A PART OF NY A Macro View on the minutiae

Well the party at Damocles’ place continues.  Pass me another glass of beer and do not look at the sword.

It looks like the call that we are still in Primary 2 up was the right one.  As we said last night:

“It is either over or needs another push up to 1155 – 1160.”

It looks like the market needs to continue extending this fifth until the 1155 – 1160 mark.  Chart of the rally below, followed by a close up on the last few waves.

[Updated 9.14am 3/10 - Corrected a mistake in the Short term chart]

We are still in Primary 2 up – although in the final throes. 

The initial stock decline of 2010 was Phase 1; the current rally will take stocks up to or slightly through the Jan highs.  Then the more serious Phase 2 will begin; The Main stream media news will highlight the “buying opportunity”, the numbers will look great, it’s all fake – it’s all an illusion.

The current rally will absorb the first two weeks of March and possibly a few more, and then cede.  Greece, Spain, UK, Toyota, US States debt, health care, weather and inflation  come to mind for why it will end. 

By July/August the financial crises will again be prominent, with revolts and either financial (protectionism/defaults) or physical war almost likely.  Debt, taxation, and inflation are central.  Inflation likely to briefly spurt with  Oil  possibly to exceed $100/barrel this spring.  The powerlessness of those in power will come to the fore, and the pain of payment after overspending and underfunding real liabilities will be evident.

The charts are below.

Longer term chart

Short term Chart

I was reading Planet Yelnick this morning, where he references Kenny’s explanation of where we are in the EW structure.  Kenny (who is one of the better EW counters) thinks we might still be in the final throes of an Ending Diagonal of Primary 2 up.  

As they point out it does explain this last weird 5 wave rally:

This explains the unusual five wave rise, which is hard to count as an impulse:

• it has overlapping waves 2 and 4, not allowed in an impulse, ok in an ED
• it has a long wave 1, unusual in an impulse but ok in an ED
• it breaks as a series of “3s”, verboten in an impulse, expected in an ED
• it tracks declining volume, de-confirming an impulse but ok in an ED
• it comes in the final wave, as it must, if this truly ends P2

Kenny gives a target of Sp1159, but watch for a truncation.

This would also explain why minor wave 1 down of a Primary 3 was so small – Because we haven’t started Primary 3 yet.   It makes a lot of sense – I may need to do a recount (again!!!!).

Okay I feel a bit better about this one than many of my previous counts.  The rally from Feb 5 looks like a 5-3-5 Zig zag.   Now let us hope it does not turn out to be more complex.  Chart below: