to add. On a weekly chart, based on the strength of the my custom MACD oscillator, I give the odds a little better than even that at some point in time we exceed the march '02 levels on SPY.

Also, from a non-elliot perspective, we have what looks to me as 2 classic chart patterns working:

(1) A bull flag (I've alluded to this before): As of now we find ourselves stuck in the intermediate trading channels that have been established on SPY. If we rally above the upper channel with some gusto, we've got a shot a much higher prices. If that occurs, we can expect to add the length of the flagpole (beginning March 14, 2003) to the lowest point on the bullish flag for our new target. If the bull flag is the operative pattern, and if we have put in an intermediate low (a big if), a break of the flag generates a target of 145.31!! By the way, that happens to be just about the second wave 5 target on my chart.

(2) Cup and Handle : This is another chart pattern that may be working here. This pattern has been widely popularized by William Oneil of Investor's Business Daily. If the handle is complete on the weekly SPY (again, a big if), the target for this one is computed by taking the depth of the cup to the breakout and adding that value to the breakout line.

IMHO the case against these bullish patterns would be if the SPY price stalls on this recent rally and fails to make a convincing breakout of the flag channel. In that case, I would suspect a bigger ABC wave to be in progress with a potential killer wave C to the downside.

Let's here some more thoughts on this !!!!!

[jims_id]

Another thought

Marc mentioned that the 1.40 has to hold on the elliot oscillator on the weekly chart to confirm the bullish posture of the wave structure. This is a minor point, but instead of 1.40 I like to use 1.45 just from personal experience. In the past I've seen many minor breaches of the 1.40 which recover and go on to finish the wave 5. I know this violates the "rule book" but I've seen it happen so I like to give it a little more leeway. Again, this a small point, but it might come into play if SPY breaks down in here and makes a run for the red channel.

[PRH]

Grains - big rally - expect some followthrough
Bellies - bullish cold storage report yet failed rally. Textbook Fibonacci shorting setup. Following...

[jims_id]

Hi Marc:

It looks like my screwball analysis scared everyone away from participating in the SPY review. My apologies....I'm sorry it didn't generate more interest on this thread. I love the financial markets and I can't understand why this discussion didn't generate more discussion (unless, as I said, it I put the capper on it).

I kind of like to stretch the "rule book" as you can see from my discussion. That MACD oscillator that I used is bears some resemblance to the 5/35 oscillator, but I think its a bit more sensative and can generate early (if sometimes incorrect) "signals".

Regards,
Jim

[MR]

Jim,

I don't think it is the topic or our analysis. Many people are on last-chance summer vacations.

Bloomberg this morning said volume yesterday was the lowest for the year. (summer doldrums.)

Oh well, we tried.

Marc

(PS-- thanks Philippe for the futures update. Good job.)