Almost Time for the Big Obama Rally

We have Neely still expecting a dreadful fall, but Prechter in his EWT this week saying it is time to get out of the short positions, adn Yves saying be prepared for a buy signal bu the nd of March.

Prechter gave notice two days before the Jul07 S&P market peak (the Dow not the S&P made a slightly higher peak on Oct07) that it as time to short, and we have fallen 800 S&P pts in 19 months.  He was recommending buying the Sep07 futures, so he really called this about on the nose.  He now sees two possibilities: the interim bottom is close, and may come fast, so why risk shorting; or we have a more severe drop in conjunction with a more desperate banking crisis, and many of the trades in futures might fail due to the other side of the trade failing, o why risk it.

The STU has been counting so far 8 waves down in the recent move [wave 3 of (5)], meaning the 5 wave impulse has extended to 9 waves, and we have one last wave (down) to go. followed by final waves 4 and 5.  This pattern may meander out to around Mar20 before ending, but the STU cautions to look out for a truncated wave 5 and a really rapid up move before then.  When the wave 5 of (5) ends, we will have finished wave (1) of the whole drop from Oct07, and then see a strong wave (2) bounce, typically as much as 50%. 

We also Yves saying be ready around the vernal equinox (Mar21) for a big rally, but his signals are not yet definite.  His guestblog is below the fold.  

Crash Stress Test

I recently issued a sell signal on the 10th of February.  I have done so  in two prior episodes as well namely the 3rd October (2007) and the 2nd of May (2008). At each liquidity signal we advised going 40% to cash at the minimum.  So it is at this precise juncture now that we are facing the greatest amount of risk.  Never did I get such a number of diverging indicators at the same time. I call this a modern version of an Hindenburg Omen. It raises significantly the odds of an accident in the market.  Let's not forget that is all we are dealing in “probabilities”.

The alpier signal we did get in the last bottom of 2002 secured the lasting uptrend.  The market never produced such a signal so far.  We could be missing 14 more down days to generate it. We got to 41 down days out of 70 on the 21 November 2008.

In the event of capitulation, I do expect this event to be earth shattering.  We come from the greatest asset credit bubble of all time. Should the accompanying bear bottom be as grandiose?

Its been hard to leave the bull camp each time but safety of principal is first.  Work based on equinox cycles could be interpreted differently and is perhaps part of the reason some would argue in favor of a bottom.

I do believe the window of risk is still open until the end of March. My analog work points to the same time frame for risk to become minimal. Until then prepare a list of what to buy and stay neutral. Count us as buyers of bargains.

Yves Lamoureux , Investment Advisor, Blackmont Capital Inc.

Disclaimer: opinions and projections contained are of the guestblog author and may not represent the views of Yelnick, Blackmont Capital (BCI) or any other organization. The information contained herein is for information purposes only and this report is not to be construed as an offer to buy or sell any securities. Neither Yelnick, BCI nor the author accepts any liability whatsoever for any loss arising from use of this report or its content. The comments and opinions expressed in this letter are the result of work done by Yves Lamoureux. They may differ from the opinion of Blackmont Capital Inc. ("BCI") and should not be considered as representative of BCI, belief, opinion, or recommendations. The statements and statistics contained herein have been prepared by sources we believe to be reliable but we cannot represent that they are complete and accurate. This material is published for general information only. BCI assumes no liability for financial decisions based on this information. Readers should obtain professional advice before applying any ideas mentioned to their own personal situation to ensure their individual circumstances have been properly considered.  BCI is an independently owned subsidiary of CI Financial Income Fund. CI Financial is a Canadian owned diversified wealth management firm

Comments

[Canadian Money]

The SP500 sideways move from early October 2008 to very early January 2009 looks like a large irregular correction (Elliott's term). If so...great weakness to follow. The subsequent possible downward moving impulse wave since that time contains flat corrections. Also a sign of continued weakness. This all fits together nicely.

That may have been the "Obama Rally" people were hoping for.

Still betting on lower lows.

CM

[DG]

Given that Neely is expecting a big drop, wouldn't it be very ironic of Prechter, who's been one of the bigger advocates for the bear side for so long, were to miss it?

[Truthnick]

Prechter's trading advice is lousy. Neely's has been better lately but ain't so hot either. Yelnick wrote

"Prechter gave notice two days before the Jul07 S&P market peak (the Dow not the S&P made a slightly higher peak on Oct07) that it as time to short, and we have fallen 800 S&P pts in 19 months. He was recommending buying the Sep07 futures, so he really called this about on the nose."

Prechter's made a thousand sh*t calls. The laws of probability apply to him so he's entitled to good calls, too. But there's no reliable method here. I think Prechter makes money marketing, not trading.

[Steven_737]

It appears that w3 of 5 is almost complete at ES 730 (pre-open 08:37).
Currently (09:21) price (734) is working on v of (v) of w3 of 5.

w4 and w5 of 5 are next (If w3 is not going to extend).

Preliminary estimates:
w4 targets in the area of 785~795

w5 targets
a) in the area of 690 - shallow target (probably by means of ending diagonal)
OR
b) in the area of 650 - deep target.

cheers

Steven_737

[The Dude]

The Obama Rally is all based upon "Hope" and we all know that bear markets slide down a slope of hope. -2000 Dow pts since his election.

The Dude

[ian palamo]

If anyone have "NEELY RIVER trading technology" trial, can you kindly send me info.

Thanks
[email protected]

This is from an e-mail sent in 2007:

For nearly two years, I've paid a German programmer to code my unique, Neely River technology into TradeStation. If you have already taken my private trading classes, you will be fully prepared for immediate use of this highly effective technology. If you have not taken my private trading class, just a couple of weeks of orientation is all that is required to take full advantage of this powerful trading tool.

I've decided to let everyone try my Neely River Trading program for FREE until the end of July. A direction manual is included to help you install the program and set up the workspaces for immediate market analysis.

To download the program, click or copy the link at the bottom of this email. If you decide to continue using the program beyond the end of July, the cost is $2000/year.

Sincerely,
Glenn Neely
NEoWave, Inc.

[JP]

"Prechter gave notice two days before the Jul07 S&P market peak (the Dow not the S&P made a slightly higher peak on Oct07) that it as time to short, and we have fallen 800 S&P pts in 19 months."

Come on. Pretchter was calling for a top months ago. Once in a time you are right, but with this post it looks like if he is a very good market timer. But he is awful.

[Hank Wernicki]

All Market Publishers should Post a Spreasheet on their recommendations and trading positions within their web site to add clarity for the investing public.

Very few ( if any ) will risk doing this. Why ?

My trades are always public ....

Hank

[Hank Wernicki]

March 23rd Market Wavelet Low <<<<<<<<<<<<<<<<

[usdollar]

If I look at weekly close for djia, I believe we are in wave 3 of wave 5 of wave 3, It channels beautifully, with targets on weekly close of about 58-5900 until march 13 which is a wednesday. Of course intraday could be much lower, so I am defenitely in the dj 4600 camp til mid march. From there wave 4 sideways action until the end of the summer, and then from there wave 5 down to an ultimate low.

ewi have called tops so many times, that eventually one of their dates come close.

[Al from Oz]

You mean the rally to the down side dont you Duncan?

Just being cheeky.
Al