Guest Posted October 15, 2003 Report Posted October 15, 2003 Hello folks, This morning Oyster's commentary was quite extensive - so much, in fact, that he ran out of time and was cut short at the most interesting (for me) part - when talking about the outlook for gold. Let's see what I can remember... First, he talked about the SPX - quite a lot, too. Said that the index remains above its 40-week EMA but below its 200-week EMA. According to him, this means that the intermediate-term trend is up but the long-term trend is still down. Mentioned that the index is only marginally higher than its June 17 highs - I'm not sure what this is supposed to mean, besides the real highs were in July (slightly higher than those in June; see the next chart). Said that he does not expect the index to exceed the 1050-1068 area defined by the 200-week EMA and the 61.8% Fibonacci retracement between the all-time high and the October 2002 low (sorry, got the Fibbo retracements reversed on the chart below). I personally would widen this range a bit to 1052-1083, in order to cover the real value of the 200-week EMA and the important March 2001 low. Also said that momentum is decreasing - that the index is making higher highs on lower and lower momentum. Did not show any indicator on the chart demonstrating this, so I have improvised a bit, trying to demonstrate it with a ROC (which is a momentum indicator) - although I don't know the exact settings that he uses. Still, it's visible well enough. Remember, similar negative divergencies in momentum recently preceded the sharp sell-off in gold (that's from me, not from him).
Guest Posted October 15, 2003 Report Posted October 15, 2003 On the daily SPX chart, he showed the following Elliott Wave count. Said that he still believes that this is an ABC correction. Noted that the overlapping waves at the end indicate that this is not an impulsive wave and that, most likely, we're having an ending triangle. The negative divergence of the momentum (again, the indicator is added by me; it wasn't on his chart) is typical for this e-wave picture. The anchor reminded him that the last week he said that if we go above 1040, he would be proven wrong. Oyster didn't answer this directly, just noted that 1040 remains an important pivot and that a fall below that could indicate a trend change to the downside. Said that the index could remain range-bound for a long time - with 965 being the lower end of the range - but that in the short term such a drop would feel like a sell-off. Said that the cycle seems to have inverted, suggesting that we're entering a consolidation phase. I couldn't make any sense of that, sorry. Perhaps some cycle guru could comment on it? Said that he expects the sell-off to be triggered by a spike of the interest rate of the 10-year bond. Noted that many think that a sell-off in bonds will be bullish for the stock market (because the money will move there, V.B.) - but that he disagrees that this time this will be the case. Has the feeling that this spike could be caused the the falling dollar. (I personally think that the dollar is overdue for at least a small Dover Sole bounce.) In any case, he expects at least some kind of correction (yeah, this rally doesn't make sense to me, either) - e.g., to the 200-day EMA or a 38.2% retracement from the top, whereever it happens to be. Didn't show it clearly on the chart, but I understood it to be to somewhere in the 960-965 area. Again, I have added a (daily this time) ROC to the chart, to show that the higher highs of the price are made with less and less momentum - a point, which he stressed several times (although without illustrating it with a chart).
Guest Posted October 15, 2003 Report Posted October 15, 2003 Next, came a monthly commodity chart. He said that it was from '97, but when I looked at the pattern of it, I think that he meant from '87 - because the pattern of the chart from this period matches closely what he displayed. He trotted something about the price of soybeans, which I didn't remember, because I'm not interested in them. The chart shows his Elliott Wave count on this index. He believes that it is entereing what every Elliottician dreams of - wave 3 of 3. (Well, he didn't say it in these words, of course - just that it is starting a third wave of an impulse up.) Said that the area around 250 is important resistance and that the index is on the verge of a breakout and has possibly broken out already (depending on whether you consider the horizontal or the downslopping channel, I presume - he didn't comment on these channels).
Guest Posted October 15, 2003 Report Posted October 15, 2003 Finally, he started talking about gold. Unfortunately, at this point he was running out of time, so he sped it up, and the anchor cut him short anyway, so I couldn't grasp and remember much. Basically, there was just an Elliott Wave chart of gold. I have tried to reproduce it below, but there is no guarantee that I have remembered it correctly. The essence of his comment was that he thinks that gold is going higher. I disagree. The above e-wave count tells me that we're entering wave 4 down. It won't be until the next year that wave 5 (up, to new highs) will start. And that's only if the alternate count in blue is not the real one; if it is, then the bull run is over. Perhaps a more experienced Elliottician than me could comment on this. That's all that I remember from his presentation, I'm afraid... Regards, Vesselin
Captain's Log Posted October 15, 2003 Report Posted October 15, 2003 Bontchev : Excellent summary. I feel like I watched it myself through your eyes. You should have your own film : Being John Bontchevich
Hiding Bear Posted October 15, 2003 Report Posted October 15, 2003 Tanks much. Great job. Would you say then that Oyster thinks the a move above 1040 but contained below 1058 is not significant?
BeerMarket Posted October 15, 2003 Report Posted October 15, 2003 Vesselin, Many, many tanks - for passing on and illustrating Oy's points so well, and for your own thoughts. All the work is very much appreciated!
Bearman Posted October 15, 2003 Report Posted October 15, 2003 Bontchev Tanks I need all the help I can get
Jimi Posted October 15, 2003 Report Posted October 15, 2003 Much appreciated, Mr. Dr. Bontchev. Profoundly clueless, Jimi
OldMan Posted October 15, 2003 Report Posted October 15, 2003 Vesselin, Thanks a lot for the excellent summary. Very much appreciated here. OldMan
phatbubble Posted October 15, 2003 Report Posted October 15, 2003 thanks once again VB - excellent detail. very much appreciated.
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