gem-x's Elliott Wave Forecast: Feb 8 '02, Listen to me PPT.
Man, if only the PPT didn't pump up the futures in the morning...
If you don't know what I'm talking about, the "PPT" or the "Plunge Protection Team" is speculated to be a group of higher ups, including Fed governers, big guns from a few major institutions, and even the President...the PPT uses futures contracts, specifically S&P Future contracts, and a times, NASDAQ Futures contracts to attempt to prop or even drop the market up or down during crucial points, be it at important tests of support levels, heights of exhuberence or times of crisis. I've seen them a few times during the time I've been trading, during the entire week of Sept 17-21, during the top in January, around March-April 2000 when the NASDAQ and DOW both plunged 550 points a piece in one day, Jan 2001 when the NASDAQ dropped to 2251, last November, when the NASDAQ dropped to 1783 when a plane crashed in New York (not the WTC)...I can name quite a few more times, but the point is, there's an "unseen" force that's out there to protect the market and even manipulate it. Whe
When you hear rumors during the day about sudden violent moves up or down as a result of large orders of S & P Futures contracts, you MUST pay attention. I mentioned this very fact in my first e-mail post-SI suspension....when the NASDAQ got to 2099 in early January, there was sudden violent drop when it got there....it was a result of large sell orders of S&P and NASDAQ Futures contracts.
Here's why I mention it:
The Fed or PPT was trying to induce a correction in early Jan, and now they've gotten it....now they're struggling to reverse it.
The last time the "PPT" manipulated the market was early Jan, here's the result:
Here's my last post on SI, around Jan 10-11, NASDAQ at 2057, DOW at 10150 SPX at 1158 ERTS 58 THQI 51 ...during Greenspan's first speech in Jan:
From Jan 10 (this was orginally sent/posted that Thursday): "This could be the start of Wave 2 on all three indexes, targeting 9100-9400 on the DOW, 980-1080 on the SPX and 1659-1823 on the NASDAQ. I hate to sound bearish like this, but the last times I remember the markets dropping like this as a result of index futures, like the QQQ Jan 40's and S & P Futures contracts, being dumped were back in March 2000 at the top at 5133 and late May 2001 when the NASDAQ was at 2328....Also, what's pretty bizarre too, as that the top of 5133 and 2328 both coincided with bonehead anti-business attacks by democrats...(Daschle a couple days ago)"
"Also, if you look at the charts of ERTS and THQI...
THQI, if you look at the 3 year chart hit it's 5 of 5 in December, very textbook move, and is dropping very hard. From $8.00 in April 2000, to $65.00 in December, which means it's got a long way down. .382 retracement of the entire wave is 43-44 , .500, 36-37, and 29-30 is the .618 retracement. "5 of 5's" are a short's dream, and that's what THQI has had. It's gotta hold 43-44 in the next few days, or it's gonna visit the 30's.. (Date posted: $50-$51 a share now as low as $36)
ERTS has a more bearish chart...it's had a "leading diagonal", or a "rising wedge" from $25 in April 2000 to $67+ in Dec 2001...rising wedges usually retrace to the starting point of it's intial move...which is $25.00. Pretty textbook, 3-3-3-3-3, A-B-C-D-E. (Date posted: $58, dropped to as low as $50)
..................................
The past few days have screamed of PPT........the reversal on the day of the Fed meeting, and now during the drop we've seen from 1942 to 1782.
We've had a few days of weak futures during the night session, than morning reversals...the market opens, fades, than out of the blue it rallies sharply around 10-11AM (about the time the Fed starts injecting repos)....by 2-3PM they start realizing that their pumping isn't having a very good effect...so at exactly 3PM in the past few days, the PPT gives up their work for the day, and sells all those S&P and NASDAQ contracts, thus the large drops we've seen....they're trying to support the market at percieved retracement levels, and when the rally attempt fails, they sell, and the next day reload and try again.
There's nothing wrong with what they're doing, it's just that they're doing it at the wrong time. The best time for them to PPT the market is to have an ugly morning with capitulation, high VIX and high put/call ratios, and than start their work...the more they pump in the morning, the more potential for complacency to take over and yet another fade and failed PPT attempt.
This morning, "they" lifted the NASDAQ Futures up when they were down close to 27 points, as a result of the CSCO profit taking drop.
If the PPT didn't meddle with the futures this morning, we could have gotten that real washout day...the put/call ratios would have spiked up huge, as well as the VIX, had the NASDAQ opened down 30 or more points. It could have been the "gap down, crap down" morning star hammer on heavy volume.
But instead, the PPT were fighting all day trying to prop the market up...this brought about more complacency, which is something we sure don't need right now.
The wave counts, as a result of their liquidity injections have gotten pretty odd.....what I see right now, is 2099 to 1879 as Wave A in a zigzag, 1879 to 1959, for three-four days, as a Wave B, and right now it's Wave C, should it conform to a typical zigzag, be equal length to Wave A, which was 220 points.
This is where I got my target of 1739....1959 - 220 = 1739, around the .500 Fibonacci retracement level.
So what I see right now in the "Wave C" is this:
1959 to 1852 = Wave 1
1852 to 1942 (.78 retrace) Wave 2
1942 to 1768(?...if it's 1.618 of Wave 1) = Wave 3
If the NASDAQ drops to 1768 than rallies tomorrow, this would be Wave 4, to about 1835-1845, than Wave 5 down, equal length to Wave 1, to 1739-1745
This would be a textbook zigzag, of equality in the A and C waves.
Another scenario I'm looking at, which is much less likely, but could be unfolding, is an ending diagonal on the 5th wave down, to about 1768-1782, than the real rally...
The correction originally had a picture perfect expanded flat, but may have turned into a "double three" as a result of the expanded flat failing to reach it's intended retracement target.
So, it could also be an ABCXABC double three correction, with a flat from 2066 to 1918, and X wave from 1918 to 2099, and a zigzag retracing to the intended .500/.618 targets of 1743 or as low as 1659.
WE NEED AN UGLY DROP TOMORROW RIGHT OUT OF THE BAT...NOT A GAP UP AND FADE, BUT A GAP DOWN "AND CRAP" MORNING STAR HAMMER TO INDUCE MAX FEAR!
I wonder what the PPT plans on doing tomorrow....maybe somehow (I completely doubt it) the PPT will get hold of this e-mail...
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