As usual, the market is smarter than almost everyone and especially smarter than me! I was convinced until Wednesday morning that we were going lower, but the seasonals won out and we are having another sharp rally to shake out the bears before the big decline. There are turn dates aligning now in all the charts so we could be close to a high at Friday’s close. Whether any such high if it develops is a wave A of something implying plenty more sideways to up price action before a tradeable top or a wave C of something implying lower prices immediately ahead is open to debate.
The blue vertical lines show a spiral calendar grid aligned running forwards from the April 26th, 2010 high. Blue F8 falls on Sept 8th which is shown on the chart as Sept 6th, which would be the first trading day next week except the US markets are closed for the Labor Day holiday. Weekends and holidays are accounted for in the horizontal chart scale over the entire year but the vertical spiral lines can be off up to 2 days due to weekends and holidays in circumstances like this weekend. This week the red vertical lines show a spiral calendar grid running forward from the high immediately after the Flash Crash on May 13th, 2010. Red F5, F6, and F7, and maybe also F4 are good alignments.
I am including a Gold chart this week both to illustrate some previous spiral alignments, but also because it has potential turn dates immediately ahead. See the comments just above the chart.
I recommend clicking on each chart to see the enlarged version as browsers tend to do awful things to shrunken images, such as remove price bars entirely.
Dow
Spiral Calendar Turn Dates Chart For Dow Jones Industrial Average for September 3rd, 2010 – click to enlarge
S&P 500
Spiral Calendar Turn Dates Chart For S&P 500 for September 3rd, 2010 – click to enlarge
Nasdaq-100
Spiral Calendar Turn Dates Chart For Nasdaq-100 for September 3rd, 2010 – click to enlarge
Gold – GLD
Gold has 3 possible turn dates in a row next week and into the following week. These are indicated by the small red bars to the right of the price chart that show possible turns over the next 10 trading days. I also show two individual spiral grids – the red one below the prices originates on the February 5th, 2010 low and shows good alignments for at least F5 through F9 and has F10 coming up on Sept 12th, which is the major potential turn date for stocks also. The blue grid is drawn forward starting from the June 28th high. It has one major alignment so far at F1. Blue F6 is also coming up but not until Sept 20th.
Spiral Calendar Turn Dates Chart For Gold (GLD) for September 3rd, 2010 – click to enlarge
New visitors: please see this post for a brief explanation of the spiral calendar.
The first chart shows two forward-running spiral calendar grids superimposed on the oil market decline (USO). The top blue vertical lines are spiral dates aligned with the all time top on July 11th, 2008. The lower red vertical lines are spiral dates aligned with the corrective high on August 21st, 2008 which also happens to be close to F3 from the July 11th top. As you can see most of the peaks and valleys during the price decline align with a spiral date from one or both of these grids. We can draw other grids forward from other post-top highs or lows to pick out virtually every single high and low within about 1 day.
Oil – USO – Spiral Calendar Alignments During The Decline
Spiral Calendar alignments for Oil/USO forwards from July 11th, 2008 and Aug 21st, 2008 – click to enlarge
Oil – USO – Spiral Calendar Alignments During 2010
More recently a high on December 1st 2009 and the immediately following low on December 11th, 2009 combine grids to pick out a high percentage of subsequent highs and lows in the 2010 market within a day or two.
The blue vertical lines are dates aligned with Dec 1st, 2009, and the red ones are aligned with Dec 11th, 2009.
Spiral Calendar alignments for Oil/USO forwards from Dec 1st, 2009 and Dec 11th, 2009 – click to enlarge
September spiral calendar predictions are dominated by a single large peak with a 5.5 score on Sept. 12th 2010. However there is also a week with a sustained score in the 2.5-3.5 range from Sept 3rd to Sept 9th spanning the Labor Day holiday weekend with US markets closed on the 4th-6th, and minor peaks on the 17th/18th, 22nd, 24th and 30th. This suggest two periods of choppy action, with perhaps a more significant turn in the middle. As always we will have to see how the market is positioned as we come to these turn dates.
For August the spiraldates score turn date on the 6th/7th (Fri/Sat) matched the high on Monday 9th within one trading day. It’s too early to tell if Friday’s high will be a turn to match the August 26th/27th turn date. Looking back to the resolution of the July predictions, the July 27th turn date matched a high exactly, although it was only a short term one preceding the August 9th top.
Bernanke’s speech this morning indicating the Fed would continue “easing by other means” despite zero interest rates reminds me of the climactic scene from the first book of Lord of the Rings in which Gandalf (Bernanke) fights the monstrous Balrog (deflation) as he falls seemingly forever into the chasm (the coming bear market). At this point, Bernanke is still hanging on to the Bridge of Khazad Duhm by his fingernails.
The heavy volume early in the day may have been the plunge protection team at work as Bernanke spoke and they succeeded in pumping the market up for the day at least with a textbook flat corrective rally forming from Wednesday’s and Friday’s lows. With that in mind I have drawn today’s turn date in red (we are above a 5-day moving average at least at the close) indicating a possible top either at today’s high or early on Monday, or if the corrective wave extends further in price or time, then later next week.
Spiral grids are drawn forward from the April 26, 2010 high and the F3-aligned June 8th, 2010 low and both are quite often aligned with significant turning points in the decline so far. Note that we are near F6 from the June 8th low right now confirming the August 26th/27th turn date.
I will be posting the monthly turn date chart for September later on in the weekend.
Meanwhile I recommend the Youtube clips of Gandalf’s Battle With The Balrog set to Carl Orff’s Carmina Burana. These are not embeddable presumably for rights reasons.
I recommend clicking on each chart to see the enlarged version as browsers tend to do awful things to shrunken images, such as remove price bars entirely.
Dow
Spiral Calendar Turn Dates Chart For Dow Jones Industrial Average for August 27th, 2010 – click to enlarge
S&P 500
Spiral Calendar Turn Dates Chart For S&P 500 for August 27th, 2010 – click to enlarge
Nasdaq-100
Spiral Calendar Turn Dates Chart For Nasdaq-100 for August 27th, 2010 – click to enlarge
New visitors: please see this post for a brief explanation of the spiral calendar.
The above chart (click chart to enlarge) summarizes the turn date predictions from our monthly charts during the year since we started posting these in September 2009. Notes:
Predictions posted monthly from September 2009, through August 2010 on this blog, generally near the end of the month prior to the predicted turn dates.
Dates with scores of 2.5 or higher are marked with arrows.
Color red/green is determined by whether Close for the day is above or below a 14-day moving average.
Dates that fall on weekends or holidays are plotted on the nearest trading day.
Disclaimer. The predictions made herein are for informational purposes and are not recommendations to any person to buy or sell any securities. The information is derived from sources that are deemed to be reliable but its accuracy and completeness are not guaranteed. The predictions are based on the theory of technical analysis and represent the author’s opinion only. The author does not accept any liability for the use of this web-page. Readers of this web-page who buy or sell securities based on the information in this column are solely responsible for their actions.
This week the charts show a 10-day moving average (red line) which is how we determine whether to plot a red spiral cluster bar (price is above the moving average and so we expect a top) or a green one (price below the moving average so we expect a low).
Spiral clusters indicating a possible turn are present today for the Dow and S&P 500 and also next week, on Monday for the S&P 500 and Thursday and Friday for the Dow. These latter two on the 26th/27th are the ones shown in our monthly chart for August 2010. Nasdaq-100 isn’t showing any near term spiral clusters/likely turn dates.
The blue vertical lines show a spiral calendar grid aligned running forwards from the April 26th, 2010 high, and the red vertical lines show one running forward from the Flash Crash on May 6th, 2010. These dates align quite well with several of the high and low points during the decline so far. Also F7 from the flash crash is not drawn but falls today Friday August 20th, 2010.
Of course there are many other spiral grids that could be drawn starting from other high or low points, but that would make the chart too busy, and in any case this is what the short vertical spiral cluster bars above and below individual dates attempt to summarize in a comprehensive way.
So in summary we may be at or near a wave 1 low today, with a short term bounce due which would correct the move down from the August 9th top, or maybe just from the August 17th top, possibly rallying into the turn dates on August 26th/27th. However given that we are fast approaching a third wave down at multiple degrees of trend, it makes sense to err on the short side.
For more detailed views of possible/probable near-term Elliott Wave counts I highly recommend the blog Daneric’s Elliott Waves which is free, timely, and comprehensive.
I recommend clicking on each chart to see the enlarged version as browsers tend to do awful things to shrunken images, such as remove price bars entirely.
Dow
Spiral Calendar Turn Dates Chart For Dow Jones Industrial Average for August 20th, 2010 – click to enlarge
S&P 500
Spiral Calendar Turn Dates Chart For S&P 500 for August 20th, 2010 – click to enlarge
Nasdaq-100
Spiral Calendar Turn Dates Chart For Nasdaq-100 for August 20th, 2010 – click to enlarge
New visitors: please see this post for a brief explanation of the spiral calendar.
Turns out the high for minor wave 2 was on Monday August 9th, 2010 in all three of the indices we chart here. This was one trading day after the August 6th date predicted for a turn in our August monthly spiraldates score chart. The next spiral cluster according to that chart is on August 26th/27th. Closer in there are green turn dates shown on the charts below for Monday August 16th on the Nasdaq-100, but not until Friday August 20th for The DJIA and S&P 500. However if the decline is as sharp as expected, it may not be a good idea to try to pick a low for the initial move down. In my opinion it makes more sense to stay short during any initial wobbles in minor wave 3 down.
I have plotted charts at a smaller scale this week to highlight the next 10 days, and also to show a spiral calendar grid aligned running forwards from the April 26th, 2010 high. There are several alignments for f1, f3, f4, f5, f6 and a near alignment with the August 9th high for f7. F8 from April 26th high will fall on September 8th, 2010.
I recommend clicking on each chart to see the enlarged version as browsers tend to do awful things to shrunken images, such as remove price bars entirely.
Dow
Spiral Calendar Turn Dates Chart For Dow Jones Industrial Average for August 13th, 2010 – click to enlarge
S&P 500
Spiral Calendar Turn Dates Chart For S&P 500 for August 13th, 2010 – click to enlarge
Nasdaq-100
Spiral Calendar Turn Dates Chart For Nasdaq-100 for August 13th, 2010 – click to enlarge
New visitors: please see this post for a brief explanation of the spiral calendar.
After Friday morning’s decline, I thought the top was in at Thursday’s high, but the big rally Friday afternoon puts that in doubt. Looks like there is room for one more push higher to complete an ending diagonal to close out minor wave two. The spiral calendar is showing a range of potential top dates during next week in all three indices, although there may be some difference in the timing of a top. The S&P 500 is only showing alignment dates for Friday 6th and Monday 9th August, so it may be relatively weaker and could have topped already. The Dow and Nasdaq-100 both show turn dates on Wednesday and Thursday next week, August 11th/12th and also the following Monday, August 16th.
I recommend clicking on each chart to see the enlarged version as browsers tend to do awful things to shrunken images, such as remove price bars entirely.
Dow
Spiral Calendar Turn Dates Chart For Dow Jones Industrial Average for August 6th, 2010 – click to enlarge
S&P 500
Spiral Calendar Turn Dates Chart For S&P 500 for August 6th, 2010 – click to enlarge
Nasdaq-100
Spiral Calendar Turn Dates Chart For Nasdaq-100 for August 6th, 2010 – click to enlarge
New visitors: please see this post for a brief explanation of the spiral calendar.
August spiral calendar predictions show score peaks (possible market turn dates) on the 6th/7th and 26th/27th, and as in July the middle of the month looks very choppy with minor peaks on 11th/12th and 16th/17th. It promises to be a busy month for traders!
For July the spiraldates score peak on the 15th matched the closing high exactly and was one or two days after the nearly identical intraday highs on the 13th and 14th. The second peak on the 27th marked a high exactly – whether or not it is the minor wave 2 top preceding a large decline remains to be seen.
I’m starting a new series of posts of weekly spiral calendar charts for the US Stock indices: Dow Jones Industrials, S&P 500, and Nasdaq-100 posted every Friday evening. These will be the new-style charts with turn dates calculated directly from the chart data mechanically, without any subjective choice of which dates are “significant” highs or lows. I also plan to continue the monthly spiraldates score charts since those have a good track record and it will be interesting to compare the two methods in action.
I recommend clicking on each chart to see the enlarged version as browsers tend to do awful things to shrunken images, such as remove price bars entirely.
Looks like the three indices are in broad agreement without being identical and the July 27th top, originally predicted to be the major turn date for the month back in our July Predictions Spiraldates Score Chart, is showing some good alignment with past highs and low in all three charts.
Dow
Spiral Calendar Turn Dates Chart For Dow Jones Industrial Average for July 30th, 2010 With Spiral Grid Aligned With July 27th, 2010 High – click to enlarge
S&P 500
Spiral Calendar Turn Dates Chart For S&P 500 for July 30th, 2010 With Spiral Grid Aligned With July 27th, 2010 High – click to enlarge
Nasdaq-100
Spiral Calendar Turn Dates Chart For Nasdaq-100 for July 30th, 2010 With Spiral Grid Aligned With July 27th, 2010 High – click to enlarge
New visitors: please see this post for a brief explanation of the spiral calendar.
Sep 03 2010
