ja, das Problem mit den Emails kenne ich. Hab´ ihnen geschrieben, daß sie mich endlich in Ruhe lassen sollen mit Ihrer Beschickung. Das hat dann auch gewirkt. War aber schon etwa penetrant. Hier der Text des Updates, leider ohnen Graphiken, die ich eigentlich am eindruckvollsten finde.
Gruß,
Belex
Financial Forecast Short Term Update
Thursday, May 10, 2001
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Market Snapshot
Updated Daily
Indexes Close
Net
DJI 10867.00 -16.50
S&P 500 1255.54 -5.66
S&P 100 652.08 -4.27
NSDQ 100 1876.59 -52.49
XAU 59.17 3.65
Dollar IDX 115.92 -0.13
Futures Close
Net
Jun DJI 10876.00 -22.00
Jun S&P 1257.70 -5.80
Jun NSDQ 1876.00 -66.50
Jun Bonds 102^5 ^16
Jun Dollar 116.11 -0.11
Jun Gold 270.40 4.90
Jul Silver 441.5 8.0
Editor
Steven L. Hochberg
Welcome to the FREE WEEK!
Update for Wednesday, May 9, 2001; 6:55 PM, Eastern.
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[ANNOUNCEMENT]: Welcome to all who are taking advantage of EWI's free week. This service is designed to act as a bridge between each monthly issue of The Elliott Wave Financial Forecast. We analyze the short-term wave patterns of the various markets covered in the monthly newsletter, which delves into the intermediate-to-longer-term picture. Between these two publications (along with Bob Prechter's Elliott Wave Theorist), you can have a solid grounding in the near, intermediate and long-term potential that each market offers. We hope you enjoy services and find them of value.--SH
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Last Friday's (May 4) wide-ranging outside-up day in the major stock indexes has now been followed by three successive lower closes in the Dow, S&P 500 and NYSE Composite Index. The inability of a market to follow through after an outside-up day is often a bearish sign. Yet for all of the inability of the stock indexes to push higher, they still remain above last Friday's intraday lows. Today the Dow, S&P and NASDAQ were down, yet NYSE breadth was positive. In fact, the Dow is down 68 points since Monday's close, but the number of advancing stocks has stayed ahead of declining shares by more than 200 issues. Big Board down volume ran slightly ahead of up volume, which drove the NYSE TRIN to an oversold reading of 1.30. A simple 10-day TRIN remains oversold at 1.06.
But there continue to be offsetting short-term bearish signs. In Monday's Update we noted the extreme bullish sentiment (see below). The Eliades New TRIN remains overbought at.743. The Commodity Channel Index (CCI) closed at 64.2 yesterday, issuing another short-term"sell" signal for the Dow (by closing below 100). Today's close of 48.5 is the lowest in a month. And we've also talked about the near-term bearish divergences between the stock indexes and some of the momentum oscillators. As a noted colleague of mine likes to say: divergences are like laxatives. Is one enough? Are two too many? In this case, it took several to elicit the subdued pullback of the past several days. But one can now argue that some of these oscillators have reset themselves and are ready for one more push up to new recovery highs. When the near-term technicals are a mixed bag like now, we always devote most of our attention to the Elliott waves, our main methodology. So let's take a look.
We see an interesting and telling pattern that has taken shape in the past several days in the S&P and probably the NASDAQ. First the S&P:
The above chart shows the [S&P 500] from the March 22 low. The rally is taking the shape of an impulse wave (five wave form). Monday I said that a break of last Friday's low of 1235 (futures) and 1232 (cash) would be a strong sign that prices have topped near term. Yet it is now Wednesday night, and prices still have not been able to take this low out. Moreover, the near-term pattern looks like it has traced out a small-degree fourth wave running triangle (see EWP, p. 50). This pattern precedes the final move in an Elliott wave sequence, so its appearance at this juncture suggests one more thrust up to a new recovery high in the coming days. This push up should complete wave A of an A-B-C upward correction.
Another reason to suspect a push up from here is likely is that the Federal Reserve meets Tuesday (May 15) to cut short-term interest rates yet again. Our chart above shows the five Fed rate cuts in this cycle. Three have come in regularly scheduled Fed meetings, two have been inter-meeting"surprise" cuts, as noted. Now look at each of the regularly scheduled rate cut meetings. Prior to each one the Dow has rallied into the rate cut news, then sold off after. The most recent cut in April led to the mildest sell-off. Still, the Dow was lower five days thereafter. So there is precedent to expect the market to hold up into next Tuesday, until after the Fed cuts short-term rates again.
And don't forget that we have another Fibonacci turn window fast approaching. This next turn window is May 14-16 (+ or - one day) as our chart depicts. As we mentioned, this turn window does not have the elegance of our late April window, which had sequential Fibonacci numbers from 610 down to 144 all pointing to the same time frame. Still, the upcoming May 14-16 window is formed by arguably the two most significant lows of the past two-and-a-half years, September 1, 1998 and March 22. For those who are not familiar with these turn dates, whichever direction the market is moving into the window, it should reverse that direction from within (or coming out of) it. If our interpretation of the near-term swings is correct and the S&P is tracing out a fourth wave triangle, then this window should mark a high in the blue-chip stock indexes.
Trendline resistance in the S&P cash is formed by connecting the peaks of September 1 and January 31. This line crosses through 1286.50 tomorrow. The psychological 1300 resistance level is not far above, so a resistance target is 1286.50-1300. The equivalent resistance in the June futures is roughly 1300-1320. The index does not have to spend much time in this area. A quick pop higher would do, with a reversal thereafter. But we won't get ahead of ourselves. If the S&P cash comes under 1232, the wave (c) low of the triangle pattern, then my wave labels are simply wrong and the index has already topped and is headed lower. The equivalent key support in the June futures is 1235. So one can sum up my near-term position in the S&P as short-term bullish as long as the above key support remains intact. If support is violated, the index is likely to test the 1200 level in the coming days.
In the [NASDAQ 100], we've been discussing the five-wave rally from the April 4 low (1348.52) to the April 20 high (1981.90). This rally is wave A of a larger A-B-C upward correction. The Composite pushed slightly above its April 20 high, but the message of the pattern is the same. Since the April 20 high, the NASDAQ is in wave B of the upward correction. We had been counting subwave 'a' of B as an impulse wave, which implied that subwave 'c' of B would also be an impulse, to complete a 5-3-5 zigzag correction (see EWP, p.41). But like the S&P, the inability of the index to break down below last Friday's low, and the market's behavior prior to recent Fed meetings, suggest we need to look at other interpretations. Above I have published an updated look at the NASDAQ 100. It appears that the NASDAQ has traced out a triangle pattern similar to the S&P, but in this case it is a contracting triangle for wave B. Price action since April 20 has been moving sideways between two converging trendlines, the definition of a triangle. And all the legs of the triangle subdivide into nice"threes" (except for subwave 'a'), which is also a requirement for a triangle. Subwave 'e' bottomed at the 50% retracement of the net distance traveled of the triangle. More importantly, 'e' waves often are accompanied by some news event that temporarily shakes the market and appears as a"dramatic kickoff of a new downtrend after a top has been built". Last night's earnings announcement by Cisco (the first quarterly loss ever) is the perfect backdrop to see wave 'e' bottom.
If our labeling is accurate, the NASDAQ 100 should thrust sharply higher in Minor wave C in the coming days. Pushing above key near-term resistance of 1980.13 in the 100 cash and 2232 in the Composite will announce that this thrust up is underway. First resistance in the 100 cash is 2228-2253.50 and in the Composite, 2400-2500. There is higher potential if these areas are overcome. However, if the NASDAQ 100 comes under 1810.86 at any time (subwave 'b' low), then the triangle count is negated and prices are back to our original interpretation. That interpretation considers another five wave decline underway to complete Minor wave B of the larger A-B-C upward correction (see Monday's Update in our Archive section above). The equivalent key support level in the Composite is 2089.
The near-term pattern in the [Dow Jones Industrial Average] is less clear. It still looks as though the Dow needs a larger fourth wave correction to match up with the previous second wave correction from March 27 to April 4. None of the moves to date appear large enough for a fourth wave of this same degree. Yet if the S&P and NASDAQ do thrust up from their triangle patterns, the Dow is likely to participate in the rally to one degree or another. Because the pattern is open to different interpretations tonight, the best we can say for the next several days is that as long as the index holds above last Friday's 10673 low (May 4), we assume that prices will rally in sympathy with the other major stock indexes. The next resistance is near 11037, the trendline that connects the peaks of the January 2000 all-time high and the September 6, 2000 high. Prices are likely to pop above this line, but not sustain an advance above it, as this resistance should be formidable.
Another reason we suspect the market's ability is low to sustain a strong rally (besides the penchant to sell-off after recent rate cuts) is because bullish sentiment is pushing extremes. Sentiment is often used as a contrary technical indicator, so an extreme in bullish sentiment is in fact bearish. The 10-day Daily Sentiment Index of traders (MBH Commodity Advisors, PO Box 353 Winnetka, IL 60093) has pushed to 72.4% bulls, an overbought level that has often led to short-term declines, at the least. We discussed the Merrill Lynch"sell side" indicator on Monday and its historic bullish extreme. This tool is not for short-term timing, but it does provide context for the current environment. And today's latest release of the Investors Intelligence (914-632-0422) survey of newsletter writers shows 47.9% bulls and 37.2% bears. This keeps the weekly string intact of more bulls than bears, which we've shown in the monthly newsletter. It has now be 131 straight weeks where there have been more newsletter bulls than bears, a string that was last seen 28-years ago-in 1973.
If the Dow trades below 10673 then my call for another pop higher is wrong and the index is likely in the larger fourth wave decline that we discussed on Monday. Fibonacci support remains 10186-10377, the 50% and 38% retracement levels of the rally from the April 4 low.
The Japanese Nikkei 225-Stock Average has fallen 370 points from Monday's close, in line with our near-term outlook. We turned bullish on the Nikkei at 13010 low of April 16 (basis the June contract) in anticipation of the current rally leg. As our chart illustrates, the decline from Monday's high has traced out three waves so far, a corrective structure. Both down legs are nearly equal in length, typical of a correction. Moreover, prices bottomed yesterday near the 50% retracement of the five-wave advance from 13395 on April 23 (basis June), a"normal" correction level. So the weight of the near-term evidence suggests that as long as the June contract does not break yesterday's 13940 low, the contract should rally back to new recovery highs (above 14585). The next resistance area is 14940-15300. If yesterday's 13940 low is breached, then the current near-term sell-off will turn into five-waves, which implies that the one larger trend has turned lower. So the Elliott wave pattern allows us to further tighten our"stop" level for our bullish outlook up to one tick below yesterday's 13940 low. We remain bullish against this level. If"stopped" out we will accept our gains and look for the next opportunity.
[June Bonds] remain on track with our near-term forecast. To review: Prices completed wave A of (2) at Friday's 103^09 high. Wave B down bottomed today at 101^11, in the middle of our cited support target. Underway now is wave C up that should carry prices to a new recovery high (above 103^09) into at least early next week, possibly the week after. This rally should trace out five small waves and complete Intermediate wave (2). Resistance targets for the end of this rally are 103^20 to 103^26, with a stronger target at 104^05 to 104^21. This latter area includes a chart gap, the 62% retracement of wave (1) and the point where there will be two equal legs up in wave (2). The 78.6% retracement of wave (1) should mark the maximum rally potential for wave (2). That resistance is 105^22. So the trend for bond prices is up for the next several days, at least. A break of today's 101^11 low would instead mean that wave (2) was tracing out a more complex corrective pattern. Only a break of 99^31 would negate the above scenario and suggest wave (3) down was already underway.
Our analysis for the [U.S. Dollar Index] remains unchanged. REPEAT: 117.56 resistance (Apr. 18 high) remains intact and prices have yet to achieve the weekly support target of 110.80-112, so the trend remains down. This decline is Minor wave C of an Intermediate wave (4) contracting triangle that started at 119.07 (Oct. 23).
The [XAU] punched through 57.42 key resistance soon after this morning's open, turning us near-term bullish the index. Today's high of 60.19 remains shy of our cited resistance zone of 61.13-63.25, so odds are the rally is not over. Given today's sharp rise, a near-term pullback is possible. But prices should hold support of 57-58 before rallying to a new recovery high and into our resistance. The Elliott wave pattern of the rise from 41.61 (Oct. 25) is open to various interpretations, so placing highly confident wave labels on a chart at this time is not possible. But as long as the index remains above 55, the near-term trend should be up.
[June Gold] had a strong pop higher today, which carried prices to a close of $270.40. Let me reiterate that the rally from $255.80 (Apr. 2 low) is choppy and overlapping, much more typical of a corrective move than an impulse wave. Moreover, bullish sentiment has quickly embraced this push up even though prices remain below the March 12 high. Market Vanes Bullish Consensus (www.marketvane.net) has pushed to 36, with a 52-week range of 13 to 38. This makes the rally's upside potential suspect. However, notice on our chart that prices were able close above a trendline drawn connecting the spike peaks of October 5, 1999 and February 7, 2000. This trendline has contained prices for 18-months and the ability to close above it must be graded a positive for gold. My 4-year old nephew could draw this line and see the close above it, so I assume a lot of armchair technicians are doing the same. Since open interest is the lowest it's been since March 1993, it won't take much to squeeze the shorts in this market. And the breakout in gold and silver stocks has to pump up the hard money crowd. The real key to establishing a new uptrend on a near-term basis is the $274.80 high of March 12 (basis June). As our chart illustrates, since October 1999, each successive swing has recorded a lower high and lower low, defining gold's trend as down. A close above $274.80 would break this pattern and be a strong sign that the short-term character of market behavior has changed. This type of price action would open the door for a push to the next resistance area of $287-$300. Failure to punch through $274.80 would relegate the bullion back to its bear trend.
[July Silver] also experienced a strong push up today. Still, it would take a rally that carries above 452.5 (Apr. 24 high) to signal that a more complex upward correction was tracing out. Until then, the larger downtrend remains the dominant force.
Next Update: Friday, May 11, 2001.
Steven Hochberg, Editor
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