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Apr 012014
 

Monthly Update on the Eleven-Quarter System by Sid (from ElliottWavePredictions.com and ElevenQuarterStocks.com)

During the month of March 2014, I decided to track the effectiveness of the 11-Qtr-System moving forward using two different portfolios.  One model portfolio will be named “The Non-Random Profits “Ideal System” Model Portfolio.  This portfolio will theoretically buy $2000 worth of each qualifying 11-Qtr-Stock at the earliest qualification, and will sell each holding at its 3-year anniversary from initial purchase date.  The intent of this portfolio is to forward-replicate as closely as possible the stock selection and holding period used in the 1936-1974 backtest in the original Non-Random Profits book.   The results of this new portfolio so far this year are quite impressive.  If an investor had started using the 11-Qtr-System on January 1 of this year, this portfolio would be holding 21 different stocks, and would be up 35.62% at the end of just one calendar quarter.

The second portfolio I will be tracking moving forward will be the same Investopedia Stock-Simulator based “Trading” portfolio I have shown on this site before.  I will be actively trading this portfolio, and will selectively buy stocks at or below the PP using a combination of the 11-Qtr-System, Elliott Wave and its Fibonacci price targets, Hurst cycle analysis, money management principles, and consideration of where the overall stock markets are likely to be in their intermediate-term cycles.  So far, this portfolio is up 7.1% YTD while the DJIA is down 0.7%.  This portfolio started the year with a $100,000 balance and no open positions.  It is currently sitting 69% in cash.

Sid
http://ElliottWavePredictions.com
http://ElevenQuarterStocks.com

 Posted by at 8:53 am
Mar 192014
 

SPLS weekly 3 19 141 1024x526 Elliott Wave and Hurst Cycle Analysis of Staples (SPLS) by Sid from ElliottWavePredictions.com & ElevenQuarterStocks.com

Elliott Wave and Hurst Cycle Analysis of Staples (ticker symbol:  SPLS) by Sid from ElliottWavePredictions.com & ElevenQuarterStocks.com.  Click on the chart twice to enlarge.

Despite the quick downward movement in the major stock market indices today, purportedly caused by announcements from Janet Yellen and the Fed, there continue to be technical signs of an imminent turn toward bullishness in certain individual stock issues.  Staples (ticker SPLS) is good example.

As the chart above shows, downward movement since the 2006 top is (or was) corrective.  Also, the August 2012 low appears to have been the conclusion of a clear 5-wave (wave C) impulse.  Since that low, upward movement counts nicely as a bullish leading expanding diagonal, where wave 3 was longer than 1, wave 4 was longer than 2, and wave 5 was longer than 3.  That diagonal was followed by a typical deep correction in 3 waves.

Additionally, Hurst cycle analysis on SPLS is projecting a significant cluster of cycle troughs due between January 19 and March 14, including the 19.7-week cycle.

So, Staples stock appears to be positioned nicely for a rally, and if the wave count shown is correct, is offering a low-risk, high-reward long opportunity, with invalidation just slightly below current price levels (at $10.56).  If downward movement continues just a bit further, wave C pink will equal wave A pink times a very typical 1.618 at $10.88.  Upward price targets are shown on the chart, but recent On-Balance Volume readings are suggesting that the eventual price will reach the area of the upper targets, in the mid-to-upper-twenties range.

Believe it or not, there are a number of other stocks that appear, from a technical perspective, to be putting in significant bottoms.  This is due to the fact that there are always a select number of individual issues that are “running” within a completely independent 9-year cycle from the major indices. For more information, check my sister website:  http://ElevenQuarterStocks.com.

Sid
http://ElliottWavePredictions.com
http://ElevenQuarterStocks.com

Mar 012014
 

Model Portfolio Holdings EOM 2 28 14 blurred Monthly Report on the Eleven Quarter System (11 Qtr System) from Sid at ElevenQuarterStocks.com & ElliottWavePredictions.com

Here’s the monthly update on the Eleven-Quarter-System (11-Qtr-System) from Sid at ElevenQuarterStocks.com & ElliottWavePredictions.com.  The screenshot above is the February 28 end-of-day model-portfolio holdings.

With February now complete, our ElevenQuarterStocks.com model portfolio is up 7.6% YTD, while the DJIA is down 1.5%, the S&P-500 is up 0.75%, the Nasdaq (QQQ) is up is 3.2%, and the Russell 2000 is up 2.0%.  We started the model portfolio on January 1, 2014 with a cash balance of $100,000, and no open positions. (To review, at the end of January, the portfolio was up 4.9%).

The model portfolio has utilized no more than 40% of its available cash at any point so far, and is currently sitting 83% in cash.   The highest number of issues held in the portfolio was 20 (on Feb 10), and it is now holding 9.  The total number of different stocks it has owned since beginning of the year is 25,  so we have bought and sold 16 different stocks now, and each of those trades ended in profit.  If the ROI is figured based only on cash-placed-at-risk, it is currently 105% (annualized).

The 2014 11-Qtr-System model portfolio is being traded using the Stock Simulator at Investopedia.com  The “game” allows the investment long-only in stocks (only), with no margin, no shorting, and no options allowed.  A $9.95 commission per trade is figured in.  For the sake of simplicity, the idle cash is set to not collect interest.

Please note that in addition to the original “Ideal System”, as presented in the 1978 book “Non-Random Profits” by Hanson and Mann,  I’ve added a number of rules and guidelines to how I intend to trade the system, including the extensive utilization of Elliott Wave, its associated Fibonacci price targets, Hurst Cycle analysis, and several more key elements.  To find out more, subscribing is easy, and quite affordable.  All 11-Qtr-System subscribers receive notification as soon as any trade is initiated in the 11-Qtr-System model portfolio.

Sid

Feb 172014
 

EuroSTOXX50 weekly 2 17 142 1024x526 Elliott Wave Analysis of the Dow Jones Euro STOXX 50 by Sid from ElliottWavePredictions.com

EuroSTOXX50 daily 2 17 141 1024x526 Elliott Wave Analysis of the Dow Jones Euro STOXX 50 by Sid from ElliottWavePredictions.com

Elliott Wave Analysis of the Dow Jones Euro STOXX 50 by Sid from ElliottWavePredictions.com.  Click on the charts twice to enlarge.

If you aren’t familiar with the Dow Jones Euro STOXX 50 Index, it is essentially the European equivalent of the Dow Jones Industrial Average in the U.S. It consists of 50 select blue chip stocks across 12 Eurozone countries.

The technical situation for the EuroSTOXX50 is a bearish one. Here’s the evidence from the weekly chart:

  1. The recovery after the crash from June 2007 through March 2009 is choppy, overlapping, corrective, weak, and appears to have carved out three relatively equal waves.
  2. The rally from the September 2011 low has nearly reached length-equality with the initial rally off the March 2009 low (through January 2010), but has moved to the upside at a less aggressive angle.
  3. The weekly MACD has been showing divergence since the 4th quarter 2013 highs.
  4. Price is stalling just under a confluence of Fibonacci targets:  Primary (burgundy) Y would equal Primary W at 3207, Intermediate (black) C would equal intermediate A times 2 at 3199, and the 50% retracement of the entire 2007-2009 decline is at 3185.
  5. Internal wave structure from the Intermediate (black) wave B low in June 2012 appears to have completed, or nearly completed 5 waves up.

On the daily chart, while the January 15 high of 3178 may be the top, it is possible that wave 4 pink is incomplete, and is carving out a triangle.  These two potential scenarios are identical to the two waves counts discussed in the last post regarding the EUR/USD currency pair.

Hurst cycle analysis may be providing a clue as to which scenario to expect.  The next cycle low expected in EuroSTOXX50 is due on or near February 20.  This might be green wave 1, or could be the end of the pink wave 4 triangle.  Then, a 56.3-day cycle top is expected between February 25 and April 5.  In my opinion, March 7 is the highest probability target date for that cycle top, because March 7 has repeatedly appeared as the likely topping day in Hurst cycle analysis of several other correlated items I track.  If price moves aggressively upward into early March and makes new highs, it is likely a terminal thrust from the pink 4 triangle.  If upward movement is less aggressive, and cannot make a new high above the end of pink wave 2 (if it is complete), it could be a green wave 2, thereby forming a very bearish nested 1-2-1-2, with wave 3 of 3 to the downside coming next.

Regardless, if either of these wave counts are correct, the major stock indices are going to have lousy 2nd and 3rd quarters this year.  (Note that, according to my interpretation of longer Hurst cycles, there are significant clusters of cycle bottoms due in July, and again in Oct/Nov of this year). And, since European stocks, U.S. stocks, European currencies, and Gold seem to be moving in lock-step recently, (a developing sign of an “all-one-market” bearish condition), they are all likely to move to the downside together, unless the current correlations break apart.

Sid
http://ElliottWavePredictions.com

Feb 122014
 

EURUSD weekly 2 12 14 new idea3 1024x530 Elliott Wave Analysis of the EUR/USD Currency Pair by Sid from ElliottWavePredictions.com

Elliott Wave Analysis of the EUR/USD Currency Pair by Sid from ElliottWavePredictions.com.  Click on the chart twice to enlarge.

The “Teflon Euro” has stayed amazingly resilient for a full year now after the initial calls for the end of a multi-year triangle emerged in February 2013.  The above wave count shows that the Euro may have one more trick up its sleeve before finally succumbing to the likely downward thrust from that triangle.

Some  have given up on the triangle idea altogether, and others are looking for an eventual upward thrust from the over 5-year old triangle.  Of all of the interpretations, I still think that wave E of the triangle is either complete, (ending at the late December 1.3893 high), or, as this chart depicts, has yet to finish, with one more spectacular stop-hunt left in the tank as a diabolical parting gift for all the eager Euro bears.

The best reason for the existence of the wave count shown above is that wave D (black) of the triangle was “complex”.  It was a WXY double zigzag.  According to the blue book (Frost & Prechter), only one leg of a triangle can be “complex”, and if it is, its likely to be a double zigzag. Also, according to the book, the most likely leg of a triangle to be complex is the “D” wave.  The fact that the D wave (as labeled) is “complex” supports the expectation that when this 5+year-long triangle finally does conclude, the resulting large terminal thrust will be to the downside.

Also, since wave D (black) was complex, and only one leg of a triangle is allowed to be complex, wave E must be a standard (blue) ABC zigzag, subdividing 5-3-5.  This has been difficult for me to accept because the blue wave A (within black wave E) looks very much like a “three”, and the pink wave 4 within the blue wave C (underway now?) appears, upon first glance, to have potentially overlapped into the price territory of wave 1 (pink).  So admittedly, the forcing of the labels into the shown positions has been somewhat sickening, but there may be a development underway now that supports this count:  Wave 4 pink may be carving out a triangle.

This would be a very fitting ending scenario for the 5+year-old triangle, as the next fairly large move to occur would be a (pink 5) terminal thrust to the upside, taking out a metric butt-ton of stops. THEN, the much larger thrust to the downside would ensue. Traders would be ripped to shreds in both directions. Ultimately, this is what the “market” lives for: taking out stops . . and as many and as often as possible.

One last bit of supporting technical evidence for the above wave count is that it would allow Burgundy (Primary) wave “B” to retrace Burgundy wave “A” into the very most typical .5 to .618 Fibonacci retracement area (1.4173 – 14609).

I’m not saying this is my main count yet, but the price action in the British Pound, the Euro, the Swiss Franc, and the US$ Index in the past twenty-four hours is certainly suggesting it.  The next few days will be very important.  Any movement below 1.3205, and the pink 4 triangle idea is invalidated.  On the other hand, any movement above 1.3893, and obviously, the 5+year-old triangle isn’t over yet, and if the character of the upward movement is quite aggressive, the count shown here will become my main.

Sid

http://ElliottWavePredictions.com

Feb 012014
 

Here is the end-of-January comparison of the major U.S stock market indices vs. our Eleven-Quarter-System Model Portfolio (from Sid @ ElliottWavePredictions.com & ElevenQuarterStocks.com).

January is “in the books”, and the DJIA is down 5.27% YTD, the SPX is down 3.71%, the Nasdaq Composite is down 1.35%, and the Russell 2000 is down 2.53%. During the exact same period (starting Jan 2, 2014), our Eleven-Quarter-Stocks model portfolio is up 4.9%. Also, notice that the 11-Qtr-System model portfolio is sitting about 70% in cash, in keeping with our conservative trading plan for the first half of 2014.

In the model portfolio, we only go long on carefully selected individual stocks (based on our system), take profit strategically, and do not use margin. Our 2014 model portfolio was started on January 1 with a $100,000 balance and no open positions. Find out more at my ElevenQuarterStocks website.

Subscribers to the 11-Qtr-System will be given access (not-blurred) to which stocks we own in the model portfoilio, as well as which stocks we are very close to buying, price targets for those purchases (based on Elliott Wave and Hurst cycle analysis), take-profit targets on holdings that have broken-out to the upside, and which stocks will likely be new qualifiers over the coming quarters. Subscribers are also notified right away of each trade initiated in the model portfolio. The 11-Qtr-System Service, at least for now, is only $25 per month, and the first month is 1/2 price.

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Model Portfolio Holdings 1 31 14 blurred End of January Comparison of the S&P 500 vs. Our 11 Quarter System Model Portfolio (from Sid @ ElliottWavePredictions.com & ElevenQuarterStocks.com)

Sid
http://ElliottWavePredictions.com

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