Daily Stock Market Update – SELL – 09/09/11 © ™

DAILY UPDATE FOLLOWS THE BREAK

PDF FILE

WAVE COUNTS SIMPLIFIED

  • There are 3 peaks to a completed wave count. A reversal of trend takes place after a completed wave count.   Often times it’s as simple as counting 3 bumps on a chart . . . Other times, not so easy.
  • In a downtrend the same rules apply except you are counting 3 valleys instead of 3 peaks.
  • Each step must stay confined to a channel.  Laying a pen or pencil on the chart will help you visualize the channel.
  • As the trend progresses, all of the steps that make up the overall current trend will also be confined to a larger channel.
  • When the market breaks a channel (regardless of the perceived wave count), the current step has been terminated.
  • A single wave may sub-divide into another 3 waves.  I will also call this an extension.  When this happens (1) the trend is still intact, (2) the channel has widened and (3) instead of a total of 3 steps, there will be 5 steps.  (The charts will help you understand this concept.)
  • Sometimes I will use the terms step and wave interchangeably, but usually a wave is considered to be larger than a step.
  • Wave Counts In Charts – Numbers of the same color represent steps within the same wave.  For instance, red 1, red 2 and red 3 are steps within the same wave.  Different colored numbers represent steps in totally separate waves.  For instance, a red 1 occurs in one wave while a blue 1 occurs in a totally separate wave (refer to charts for examples).
  • Reading the glossary helps a great deal in the understanding of this blog.
  • Glossary Link

ABBREVIATIONS

  • DJI = Dow Jones Industrials; SPX = SP 500; ES = SP 500 Futures; COMPQ = Nasdaq Composite Index; TNX = Toronto Stock Exchange (blue chips); NYSE = New York Stock Exchange

CHARTS

MY CHART LINK (updated constantly)

  • This link has my charts, which are always current and constantly updated during market trading.  They don’t lag market trading by 15 minutes which is true of many charts.
  • There are 9 pages of index charts.  Each page consists of (1) the same stock market indexes, and (2) the same time frame.  The time represented by each vertical bar is the same on each page but increases in length on each succeeding page.  The vertical bars on the 9 pages ranges from 1 minute to 1 month.
  • The final pages of these charts consists of growth stocks.  These are stocks that have constantly risen in price since 1990.  One qualification is that they must not be severely damaged in a bear market so they can’t rise to significant new highs in the following bull market.
  • The growth stocks show daily market action for the last 3 years and weekly prices since 1990.  This gives a good perspective to how they have behaved in the immediate past (daily charts) and how they behaved during good and bad times (weekly charts).

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DAILY UPDATE

CLICK ON CHARTS TO ENLARGE

  • Short Term
  • Uptrend Questionable
  • August 9, 2011 To Present
  • Multiple Bottoms Dating From August 9th
  • Last Action Status – Sell Signal On September 9th

Yesterday afternoon San Diego County had a cascading system failure of it’s electrical utility.  Power did not come back on until the middle of the night.  That was much quicker than what we had been told.  We had initially been told the power wouldn’t be on for 24 hours.  With no power there was no internet and consequently no update of the blog.

Beginning yesterday we had an upside failure that I alluded to in my last blog.  The downside action seems to be much more than anticipated.   Today’s continued decline caused me to be stopped out of my position.  I am forced to step aside and watch what happens next.

09-09-11 DJI 5 MIN BARS

I think that the lows of August 9th have a chance of being penetrated on this decline.  If it holds in the neighborhood of August 9th, there won’t be any serious damage done but a waterfall decline will be another thing.

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