This market is sitting under the sword of Damocles. It is happy gorging, laughing and partying and refuses to look up at the sword that is waiting to come crashing down. I think it will fall and it will fall this year. That over now to the charts…
First The SP500 Elliot Wave chart of the Entire Rally
Now a close up of the last waves (It is either over or needs another push up to 1155 – 1160).
Trading chart on the Russell 2000 (Continues to push against the top of the exhaustion Zone)
Trading Chart on the XRT (Continues to push against the top of the exhaustion Zone)
Long Term Dow Industrials
Short Term Dow Industrials (has tried 3 times to get back into the Bear Channel – 4th Time should be the treat)
Long Term SPY
Short Term SPY (imitating Icarus)
Long Term VIX (Waiting for it to return into the LT Channel
[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 am just going to post updates on my top charts: Russell 2000, Dow Industrial, XRT, SPY and VIX. As far as the SP500 EW count goes – I’ll go with my earlier post from this morning – we are still in Primary 2 up (although in the final throes) – this recount will require quite a bit of work and so will come in a later post.
Okay Russell 2000 Trading chart – you can see it tried to push above the exhaustion zone today (on no volume) – unbelievable.
Now the Retail ETF XRT – same comments as yesterday
Now the Long Term Industrial
Now the 60 day Industrials
Now the Long Term SPY
And the 60 days SPY
And a new chart on the VIX – I am watching before re-posting an EW count on this.
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:
[Update at 12.30pm - added the Long Term Industrial Chart at the end]
Okay if the dow goes much higher then it will jump out of my bear channel. If we are really in a bear market, with the rise from last march being a Bear Market Rally, then the market needs to start going down now. If it doesnt then i may have to buy some horns.
And a close up on the dow
As you can see, we hit the 78.6% retracement (from the Jan 19 decline) this morning.
And just in case you have not seen it before here is my Long term prediction.
Here is the latest count. There is still a chance for an extension, upto 1,127, however there is no need for it. The market is so overbought right now that I am suprised that there are buyers at all. Of course the whole market could just be several HFT ‘puters trading with each other, with a couple of thousand momentum traders along for the ride – but what are the chances of that?. Anyways – the latest chart is:
The pattern is still valid. It looks like the market is waiting for tommorrow morning to make a move. If I am right then we should see it rocket higher in a fifth wave.
Still not confirmed until we close above 19.04, however I like the feel of it:
[Update at 5.33pm- Changed the SP500 chart - I posted the wrong one earlier]
First some humour to make up for a sucky day:
- I am thinking of changing the name of the blog, from “A Part of NY”, to “Clueless in Manhattan”.
- My counts have been so bad lately I am thinking of applying for a job at EWI.
Anyway humour over – this week should mark where we are going- we are either going to go down hard, or we are going to continue living in the matrix and the rally will reignite itself. Tommorrow needs to be a down day or most of my charts below will be questionable.
Okay here are my primary charts updated.
First the Russell 2000. Once the market opened today my friday call was immediately invalidated . I expect this one to be better.
Now the updated count on the SP500. I have redone this as a (a)-(b)-(c) from Feb 5 with wave (c) completing an expanded flat, the final wave 0f (c)either completed today or will very soon.
A look at the dow
Another look at the down based on my ultra bearish chart (click here to read).
