EEM emerging markets ETF

EEM came up in one of my scans as a short term buying opportunity.

Longer term, it looks like its bear market has already resumed.  The monthly chart shows a likely completed second wave of primary degree. 

Shorter term, it is likely taking a break, before completing a fifth wave of at least minute degree.  This move higher should ultimately turn into an impulse wave, though the 30min chart shows only a-b-c waves so far.  This could be a leading diagonal first wave, of ((c)).  Diagonals are really hard to confirm until they are mostly or entirely complete, at least in my opinion.   Therefore, I'm comfortable waiting to see more of this short term wave structure develop while I decide whether I want to play the upside.  It may simply be easier to wait for my target on the daily and play the downside from there.

Natural Gas

I got stopped out of a long natural gas play last week, and it's easy to see why.  The fifth wave on the daily chart has now extended twice (4H chart).  Regardless, it seems very close to both a short term, and long term bottom.

If the count I have on the daily chart is accurate, then the furthest the fifth wave can go is 1.687 on /NG, as the third wave can never be the shortest in a five wave impulse.

Mr Softy

I was discussing MSFT last night with some friends, so I decided to put together an overview.

None of the corrections going back to the 2000 tech crash are in five waves, so the downside is unfolding in corrective mode, and the correction appears to be complex, ((W))-((X))-((Y))-((X))-((Z)).   Similarly, not of the upside rallies including this recent one, are unfolding in five waves.  Therefore, new lows are expected.My primary count is on the chart, and after ((Z)) is complete, a new bull market should unfold.

An alternate count, not shown, has this entire correction going back to 2000 as a diagonal A-wave of one higher degree, which would be labeled ((i))-((ii))-((iii))-((iv))-((v)) each composed of the component a-b-c subwaves shown.  The difference between the two labels is subtle, as they are both composed of a-b-c component waves, but the implications are different.  The former is the end of a correction, and the latter is merely the beginning of one.

To know which count will ultimately be correct, we will need to watch the ensuing rally and determine whether it is unfolding in impulsive (new bull market) or corrective (a B-Wave)  mode.

My preferred count (which seems bearish enough, frankly) is shown on the chart, along with tentative downside targets based on the fibonacci relationships to ((W)) and ((W))-((Y)).

In any case, before the correction begins, we need to complete c up on the monthly,  (5) up on the weekly, and 5 up on the daily.

AAPL

Someone asked me to put together a labeled Elliott Wave chart of AAPL on the daily time frame.

I'm often asked, where do you begin labeling from?  The answer is a major price extreme.

I went ahead and started with the monthly so I can get some context.  As you will see, it actually saves work later, as there are far less waves needing to count on the smaller time frames.

One thing I want to mention first to eliminate any confusion.   The small yellow numeric labels on the chart were generated by a script, as are the black wave lines.  Sometimes they are right, but often I decide that the label is actually something else.  The point is, trust the hand-drawn labels.

As you can see above, there was a major low in 2009, so I decided to start labeling from that point forward.  When five waves up are finally completed on the monthly time frame at some point in the near future, then at the very least that entire five-wave structure will be corrected.   How big the ensuing correction ultimately will be depends on what part of the larger degree wave was completed.  I leave that as an exercise to the reader.

The weekly chart zooms in on the as-yet incomplete wave ((5)) on the monthly, starting from the bottom of ((4)) in August of 2011.  You can already see three waves on the monthly, but the weekly shows them in more detail.

Lastly, the daily chart zooms in on 5 of (3) on the weekly, beginning at the completion of 4 in early March.  You can also see more detail on the correction now in progress.  There is an A? marked at the end, as there really isn't enough detail on the daily to call that wave complete.  Going to a 4H, or 1H chart would make sense to see the progress of the wave (4) of ((5)) correction.

Notice on the daily chart how I was able to just start on 3/5 and plop a label 3 on there and work forward.  The work I did on the higher time frames allowed me to do that, and only focus on more recent price action.