Is The Stock Market Topping With A Domino Process?
Robert H Anderson | Apr 27, 2015 05:40AM ET
The bull proved he is still alive and charging to the upside. The S&P 500 & the NYSE hit new highs again last week. The Nasdaq and Nasdaq 100 want to reach their all time highs, before the "tech wreck" of 2000.
Maybe this bull market won't be over until the Nasdaq reaches its all time high of 5132. That's only about +32 points from Friday's intraday high of 5100. But if it heads down from here, it could be a sign of weakness.
This bull has to be getting "very" tired and why did the Dow top out last March and how about the transports, they topped out way back at the end of November - 2014.
Something is going on here! It's like indexes are topping out one at a time, "kind of like dominoes". First the leader, the Transports, then the Dow in March, and now the S&P 500 & the Nyse in April. The last man (index) standing is the NASDAQ.
It's like the bull market is dying a slow death. What is also interesting is that if you look at a weekly chart of the leader, the Transports, I can count 5 sub waves down, then 3 sub waves up takes us to March. That is when the Dow tops out.
Since March the Transports and the Dow both show a wave down followed by an A/B/C correction that takes us to Friday. The pattern that started in March is called an Elliott Wave 3 (EW3) and we have completed the EW1 down and the EW2 up.
The next thing that Elliott Wave says will happen is we process an EW3 down. EW3s are known for their power up or down. If this turns out to be another strong EW3 down, it might be the bear telling us that he's actually been here since November of 2014.
Based on the above information, I will be looking for a top to this current EW2, so I can start my EW3 down. The Nasdaq might be the "key" with its desire to break its all time high of 5132, so I will be watching closely. Also if we get a big down day, that could add "confirmation" to the new EW3 starting.
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