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Showing posts with label BRK. Show all posts
Showing posts with label BRK. Show all posts

Monday, September 15, 2014

BRK Vs SPX (Where Buffett goes so does the SPX) Update

This is an update to my prior update http://wavepatterntraders.blogspot.com/2014/01/brk-vs-spx-where-buffett-goes-so-does.html

Initially i thought we may have a potential peak in Jan of this year for this stock , thus i was going on the basis of a potential peak for the SPX. However seeing as the SPX has continued to push higher, its inevitable that BRK was going to follow higher. As you can see essentially BRK is the SPX (or vice vera).

However having followed the SPX higher for the last few months i though it would be a good time to review BRK and see if it offers a clue to the direction of the SPX. I can make the case (well for the bullish case anyhow) that its close to ending wave [3] and a potential decline for wave [4] is close by. If the SPX pulls back in wave [4] we should see BRK pull back in sync,I estimate around 110 can be seen,  there are enough gyrations to warrant caution now for the bulls.

Both the SPX and BRK have met a 1.618 fibbo extenion which is a common area for a 3rd wave

Saturday, January 11, 2014

BRK Vs SPX (Where Buffett goes so does the SPX)

The title says it all.

I am not sure who leads who but the one thing i want to point out is that BRK is basically the SPX, well it has been from the 2009 lows.

If you overlay both markets you can clearly see that.

So that brings me to the point of the post.

If you look at BRK it appears to have failed to push to a new high, i was actually expecting it to move higher in alignment with the SPX moving towards 1850SPX, but we may have a truncation in place.

The prior price action appears to be a small triangle, which i suspect is in the position of a 4th wave in a 5 wave sequence from the 2011 lows. If BRK has just truncated, and we see more weakness, then it should not be long before the SPX follows based on the correlation.

My primary idea is this is a simple 3 wave bounce from 2009 as shown in black, my alternative idea is that the high we just saw is wave [3]. So i am still expecting a pullback towards $100 (BRK.B) if the idea in blue.

If BRK pulls back then by default the SPX should/will pullback.

Seeing $100 on BRK.B is around 15%. So if we slice 15% off the SPX that's around 1550-1570 SPX which is the target i would be expecting for my alternative idea on the SPX (not shown).

Until next time,

Have a profitable week ahead.