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Intraday Flash: NYA



Note: the following analysis is formulated as an assimilation of Fibonacci, DeMark, Elliott Wave and other technical indicators. It is offered as education and not intended as advice in any way.

We're updating our note on the NYSE index (NYA ticker, NYC ticker for the ETF). Our last note suggested that the 7318 peak was likely the start of a larger bearish decline because we were able to count a clean "5" waves into both a good Fibonacci time and price target and because the NYA had declined 150 bps after tagging that 7320 area. Unfortunately, that interpretation was wrong and stops at 7317 were elected. The decline from the 7318 peak was a "3" wave move - a corrective, counter-trend move - implying that the next Fibonacci target we had identified in our original note of 7410-7460 is now operative.

The short term interpretation of prices is open to several acceptable interpretations making a high confidence short term analysis (about how the NYA will approach the 7410-7460 area) difficult. That said, we want to be perfectly clear about what the longer term interpretation is: it remains very bearish. The fact that the 7323 area did not turn back prices impulsively only changes the interpretation of the pattern off the lows from January 24th, it does not change the bearish interpretation that the bounce from August 2004, March 2003, and October 2002 is nearing completion. What this means from a trading perspective is patience. Tops are processes, not discreet events. As such, we can expect a choppy advance in the NYA to make the short term wave interpretation difficult.

We will simply keep the proper perspective that the longer term trends remain highly favorable for a meaningful decline in this index. Therefore, the near term picture remains cloudy at this time until we get a higher confidence analysis on the short term wave pattern OR we get a clear, 5 wave impulsive decline from whatever peak is struck over the next days or weeks of trading.

No positions in stocks mentioned.

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