Are the waves working?

After Neely's emergency bulletin, where he said govt intervention was affecting waves, Prechter came back with today's EWT saying the waves incorporate govt intervention and are working. This morning Neely sent a new bulletin and a chart (available to his subscribers), saying he "figured out how to properly adjust S&P wave structure to get it "back on track" and maintain the longer-term structure and perspective."  His view: next week we will see a panic sell-off and hit the lows for this year.  Then (presumably) The Surge commences - in my wave count, a b wave of an abc zigzag from Oct07 to ~2010, which is the C wave of an ABCDE triangle from 2000 to ~2014.   

I am not calling The Surge yet - let's see how next week develops.  Both the STU and Neely agree that softness on Mon/Tues will spark a panic rout downwards.  Whether it ends quickly (Neely) or drives deeper than anyone imagines (Prechter) remains to be seen.  Some of my readers have pointed to the next turn date of Oct2, which coincidentally is the night of the Palin-Biden debate.  The race could be decided then, given the continued inordinate attention to Sarah Palin - gaffer or gipper in one night.  So let me suggest that we have a two week period to see where this is going, 

Next Thurs Sep25, Yves will chime in on Bloomberg TV at 17:00 ET.  We should have good visibility whether we are in the STU Cliff down, ending the Neely Panic, or amidst the Yves Buy. 

Comments

[Upstart]

What is strange about the waves? I looked for an ending diagonal from the August high and we got it - and the dramatic reversal. Whether it was the last c-wave of a double zigzag, or the 5th wave in a leading diagonal from the 10/07 high, the result is the same for some time.

[george]

the government is putting up a huge sum of money
to back non fdic backed money market mutual funds.
the reason given on cnbc was one of the funds went
below its dollar net asset value this past week.
it doesn't
sound like a good enough reason to create
80 billion
dollars of debt to back them against future
losses.
i think backing the money funds is a bad idea.
they will start having garbage paper in
their funds to inflate their yield.
george

[da bear]

I have gold in a fourth wave counter-trend rally with a wave 5 down to end this correction. it could also be described as a D wave.

anyone have any thoughts on gold?

da bear

[min]

Da Bear:

I hope you are right. Your count is my least probable count but the one I hope plays out. My top count is this rally is wave 1 of next move up with the nextpullback to develop as wave 2 before more advance to upside. I am pulling for your count.

[DLU2]

who believes Neely.his gold shorts were stoppedout with
huge loss.shorts from 1/4 $850 and 1/4 860dec gold at
910.4 with a $50 to $60 loss when gold hit $926.

[Upstart]

da bear,

Carl Futia said $935 should be the max. but that it probably already topped. He's targeting $600 now. He had been targeting 700.

[Francis Schutte]

Why spent all the energy to try to find out which way the US stock exchange is heading for? In the end, as the value of the Dollar will crash, it won't be so important: $ 0 x Dow Jones of 1,000 = $ 0 x 30,000 Dow Jones!

[Francis Schutte]

Da Bear:

check www.goldonomic.com ...technical analysis!

The $ 1,100 to $ 1,200 objective for this year is still in place.

[Tom CZ]

re Upstart> I waited for the same so do not have any reason to change view just because of emotions. It is clear that we will see some retrace back for the first days of next week but overall I am playing year end relief rally of 15-20% on majors. B/W I bought russian market which did almost 30% spike by the end of this week as I am playing also commodities "b" wave spike. I do not want to go against VIX beating 42 (why to wait for arnd 50 lvl when risk to 15-20) and sentiment which got to lvls like on the Bund in June followed by great reversal. B/W bonds got very bullish due to two reasons> safe heaven and lower inflation expectations. If we see stabilization on equities and correction on commodities will see strong selling on bonds till November/December when cycle starting to turn.

Tom CZ

[puravida19]

Won't eliminating shorts of financial stocks cause them to rise until Oct 2 because longs will still be able to buy puts to cover any loses? Isn't this a rigged game?
-----------------------------------------------------
On a separate subject, is there any amount of taxpayer money the Republicans won't spend to win this election?
Bailouts benefit the people who got us into this mess.
Bailouts will make the final reckoning that much worse.
Bailouts are spending money we said we didn't have and insure that we will never be able to spend on infra-structure to rebuild out of this mess. It is a rigged game to make us into two classes, by killing the middle class. Will everyone agree that privatization of government services have been proven wrong? I am only sad that William F. Buckley isn't around to apologize.
If the market is up on Nov 4, they win. Can they keep it on life support until that time? Can they manipulate the market one more time? Of course they can.

[deacon]

the ted is still spread!!
ted spread is still 229bp friday, a historically horrible number...this weeks historical for stocks is about as bad as can be, and worse when the whole year is negative as is thus far...resolution trust was proposed 2/9/89, subsequently by the time it was signed into law on 8/9/89, gold had fallen 6%, crude oil rallied 16%, SPX rose 17%, TYX fell from 8.57% to 7.90% during the period.

[Yves]

"The green light surely is being given to speculators to drive down the greenback and rally the commodities complex again".
from Freeflation is back, 9 September 2008
Both oil and gold have exploded upward.
Yves

[Ross]

Yves,
what I find most interesting, regarding oil, is that it had this incredible move up but DUG (the short oil and gas ETF) was also UP... I had been shorting Oil gas and took profits on DUG a few days ago as the oscillators were weakening.

I also sold my gold positions today (gold ETF GLD).. I'm just worried this correction in the dollar is just that.. A correction. -Ross

link below to DUG
http://stockcharts.com/h-sc/ui?s=DUG&p=D&b=3&g=0&id=p93428093361

[yves]

Ross, the greenback needs to be watched here closely.I agree that it could be a temporary correction.The first move up could be primary.I have been long US dollar for a while now and it has paid off against the canadian dollar.If my deflation thesis hold the greenback will profit from the contracting world monetary aggregates.Uranium did move up nicely recently and I still favor it over gold and oil.My best bubble play remains the up and coming carbon emissions.Cheers

Yves

[Ross]

Thanks Yves for the response..
I have bee watching a couple of uranium stocks after your suggestion..

Cameco corp (ticker CCJ)
chart below:
http://stockcharts.com/h-sc/ui?s=CCJ&p=D&b=3&g=0&id=p93428093361

And, Uranium Resources Inc (ticker URRE)
chart below:
http://stockcharts.com/h-sc/ui?s=URRE&p=D&b=3&g=0&id=p93428093361

Both are showing some slight positive signs of bottoming.. URRE is most interesting, it could be explosive to the upside.

Thanks. -Ross

[deacon]

i hold some URRE from the 2.0 area, can see on it's last ramp up toward 4.0, it has good amount of product in the ground...risk on all the resources is the amount of volume into their lows of this year, might demand a lower volume retest of those lows to get started...similarly on SPX too much volume into 1133 could demand a retest...neely long TY with a stop at 114-14:
http://www.traders-talk.com/mb2/index.php?showforum=45
ted still spread:
http://www.bloomberg.com/apps/quote?ticker=.TEDSP%3AIND

[Yves]

Ross, have a look at uranium participation.You will be surprised to see that this often performs better than stocks.This is the physical form you buy.Very much like when I recomended gold I bot the ETF and also the oil ETF.You get the real return of the asset without the tumble of a stock market.

Yves

[MHD]

Yelnick... from your last post, Neely expects a surge up in stocks after a blow out on Monday and Tuesday, which did happen on Monday with Tuesday being pretty quiet so far as of 12:00. Is that his view of the current wave count?

[Ross]

Yves.. thanks so much for the heads up on uranium participation.. -Ross