I haven’t been posting much the past few weeks as I find myself doing battle once again with an old foe … kidney stones! However as they say, life goes on and so do the markets. So I thought I would do a quick update on some of the charts I posted the other week. Before I do that though I want to first tip my hat to Lars who recognized and alerted the community to a “Special situation” in the market before the big break occurred.

   I posted 5 charts but one was an Elliot Wave workup that simply showed the market moving in a #3 rally. The other 4 charts dealt directly with support and resistance levels. Of those 4 let’s deal with the 2 that missed the mark first. While I have a lot of faith in the price modulation concept it simply failed this time around. After rerunning the utility program that I use to find the proper modulation I found that it had changed. This of course is its short coming; you never really know when it will change until after the fact. This is why I always use it in concert with other methods and techniques and never by itself. The updated modulation is posted below for those who are interested.

    Next up is a favorite of mine, GPL, or what I again named so modestly, “Gerbino Parallel Lines. “ I did a post with an explanation on the technique a while back. (The original post can be found here: http://forum.wave59.com/idealbb/view.asp?topicID=4080 ) Since that time I have made some changes to it and had planned on doing a post a few weeks back. However I kept postponing it because of time issues and then Barrie did his webinar on his Five Point Pattern which I believe deals with parallel lines.  So in deference to him (and to a certain extent the stones) I shelved the post for a while though I will get back to it soon. Ok, so what went wrong? It was a very tricky pattern because of the steep slope. I simply used the wrong pivot points in its plot. When I do the post on the updated technique I will use the second chart below as an example to what I am talking about.

    So what is it that worked? Namely the two techniques that I have the most confidence in, the G_Box and GREG. The G_Box is not named for Gann (as I’m sure you already suspectJ) but is certainly based on his work. In truth it is nothing but a variation of the Gann box but how it differs and how it’s computed is something I choose not to get into. I will only say that it is based in part on my belief of how time, space, and price all interact. We all talk about squaring price and time, but what of space? Or better put, space time. Is it linear or is it curved? Anyhow as you can see it did a nice job of catching the initial low. (Third chart)

    The final chart is the monthly GREG. It too does a nice job of collaring the initial low off the drop. It should be noted that that both the G_Box and GREG charts have been off about 30 cents this week. All in all I’ll take it. I have written about GREG extensively and anyone who wants to give it a shot just needs to do a search of the board and that should get them started.

    So where do we go from here. I still haven’t done a full comprehensive workup on the market so can only speak in generalities. All my daily stuff is negative, weekly’s still pos. but barely. It’s obvious that the market is getting support at the 50% retracement level of the weekly #3. (Pretty simple after all the boxes and lines J) I believe the market is in a #4 correction that could easily last until late fall. How this correction develops will tell a lot about whether the market can make new highs into 2012 or if the eventual rally will fail. Given the severity of the initial drop I believe it is doubtful the market will make new highs anytime soon. Though at this point it is still possible. Again, it all depends on how the market corrects. I have weekly fractals that are pointing to the first and second week of July as significant, and monthly fractals showing up in September ’11 and January ’12. I haven’t done much short term analysis other than some experimental cycle work that is pointing to 5/19/11 as a potential turn day. The key word here is experimental and since cycles are Lars’s turf I’ll leave that to him J.

    That’s about it for now. Will try and post more as time permits and of course if I have anything new to offer.

    Joe

 

ForJL314

ForJL314

ForJL314

ForJL314

Have been very busy the past few days but did want to do a quick follow up on the SI. The chart below is a daily GPL which thus far is showing good price containment.

    Joe

ForJL314