Dow put on 203 points on Monday and the form looks like a 9-waves (III) at this moment. Robert Prechter is thinking of a big wave C as shown above but Larry Kudlow is talking about an up trend for a few more months. I think these two opposite opinions are to stay for a while until Dow breaks either the upper or lower resistance line.
I myself don't really feel comfortable with Dow when trading volume is concerned. Yesterday big green candlestick came with a volume of only 4.7 billions whereas the previous week down volumes were 6 to 7 billions. Sign of distribution. If this is the wave 9 and it is forming a double tops, I am going to run for my life.
Even though Dow has been hovering around 2009's top and set a new 2009's height yesterday, but other world bourses were a step lower.
FTSE, DAX, CAC 40 and Australian All Ordinaries have already formed their respective wave (III). At best they are forming wave (IV) and at worst is the major wave C scenario mentioned by Robert Prechter.
Hang Seng and Singapore are still able to hold like Dow.
Nikkei and Seoul are more bearish. If they can hold at the current level and can move up from here, then it is wave (IV) and there is still an up trend (V) in front, this is Larry Kudlow's expectation. But if they can not hold at current level, the down trend is going to be too big for (IV), we will likely to get Robert Prechter's Major wave C. Be careful. The big question here is "are the rest going to follow Nikkei and Seoul ?"
2 comments:
Chan, is it correct to say that Elliot wave theory works well on one pre-requisite i.e. free market condition. NOw with the interference of US govt with stimulus packages and various measures to support wall street, what is your comment regarding the interpretation of Dow chart under such circumstances?
Government interference has to be considered as one of the element affecting the mass behaviour of investors/speculators. Government interference is always there. Their economic policy, interest rate control,currency support, bond issue, trade and tax policy, war ....... I am looking for some reversal pattern. So far I noticed volume, OBV and net new high divergences.
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