TRADING FORECAST FOR THE RUSSELL 2000, S&P 500, DOW 30, WILSHIRE 5000
Below, I have 8 charts, 4 daily and 4 five minute. You’ll notice that the 4 daily charts have similar patterns but the different indexes are performing differently than others, why is this? Richard Russell who is a financial market newsletter icon and operates the DOW THEORY LETTERS. He says that the stock market tells a story in the charts and when you listen to all the noise in the world “media, talking heads, analysts ect.”, the markets tell you were investors are “putting their money where there mouth is”.
I have been hearing all kinds of stuff, market is going to go up, market is going to go down, some are just mixed up.
I have said it before on this blog that I think we are going to be looking at a sideways market similar to the 1970′s and the Junk Bond market from around 1992 till 1998 or so. The only thing is things are shaping up similar to the Junk Bond market of the 90′s and if you look at a chart of that market. Elliott Wave International is a great resource.
In the 1970′s the stock markets were in a wave 4 consolidation on it’s way to the final wave 5 which ended in the last decade, the Junk Bond consolidation was a wave B consolidation before it’s collapse. Corrective waves are always deceptive, they screw with investor’s minds but the patterns are always the same, it makes for an extremely frustrating trading forecast. When you look at the big picture, look at the patterns in place, we are in wave B for the financial markets.
I know that everyone loves the Dow 30 stocks because the balance sheets are in better shape than pretty much all the countries in the world and the dividends are better than treasuries but who is to say the market can’ t go sideways.
Any way, I could ramble on forever. All I know is according to my model, we are looking at a trend change today / tomorrow.
When you look at the 5 minute charts you can see the contracting triangles and according to the “Elliott Wave Principle” recommended reading page 51 “A triangle always aoccurs in a position prior to the final actionary wave in the pattern of one larger degree”. another way of putting it, the rally is coming to an end.