Last Chance to Get Out?

The market is poised to rollover. This chart from 1930 (courtesy EWI) shows how we have traced back to the same area of the end of the rally in 1930: the 'fourth of the prior third' of the big drop the prior Fall. The 'fourth' is a bounce after a deep fall in the third wave; the psychology is that this where a lot of folks bought into trying to catch the bottom back then, and got caught out; now they are given a last chance to bail out and recover their paper loss. 

Will they bail? Right now insiders are selling, institutions are lightening up - and the poor sap retail investor is jumping in. A perfect time for the smart money to get out! 

If they do, this rally stalls and down we go. If the little guy jumps in enthusiastically, the smart money will steadily sell into him, and the market could continue a slow creep up towards Dow10K. Watch the arena the small guy tends to ignore, Forex: a Dollar reversal signals a Dow top.   

The S&P has already gotten to the fourth-of-a-third level; the Dow got right into the middle of that range today at 9714, right between 9654 and 9794. This morning the little wave ii had a continuation, then the wave iii was the strong rise during the afternoon. Perhaps a wave iv pause tomorrow or Thurs, then a final pop up. If this wave structure is correct, the market could meander up to the autumnal equinox of Sep20, this Sunday; meaning topping Friday or Monday.

It is a bit disconcerting to watch volume be so light, even after the pros returned from the four day week last week. Even in Forex we see lighter volume, with the USD dropping but an end nearing. This lighter volume is a validation of a topping market (and bottoming Dollar). 

The edginess is a reflection of a brewing lack of trust. The Obama Bubble burst in August, and seems unrecoverable. He just had his little 'wave 2' rally, and it was brief. A populist rally surged into DC on 9/12, and was barely reported despite having at least half a million protestors (estimates range broadly; see photo for your own estimate). What can the public do to grab the attention of these leaders and get them to wake up? Their edginess is shown to be impotence, and is turning to anger. Not a mood to drive a rally! 

This edginess has a simple cause: unemployment is worse than the official figures say. The reported 9.7% is people receiving unemployment benefits over the presumed labor force. Most people know that 9.7% understates, since many of the early unemployed are no longer getting benefits, and many others have taken part-time work and dropped off benefits. Perhaps most telling is the calculation of the presumed labor force is itself suspect. The Labor Dept has birth/death adjustments which skew the whole analysis.  

Here is a simpler chart: employed over population. It tells the story: employment peaked in 2000 and has dropped since; currently it is falling off a cliff.

These charts and a lot of concurrent analysis was released today in Prechter's monthly EWT. Worth reading. He notes in several areas, such as real estate, the private economy is NOT coming back. Again, the populist anger emerges when people see this around them. 

The now famous Congressman who broke protocol and shouted out that Obama was a liar caught the popular mood: who would you want us to believe, Mr. President: our eyes or your lies? I hear he is raising record amounts of campaign money from small contributors. People are voting with their pocketbooks, and it is not into stocks, nor into the economy, but into a popular revolt against the faded icon of Hope and Change.   

Comments

[John]

Did we also get a 4 of 3 wave visit in 1938?

Seems like your count is different than Dan and Pat's counts, they called a possible end to P2 today.

[Rob]

According to Kenny, 1060.72 SPX is exactly where wave (3) of P1 broke both the 2004 support & the support line under the 2002 - 2003 lows. I am watching that figure. I believe there is a band of resistance up to 1065. Tony Caldaro has a pivot of 1061 +/- 6 points. If we go higher than say 1065 - 1067, it is clear sailing to 1100 - 1120. 1066 also coincides with the 20-month MA on a monthly basis. Historically, this has been the long-term trend confirmation.

I am watching tomorrow's industrial production/capacity utilization data and the homebuilders index.

Buffett is also being interviewd on CNBS tomorrow morning.

[TwoJacks]

Many moons a lurker here.

Finally had to say something.

Great piece.

[EN]

I recall a few month ago, somebody posted McHugh's turn date of Sept 17 or Sept 25. 1062 is a Gann Square of Nine resistance point.

I am going to do a lot of selling right here.

Good luck.

[Rob]

McHugh's next phi-mate turn date is September 25th. He says it should be a significant turn. He hasn't posted yet tonight.

Following that, he has phi-mate turn dates of Novembe 4th and November 30th.

Perhaps Sept. 25+/- is a top, Nov. 4th a bottom and then a rally to Nov. 30th+/-.

[Brian]

I couldn't help but chuckle at the timing of the two headlines today:
Headline 1 (Yahoo! News): Fed Chief Bernanke Says Recession 'Very Likely Over'
Headline 2 (from EWT): Targets Reached, and Turns Imminent in Four Key Markets

[min]

Did anyone notice that the "Depression Began In 2000" Chart shows a H&S Pattern that is very close to reaching its target?

[min]

With Prechter's poor overall timing record I'd be careful about following his lead too closely.

He is having his time in the sun because the market has gone over to his neck of the woods, but there's no guaranty it will stay there indefinitely as he has done since roughly 1987.

Oh, a correction is coming soon but those riding it down to 1500 or 40 will be disapointed and broke.

Reaching 5500 may even take a while and happen in stages. Corrections are hard to forecast. This is a GSC correction so it is not even necessary to do so. Ride its broad stages up or down and relax a bit.

Of course if your investment horizon is 100 years, then simply diregard this.

[Le Chiffre]

Min, as I understand it H&S patterns need to be confirmed by the corresponding volume pattern. Not sure how reliable that H&S in (un)employment would be then, what do you think?

[Bob M]

I realize this is an EW/TA environment, but someone pls tell me how the relationships between the US dollar, equities and gold are working these day. I used to time stocks using the dollar/yen. That seems to have turned upside down. And why is gold going the same direction as the Dow? With the dollar becoming a "funding currency", how is it possible for stocks to rally. Any foreign investor takes both the ordinary risk of a stocks plus the steady decline of the dollar. We are certainly in the looking glass at this point

[min]

Le Chiffre:

Strictly speaking H&S's are price patterns. You can confirm them further with volume but this pattern is in itself measuring volume of employment/unemployment not price.

By it's nature, the breakdown past the neckline did occur with greater volume. The decline still has a little bit to go to meet its minimum objective but it already has behaved like a bonafide H&S.

My whole point is that deterioration is further along than realized. I believe upcoming deterioration will be further obfuscated by all the world wide government intervention being levied on what are supposed to be free markets which in itself may change the type of EW correction pattern we end up with. This is something Prechter may not admit untill after the fact.

I don't see DOW nominal prices at 40, 400 or even 1500 at this time.

The DOW has already lost some 80+% in terms of gold. In the great depression it lost around 90% total.

I do see a VERY long time passing before we get to another true bull market. Those expecting a repeat of 1930-1932 I think will be disappointed.

[William]

"The now famous Congressman who broke protocol and shouted out that Obama was a liar caught the popular mood:"

Tend to think that most of this campaign money being mailed is probably a racist reaction.

[Sherman McCoy]

Rollover? Really? Sounds like hope rather than rational thinking. All that cash sitting on the sidelines takes a long time to get invested. Months, if not years. Wait until portfolio managers have their quarterly client meetings and clients rip them a new a$$hole for not being invested. Like sheep, PM's will start buying aggressively. Volume will spike. Until then, we'll continue to climb that wall of worry.

I like your charts. They're meaningless, but I like them.

[elskid]

"The now famous Congressman who broke protocol and shouted out that Obama was a liar caught the popular mood:"

Tend to think that most of this campaign money being mailed is probably a racist reaction.

I sure hope that was a joke or sarcasm because MY donation was strictly on the facts that Obama has wrong yet he keeps saying. "You can keep your coverage" is his statement but in the bill it says you can keep your own insurance UNTIL your employer hires ONE more person.

Calling it racist comment is a ploy to change the focus from "Did the Prez lie?" to "Is Joe Wilson a racist?" I am MUCH more interested in the Prez and his agenda than that of Joe Wilson.

[Brian]

>All that cash sitting on the sidelines takes a long time to get invested. Months, if not
>years. Wait until portfolio managers have their quarterly client meetings and clients rip
>them a new a$$hole for not being invested. Like sheep, PM's will start buying aggressively.
>Volume will spike. Until then, we'll continue to climb that wall of worry.

Sherman, I'm afraid it is your comment that is meaningless.
Mutual Fund cash to asset ratios are around 4.2%. Their lowest was 3.5% and that was in July of 2007. Through the 1990's they worked their way from roughly 12% to 5%. It was in the 2000's that they spent most of their time below 5%.
The sheep have already climbed the wall. They're nervously looking at each-other now with the strange feeling that they might just get slaughtered.

[Mamma Boom Boom]

My indicators just keep vacillating between neutral and positive, allowing the market to eek up an inch at a time, with no apparent wave structure. Very unusual action, probably the result of massive government manipulation.

[vipul garg]

Brian , good one there.
"The sheep have already climbed the wall. They're nervously looking at each-other now with the strange feeling that they might just get slaughtered."
a very insightful and amusing comment in a long time

[CNBS Chumps Are Everywhere]

Sherman McCoy: "...All that cash sitting on the sidelines..."

Bwhahahahahahahahaha!!!

Another CNBS junkie thinking that he is so well informed and quoting the mantra.

Cramerica! BooYah! CNBS!

Look at the REAL data!

[da bear]

Figure 7 (S&P 500) in the latest Theorist is THE SAME CHART as figure 5.7 (DJIA) in At The Crest of the Tidal Wave.

da bear

[flintovski]

Great site Yelnick. I've been reading your blog for a couple of years now. I'm looking at full moon Monday Oct 5th for the bear to show its claws.

"When shall we three meet again
In thunder, lightning, or in rain?"

[yelnick]

William, wouldn't you say that if the money going to Wilson is racism, the money that went to Obama was also racism? He seems to get a free pass due to his race, both in the election and since. The argument that racism comes from the power structure, so it is not racist to support him whereas it is to oppose, seems to fail once he became President. On the other hand, Wilson's behavior was inappropriate. I am not defending it. I am pointing out that it indicates the mood swing to negative. Maybe race plays a part. In either case, it bodes poorly for markets.

[yelnick]

Sherman, there was a lot of cash n the sidelines in the '30s too.

[yelnick]

Bob M, great questions. Since the Greenspan Indian Summer bubble from 2003, we have had all markets aligned against the USD, including gold. This is perhaps the best indicator of a credit bubble (vs a new technology bubble like tech stocks in 1999) I have seen, and means that one can see a bubble forming despite Greenspan's various excuses. That all markets are aligned again is an indication that what is going on is a Bubble Echo, another and perhaps final attempt to reflate the economy. Hence Gold will peak, and the Dow will peak, about the time the USD bottoms.

[Eventhorizon]

On the subject of Wilson / Obama ...

It doesn't seem beyond the bounds of possibility that some portion of the American public finds it intolerable that a white man be forced to publicly apologize to a black man.

From the tone of Wilson's own comments it is clear his apology lacks sincerity.

[Huge Yelnick Fan]

Yelnick "Hence Gold will peak, and the Dow will peak, about the time the USD bottoms."

Sorry, but not this time.

I know that you have stated that you don't follow the Gold Market, well I do. It is your honesty in this statement that makes me read your posts. Like so many others, you don't jump with conclusions about gold, especially when most don't know their ass from a hole in the ground about gold.

Anyways, gold and silver are finally separating from the U.S. Dollar, thanks to China. It is China that is buying on all the dips in both metals. It also appears that there is at least one other big buyer on any dip.

Soon you will see a bidding war as the metals move higher.

I also expect the DXY to head for .70 with an ultimate minimum of .40.

I feel confident that there will be a 50% devaluation and it will probably be a declared one following a Bank Holiday.

Also, there is the largest and most egregious COMEX short position in both gold and silver. These crooks are going to have a religious experience, as they attempt to take on China, et.al.

[Chris]

Before to take a new position, i'm waiting for Yves next comments. He's my favorite contrary indicator.

[Sean]

Yelnick,

" insiders are selling, institutions are lightening up "

Can you elaborate how do you know inst is lightening up? Various smart people said those stupid Late inst are actually jumping in now. This is why we have 9 days of continuous up days in a row.

[yelnick]

Sean, I added two links to the post, one on the retail day trader coming in while institutions are going elsewhere. From today's WSJ. Key quote:

"The revival of short-term trading doesn't necessarily reflect long-term confidence in stocks. That's because a lot of long-term money is still sitting on the sidelines.

For instance, mutual-fund investors -- who generally buy and hold for the longer term -- in August plowed 20 times as much money into cautious bond funds as they did into U.S. stocks, a riskier investment. And as of early this month, investors still had as much cash parked in money-market funds as they did a year ago, when the financial crisis was coming to a head.

"At the same time, there's been heavy activity among "leveraged" exchange-traded funds, designed to magnify returns, and "inverse ETFs," designed to profit when prices fall, says Mr. Repetto of Sandler O'Neill. Both are favored tools among short-term traders such as hedge funds and day traders.

"As evidence of the revival in short-term trading, much of the volume in recent weeks has been in financial stocks and other extremely volatile shares, where investors try to grab a quick buck on rapid price swings."

[Joe]

Everyday is like 1929 or 1987 to a top picker.

When will the "Top pickers" always trying to "pick tops" learn that "picking tops" isnt the way to trade?

[Sean]

Yelnick

"Sean, I added two links to the post,"

Which 2 links are added? I mean, I was looking for the inst selling link. Did I miss it? I am interested because smart investors said the dumb and late inst are just piling in last few days to chase the performance. After all it's other ppl's money that they are playing.

[knapp]

Neely alert just released: "Possible Change in Structure of 4-year Bear Market"

[Genes Letter]

Happy Labor Day!

Strong rebounds into Labor Day . . (my original expectation against a bearish bias for the near-term, with some bounceback coming from lower levels) is yet-capable of worsening the near-term future for the market, rather than enhancing it. Of course we realize how thin markets can shift (saw much of that in recent days) prices repeatedly in alternating directions. The perfect pattern might be a move up in the early part of the new week, followed by the return of (defensive action as outlined to members).

Daily action . . . has discussed this, and even support and resistance Dow levels for the period coming right up in tonight’s video; so we will dispense with further analysis of that for now, and go to summary of some of this week’s key point, then that video.

The parallels between 1930 and now . . . have been reviewed repeatedly; not just because factors entirely match (they do not); but because of sufficient similarities that warrant remaining alert as to characteristics (previously noted). I realize that when we called for the Fed to emphasize ‘bank stabilization’ nearly two or more years ago right in the wake of our correct ‘epic debacle’ Spring of 2007 forecast (that’s precisely what the Fed did); we also felt they would not deliver on political and sociological pledges, such as helping small business meaningfully (at least a very important aspect, since 70% of domestic hiring is by small business). That vision of limitations was right too.

I’m compelled to note the variations. During the ‘Great Depression’ you had the bank closings which prompted not only ‘bank runs’ but loss of confidence among a majority who were gainfully employed; thus a panic thrust the Nation into a greater economic chasm than otherwise would have occurred. As anticipated, we avoided that this go-round. And the ‘breaking the buck’ analogy some make to suggest that was an actual bank ‘run’ is as absurd as any saying that ‘China breaking’ is good for market action here (they will retreat to any rationalization of a bullish near-term outcome very much any way they can). We have not had (reserved); however it is not irrelevant that less than 100 banks have failed in the U.S. as of yet in this current era, whereas even in the 4-year stretch of 1989-1993 about 1500 banks failed in the U.S. So be cognizant.

The point remains that the arguments about ‘recovery’ are likely going to moderate to arguments about stabilization; which is all we said really existed aside temporary and expedient measures to ‘shore-up’ the leaking economic ship. Statistics like the ADP’s employment numbers and breakdowns, reinforce our view that what really happened, aside some temporary inventory rebuilds, and pulling-from-forward-demand initiatives like the ‘cash for clunkers’ deal, were overrated by the glass-half-full crowds, whereas in reality what’s going on is simply things deteriorating at slower rates. (Not recovery.)

The economy will bottom; it’s oversimplification to say that we’re in a ‘bear crowd; as well as accurate that we projected this, in-advance, in late 2006 and early 2007; and then in May of 2007 called for an ‘epic debacle’, when we realized what was covered up (and remains obscured) by the Federal Reserve and the major institutions. Sorry; we’d love to be bullish again (beyond our correct call for ‘best rally of the year’ Spring rebounds starting in early March); but not to satisfy those who want to market stocks.

That is why we rightly called for an accelerated purge not only in the Fall of 2008, but a further purge in early 2009, leading to a plunge in February and then that ‘best rally of the year’ (which last longer and went further than thought; but you never know how it will go in a bear market snapback). As to whether our forecast (extended) rally of this year was the first phase of a bull market can be believed by the majority; but any substantive evidence (conclusion for members). The importance here is (whether) a bear is coming back (and growling for more); and that bull or bear further out isn’t yet relevant, unless you want a guess. (Redacted) much will depend on the nature of the technical action just ahead, as well as determinations that Congress and leadership may or may not initiate. For all practical purposes the next few weeks overall have great downside risk whether it is a bull or bear longer term. There is scant technical evidence to suggest (reserved for ingerletter.com members only).

Prepare to get sick! Those were the words of Homeland Security Secretary Janet Napolitano this week, as she called for Americans to expect a “big influx” of ‘swine flu’ cases this Fall, and revealed what we already had: there won’t be vaccine in time (she didn’t mention that it might not work anyway). So you realize I’m not in any way exaggerating this; her words were: “we're in all likelihood going to have them (new infections) before the vaccine is available." That’s a precise national interview quote.

The Secretary of Education Arne Duncan added, and I quote: “"We got a little bit lucky" in the last school year, because the H1N1 didn't surface until very near the end of the academic year.” "We're not going to be so lucky this year," Duncan added, "so the more we're prepared, the more we're talking ... the better we're going to be able to handle this as a country, the more we're going to be able to keep our schools open." This wasn’t mentioned in financial media; because it’s notably newly sobering.

Started to say.. ‘the pandemic could be’ to 2009 (hard to say for early 2010 as of yet), what the banking crisis was to the Depression. If this hits as they suggest, then it’s for sure not necessary to make a bearish case; money managers will be hitting the exits, to preserve what they have from the preceding recovery, as expediently as feasible.

That they haven’t heavily yet proves how they act in herd mentalities; not proactively, which was the same thing that happened in 2008. Facts were eminently visible well before they sold, but because ‘many’ don’t care with respect to actual performance in regard to their clients; what isn’t understood nor ever discussed is how they’re trying primarily to ‘match’ their peers or the S&P. Thus their decisions (no matter how many ways they spin it when interviewed) tend to be a job preservation effort, more so than a desire to not only make, but preserve clientele’s capital. A hedge fund manager, in theory, may do a bit better; but ironically few hardly do. Why? Consider same reason.

Our point is simple: the ‘best rally of the year’ happened; it was better than I thought initially; it’s over (final post-holiday fling or not), and won’t revitalize merely because many want it to, or possibly missed it entirely (or worse, were dr. doom types looking for a lower level rather than a Spring rally). You can’t make markets conform to one’s goal ever; but you can be proactive and try to avoid or sidestep the most dangerous times, and then fade that by nibbling periodically when panic runs through Wall Street (that is what we did both in late November in tech and again in late Feb./early March in oil and other sectors, including the general market and financials, for the rebound that of course lasted longer than we thought..how well one did depended on an entry more so than exit I suspect; since best gains typically occur in early rebound weeks. Fairly soon, those unprepared will look for rallies to sell-on, rather than dips to buy.

Analysts calling this a ‘buy the dips’ or ‘buy the rallies’ situation, which in my view are nuts strategies (in most cases) analytically. There is not a stock to buy for all seasons or every day. As to Gold’s rally; we’ve predicted that for a couple weeks now, and are fairly pleased, but do not project anything all that dramatic; when I said it would break to the upside a couple weeks back, I measured something like (reserved) short run.

Hope is not a strategy . . . and risk has increased in recent weeks as outlined. Sure, it has been tough and erratic, but that’s a market when in our view, money managers, spewing the story about ‘sideline cash’ about to come-in; actually are worried about a preservation of the gains they made from our previously-indicated early March lows. I suspected for some days now that what this may mean is a reluctant liquidation as or if various so-called ‘support’ points are penetrated in the course of the overall decline.

Sheila Bair was very candid about commercial defaults being more of a driver of lots of bank failures this Fall. This is precisely the type of issue we’ve been concerned of. The references some are making about the ‘stress tests’ being feather tests of banks, is something we’ve argued all along; based on ridiculous underlying assumptions. As to the economy and market, it simply means a dampening of growth prospects; such that valuations are a directly-tied inhibitor of equity price gains, even if we stay stable.

Macro action . . in this semi-holiday trading week; we want to note that headwinds in a sense are increasingly becoming noted; which debunks the ‘V bottom’ argument for the economy; and sidesteps the nonsense idea that one must invest because of very low returns on things like CD’s (.8 % at Bank of America for so-called risk-free CD’s; and though they’ll be around; I wouldn’t loan them money on their credit rating for .8).

The risk of protection selling as this accelerates down (not immediately necessarily it is a process after all; and coming off an incredibly tedious period as we can attest to), is that money managers will increase their selling after it starts to crater so as to keep at least part of the preceding rebound’s gains. The idea of vast sidelined cash ready to invest now, is an absurdity. Not to mention valuation comparisons that are insane, given where (withheld remark) is going; even if moderately advances over next year.

Anxiety hasn’t crested . . . yet; which is interesting considering that most all money managers who concur about ‘risks’ to the market, remain entirely invested. That has a significance; because if they’re ‘afraid to sell’ lest the market go higher; and at any point soon it decides to seriously abort the advance (internal divergences already are visible in a few areas, and have been for some days now), then there could be some sort of ‘scramble’ not to worry about upside, but to preserve gains in-event downside looms (for any of a number of catalyst reasons that are out there if you dig just a bit).

In my opinion however, we were never ‘as historically overbought as ever before’ as some bears contended, which is why while feeling the risk-reward ratio didn’t warrant chasing the market, I was not in the immediate ‘must collapse’ camp during August; just in the mode of warning of the risk matrix increasing with September dangerous, whether it be a bull or a bear overall. In some aspects internals already topped while in others they had not. Just like equity sectors, it (was) essentially a ‘mixed bag’.

There is another totally ignored related issue that simply slips peoples’ minds. Iran’s refusal to moderate their persecution/prosecution of political dissidents, along with an ongoing march towards nuclear capabilities (if not proliferation given the unreported Syrian missile misfiring that hit one of their own towns; reportedly coordinated with an Iranian and North Korean team). This week both France and Germany strongly noted not only the feasibility of ‘sanctions’ within a month if Iran doesn’t comply, but France went so far as to offer the French Navy to be deployed alongside the US Navy in for all practical purposes a ‘blockade’ of refined petroleum products reaching Iran. And of course there is the (comic?) threat of an Iraqi-Syrian conflict with forces marshalling.

Macro action . . here in the latter portion of the August doldrums appears to be just a stock market hanging-on by it’s fingernails, with risk-reward perspectives uninviting at all to buyers, and the danger of an implosion (for any of a number of causes) out in front of us, if not particularly ascribable to any one influence identified alone. Rather it is a coalition of factors that deny the cheerleading efforts of many; that reminds most to simply remain in a guarded posture, without excessively exposing themselves.

There is some talk of a ‘market meltdown’ occurring from a sort of ‘rogue algorithm’. I think that’s sheer nonsense to describe the growing risk, that they don’t want to admit would be perfectly normal from an overbought condition and deteriorating economics.

But we can give you one element that might surface. There is talk about regulators at this point being asked to prohibit derivatives dealers from reusing or redeploying that 4 trillion in collateral posted by customers as guarantees on derivatives trades. If they can’t redeploy said collateral, to use as they see fit (one of our earlier criticisms), then costs associated with derivatives (or toxic asset maintenance in general) will (more).

Weakened economic fundamentals and unsustainable or unrealistic earnings reports (primarily from cost-cutting and of course looking better ‘relative’ to Q3 and Q4 of last year; how could they not), have dominated the cynicism about the proclaimed ‘newer bull’ market. This remains a secular credit-starved contraction; as I’d forecast 2 years ago; interrupted by what was expected to be 2009’s best rally starting in early March.

The core of the problem is no different than we’ve outlined for a couple of years if not longer: the U.S. is addicted to debt. We didn’t solve the tech bubble with easy money; because we merely stimulated an already then-brewing housing bubble. Now they try resolving the housing bubble with even more cheap money; but we’re not, because it mostly is Government promises and pressure; but private initiatives that achieve what little is being done. Today's massive monetary and fiscal stimulus is however creating another type of asset bubble. I call it a ‘transference’ of debt from the private to public sector; but it’s still there (even larger), and inures to all of us. Keep that well in mind.

Conclusion: stabilization efforts notwithstanding; overall recession and deleveraging conditions will prevail (not may prevail) through this year, and probably into next year as well. Intervening rallies in markets will occur (some fairly wild), of limited duration. In event other developments unfold that could truly change prospects; we’ll evaluate.
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Twenty-nine months ago I commenced projecting an 'accident waiting to happen'; affirmed historically after long-duration periods of free money (Gilded Age mentality). Now a market struggles with periodic rebounds as this economy tries to restructure.

Though enormous efforts have avoided systemic disaster on the banking front; there is no equivalent rescue of the overall economy besides perception; nor restoration of engines for sustainable growth. People are adjusting to lower expectations; which will never be a favored approach to American life. Actually we don’t see it as permanently alternating the future; but we still have major adjustments to work-through. That’s the reason we warn about chasing rallies; not to mention major ‘commercial’ adjustments as are ongoing. And as I’ve said; there are fairly visible new storm clouds gathering.

Enjoy the holiday!

Gene

[Miguel]

to huge YELNICK fan:
i see gold booming as well upon a certain point. But right now i fear the possible de coupling with the dollar that just popped up for 2 days two weeks ago did not confirm.
On the very short time i am expecting a drop now along with silver upon the turn in the markets that can now be expected in hours rather than in weeks.
What do you think of the very short time. Next days , 2 weeks?

[yelnick]

Sean, click on the retail investor link

[Mike McQuaid]

SPX, $TRAN, XLF NDX all in an uptrend. SPX tracking toward invisible resistance about 1120. Path of least resistance is up. Long side is preferred until a clear wave 5 off the March reversal appears and confirmed by a topping candle formation. The current pattern has a lot to unfold, still.

[forPPP]

Neely changed mind - we are in bull market !!! Well, that's the best indicator we should start selling !!!

[psycho_puppies]

Does anyone know what the all time high on the $BPNYA (NYSE bullish % index was)? http://stockcharts.com/h-sc/ui?s=$bpnya

[qqqq]

Yelnick

You had the correct count several years back. It made no sense to you so you pushed it to the side. The Depression did not begin in year 2000...and we have NOT had a Recession as yet.

[DG]

forPPP,

That's not what Neely said.

[Big Neely Fan since '99]

Neely said we might be terminating the end of an enormous change in the bull phase of a large bear/bull continuum with a strong, possibly very strong down leg before the real top can begin to bottom, I think.

In other words, hold onto yer hats, it's gwanna be a bumpy ride!

[DG]

Big Neely Fan,

I'd say that's more accurate. According to that possible count, we're heading into a period over the next few years where 25-40% swings in either direction over six months will be the norm.

Right now, I am of the opinion that Neely will not end up having to change his current count, or if he does, it will not change to that count, due to two flaws, one relating to NeoWave logic and the other to "legal" Progress Label positioning.

That said, the market doesn't care what I think.

[Big Neely Fan since '99]

Dangerous time. Getting ready for the big drop that never comes. Precther doing his job, getting lots of amateurs like us short stocks and long puts so the pros can make their living. Prechter likes to pretend his subscribers stay above the herd but nobody herds like a Prechter follower. They are sheeps to the slaughter. And the monthly subscription hurts almost as bad as the investment pool down the toilet. And it hurst even worse because everyone else is getting richer at your expense.

Very bad time to be a Precter follower. Bad, sad, mad time.

Didn't mention those who have decided not to go long gold or, worse, shorted it while being herded into the Precther corral. Ouch!!!

[min]

Think 1970s style markets on steroids and you'll have a good enough road map to keep you profitable for quite some time.

[Mike McQuaid]

NDX weekly from the '07 top, count 1 down to March '08 at 1668 has been exceeded now at 1723 so a wave 4 of a 5 wave down C wave is now busted and off the table. This suggests the Nov '08 low completed an ABC correction off the 2000 high and we are now in a bull market.

[min]

I hope you are right Mike but I'm a cautious long right now so I'll keep moving up my stops just in case...ratchet...ratchet...ratchet...

[You Have Been Warned!!!]

A FASCINATING LOOK AT THE WORLD FROM A SOCIONOMIC PERSPECTIVE:

Clearly, we have an unprecedented wave of incivility: Joe Wilson "liar" comment, Sean Combs grabbing the Video Award away from the white woman... etc...

This tells us that we are in a Wave THREE (3 of iii of III) SUPER GRAND CYCLE MARKET and it is time to dig in for the nightmare to follow. We are up to our heels in debt, debt, debt with lots of irresponsible people (including our very own Fed!)

This is going to end badly! Suggest you pony up for your EWT and EWI subscriptions to hope to have a handle on the craziness to come!!!

Good luck!!!

[lupani]

"Neely said we might be terminating the end of an enormous change in the bull phase of a large bear/bull continuum with a strong, possibly very strong down leg before the real top can begin to bottom, I think"

I'm sorry Big Neely fan, it's either your use of english or that damn plate in my head but this sounds as cryptic as i've read lately.And i know Neely isn't that vague.I understand the problem with disclosing proprietary stuff.Given that, can you or anyone else be more clear on the essence of this alert?(though i do acknowledge DG's post after yours).

[min]

"Clearly, we have an unprecedented wave of incivility:"

Whoever joins Mr. "you have been warned" into the Prechter camp better take with them their jar of Vaseline as well because they will surely need it...

[Wavist]

Iupani/lupani

Neely's (possible) new count is effectively the same as the standard Elliott count repeated endlessly since last year - a three wave decline beginning in 2000 with 'last year's' decline being Wave C. He complicates it by counting diametrics everywhere and not starting Wave C until September 08, ie the move from September 07 to August 08 he counts as part of the Wave B up from the 2002 bottom. His conclusion from this count is that Wave C has already bottomed back in March, however he still expects further volatile price action for another 5 years before the bear market will be truly over. Note - in Neowave moves are rarely counted as beginning and ending at the actual price high/low, however in practical terms this count says that the bottom is in for good after all.

[New ewaver]

This will be like 1929 plus 1987 plus the seventies combined according to veteran market magician rod prechter, his study of socionomical behavior bearswatching! One need onlylook at irans nukes, mtv music rudenesd, and a us congressman venting his anger at thepresident. Get ready forThe BEAR