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« Canadian Real Estate Imploding? | Main | Peak Debt »

Wednesday, July 07, 2010


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Yelnick, why you think we we shall see a more complex correction that continues into early August. For 50% or 60% retracement level, it seems not far away. As for the duration, according to STU count, the Minute wave i of Minor 3 down only last few days. Won't the existing Minute wave ii rebounce complete within few days?


Monster - there are certain time cycles that point upward right now. One is the solunar model, another is the Bradley model. I follow the former on a loose basis and attempt to correlate them with my spiral calendar projections. I'm afraid all of them point toward a summer of pain for the bears. Hope this helps a little.

Mr. Panic

That chart above looks almost identical to the June 1930 stock chart. Look how today closed in relation to the gap from 6-28. Daneric has a June 1930 chart on a weekend post from May 15.


well just about everyone has beaten me to it but my system finally generated a multi-week buy this morning. A pullback here should be a good opportunity to increase long exposure.


MoleCool: what is the "solunar model", i.e. where is it published or discussed?


The Bradley Cycle's correlation with equity prices over the last several years is horrible... it is mediocre at best.


You would have thought Vancouver real estate is cratering if mainsteam media is your only source. Well, the last few transactions tell a different story.

Well. I am not seeing it in the Dunbar area on Vancouver West. Where the heck is the drop??? Permabears, care to answer me????

Jun 18 – 2.3M over 1.99 listed for 60 lot

Jun 16 – 1.65M over 1.588 listed for 50 lot

Jun 15 – 1.1M under 1.18M listed for 33 lot

Jun 14 – 1.71 over 1.69 listed for 50 lot

Jun 16 – 1.65M over 1.58 listed for 50 lot

Jun 2 – 1.3M under 1.49 listed for 60 lot – oldtimer

Jun 2 – 1.21M over 1.19 listed for 33 lot

May 28 – 1.28M under 1.38M lised for 33 lot on 16AVE

May 25 – 1.85 over 1.79M listed for 60 lot

May 25 – 1.19 at 1.19M listed for 33 lot – oldtimer

May 18 – 1.75M over 1.69M listed for 60 lot – oldtimer

May 16 – 1.46M under 1.49M listed for 33 lot

May 17 – 2.33M under2.38M listed for 33 lot

May 14 – 1.61 over 1.59 listed for 50 lot

May 13- 1.31 under 1.35 listed or 33 lot – oldtimer


1071 SPX gap closed.

Mamma Boom Boom

Any patriots out there?

Mamma Boom Boom

JT, should put out an audio version of your message. If everyone is as blind as you think they are, how could they read it?

Cary Lloyd

ugh, that song hurt my ears dude

need some earth wind and fire to try to heal them


Monster, on a multiweek rally, I have no strong indicators just some hints: too many bears in AAII sentiment, great volume to the upside last two days, short term s=cycles bottoming. The wave structure counts as 1-2 off the top in April to a secondary top at Sp1131, then a wave i of 3 down ending last week and a wave ii bounce underway. The bounce so far can be counted as an ABC flat, with C breaking as 5 waves, and could be almost over (give it a few more days), so no clear guidance on timing from the wave structure. So my position is speculation. Over may years of watching Mother Market, she likes to fool, and a sideways July would fool both sides the most.

Account Deleted

Dow Jones finding resistance at 50% fib retrace levels


Watch out for July 12, Wave 3 down of C1. 800-1000 points. Bradley turn date today, which will be a top. I am opposite of STU, which would work out great!

vipul garg

nice one mamma .


"JT, should put out an audio version of your message. If everyone is as blind as you think they are, how could they read it?" - Mamma

Given how BULLISH you've been as the S&P cratered from 1070 down to 1010,(constantly posting day after day about your impending low coming in the market) my guess is that you have no idea what you're doing . . . and are simply yet another "wannabee-trader" college kid enjoying Internet notoriety on a stock market blog.

If I am wrong (and your absurd profile photo isn't reflective of the "kid" that you are) and you are actually an Adult, it must really suck having to derive your self-esteem from an anonymous message board on the Internet superhighway.

Cheers Mate!



Exactly what are you expecting from the Vancouver RE market in the next 12 to 24 months? You haven't told us.

Shouldn't price follow volume? Or are you saying Garth Turner is making these stats up?

"In case you missed the news, house sales in the country’s hot markets have crashed. Last month, down 30% in Vancouver, off 23% in the GTA, weaker by 42% in Calgary and fading 37% in Edmonton. Right on sked. The agenda I laid out some months ago: Listings pop first (late Spring), followed by Maalox-gulping sales reductions (summer), then by the din of tumbling prices (frost) and finally the growing spectre of a US-style, multi-year slow melt.

You seem to be a real estate perma bull? State your case.




At what point does Hochberg revert back to yet another "alternative" count"??? Does he even have one at this point?

If this is a (2) of [3] counter-trend "bounce", at what point does Hochberg throw in the towel and admit that he's wrong again?

Does he revert to an "alternate" count if the SPY retraces more than .618 of (1) at 108.58 SPY?

Off this morning's opening, we hit the 50% target at 107.16 SPY.

And if he does revert to an "alternate" count, what do you think it would be?



Thoughts from JD Rosendahl:

5. Should we enter a severe deflation/depression, how do you plan to manage the money? Would you simply stay in cash for example or continue to short stocks?

This might be the question of the year, maybe decade. As I manage my parent's wealth, we've been running a deflationary investment model since 2003 and continue to do so. Personally, I think we are already in a deflationary period. It's just being masked by government intervention and spin. Whether the stock market high in April 2010 is the high or not, is totally irrelevant in the context of a deflationary cycle.

Trading for my parents is a small part of their wealth management because I believe the following is the most important:

If you have wealth now, your wealth will explode in the future not by growing it, but by keeping it while all most everyone else loses theirs. We've already seen this happen the past few years. That's a sad thought, but the majority of people aren't going to believe we are already in deflation until we hit bottom and they are broke. That's just human nature. When I told family, friends and clients in 2003-2005 to unload real estate and buy gold, they all thought I was institutionally crazy.

Under our deflationary model there's a concept I keep preaching: Get as much money out of the financial system as possible. At the bottom of deflation, when the biggest deals on stocks and real estate are available, you won't be able to go to the bank, broker, or insurance company and get all of your money out. The system will be so broken, the bank will have to ration deposits to clients. This doesn't even consider the risk that you might actually lose money inside the financial system. Thought: How many insurance annuities have used investor money to make commercial real estate loans? We have no idea the risk in annuity portfolios, because they are not regulated like banks.

We have and are continually moving money outside of the financial system. First, I have recommended they own a modestly (very modest) valued home free and clear, with no debt. No debt means you actually own it with no ties to a lender, and that's wealth outside of the financial system. Obviously, the physical ownership of gold and silver bars is a part of this strategy. We also house our metals in a vault off-site, and that's money outside the financial system.

We also believe in short term treasuries. We are actively looking to open an account with Treasury Direct, as a way of owning some treasuries outside of the financial system. We will probably stagger our maturities in a laddered portfolio.

Lastly, and the most interesting part of our deflationary bunker is the use or ownership of Mattress Money. It's not really money stored in a mattress, I just like that term. We have money vaulted off-site, which is also money outside the system.

Currently, we look to add to our Treasury position and our Mattress Money, and decrease funds held inside the bank, broker, and insurance company. We have already eliminated funds held at insurance companies. We now seek to reduce bank and brokerage balance.
On the other hand, I guess we could all go out and buy Vancouver RE.



Silver lead and food. Take up hunting, fishing, and gardening.


Michael, his alt count from last Fri is what we are in now. He thought it more likely we had a wave 4 and then 5 down before wave (i) ended; but it appears that it ended last Thurs. The current wave ii should go 50-62% but it could go all the way back to just under Sp1131. We will have to see how it develops to make predictions. It hit 50% this morning and has dropped from that, but in a slow sloppy corrective drop which suggests the main trend is still up.

I think your criticism of Hochberg is off. I do not lay out all the nuance in STUs - that is reserved for subscribers. I would recommend anyone trading off Hochberg advice go to the source. Last Friday he laid out the possibility of wave ii starting already:

"The indexes appear to need at least a fifth wave to a new low to complete five waves down from the Minor wave 2 high, which we will then label Minute wave i (circle). The next two potential downside areas to watch are 988-994 and 960-970 in the S&P. In the Dow, these ranges are 9410-9454 and 9190-9258. Lower potential exists. 

"The top alternate count is that today's lows mark the end of Minute wave i (circle), a five wave decline from the Minor wave 2 highs. This would imply a bounce for several days to correct the preceding impulse wave. If the market delivers this bounce, it should present a great opportunity for the bears. 

"Conclusion: Don't fight a third-wave decline by trying to pick a short-term low. The downside potential remains large."

Mr. Panic

Currently, the DeMark wave count is still Wave 3. If the indices either close above the June 25 close or close tomorrow higher that today or yesterday's close then wave 3 ends which would make this quite an unusual wave 3 (from June 21 high SP 1132 to 1010 July 1st low---by the way we hit the 50% retrace today which I am sure chartanalyst will update anyways), making it much shorter in length than DeMark Wave 1 although Perl, the DeMark author, indicates they don't have a problem with wave 3s being shorter than Wave 1 (I do though). So its do or die time again but my favorite cycle suggests the bearish scenario shall prevail.

Mamma Boom Boom

Shaping up quite bullish. If this thing would hit an air pocket and drop to 1027, tomorrow, that would be the set-up that I'm looking for.

Roger D.

Time to go short, it's all bear from here on.

Roger D.


RogerD, you cant be serious? Its a 2 day long wedge...

Roger D.

Oh yes I am!


How are those 1s and 2s working out?


I don't have the ability to predict the future. I am just pointing out that real estate is a local thing. What I listed out is all the recent transactions on the Vancouver West side and it's not adhering to what the general stats are pointing to. Yup. The overall vancouver housing market is pointing to a slowdown and Sales/Listing is slowing down as well.

But, I am pointing out to you regions in Vancouver that are not trending with the overall trend. The greater Vancouver (which includes Vancouver, Richmond, Burnaby, Coquitlam, etc) are showing weakness. But, if you just focus on the Vancouver core region (especially the West side), it is not showing an iota of weakness yet and no real estate bears can deny that since those are real transactions prices and most are still selling over listing prices.

Account Deleted

Dow Jones analysis after closing bell


Whitebear, in the US the areas with 'normal' mortgages and quality economics (like Palo Alto CA) have maintained value even as the areas with subprime mortgages and rapid new developments (riverside county, near LA), or Vegas) have fallen off the cliff. It is always so. In Australia the properties on Sydney Harbor should not move much if they fall at all; but the developments in sketchier areas are apparently falling. What has surprised some pundits in the US is the fall in prices of condos in otherwise buoyant areas in cities; but we saw that in the '80s as well: 'condos are forever" became a tagline of gallows humor for their owners. The general fall in prices masks local variation.


I've seen some signs that high end real estate has fared the worst lately, specifically high end condos - the lower maintenance costs appeal to the speculators at the peak and then the banks as inventory that can be carried with lower maintenance and security risk in foreclosure. Those that are well off enough to afford a high end mortgage are generally smart enough to avoid the market once it turns even if the banks aren't. Many high end condo's at the Ritz Carlton in Baltimore were auctioned off last week at a 50% haircut from their initial price.



I have no problem accepting what you are saying and in fact agree completely. It is always a supply and demand situation. The area you speak of has limited supply and demand (high end stuff) is not impacted by the economy as much I suspect.

Good luck with it.


hello Duncan

in this post you provide wave 4 statistics by Zoran:

was the wave 4 retracement computed as a percentage
of wave 3
as a percentage of the drop from the top of wave 1 ?

thank you


bob m

Any patriots out there?

Yeah but can she TRADE?


Hi Yelnick
leading diagonals tend to have 5 wave substructures ? yes or no ?
the problem i see is there is 2 many 3's in this decline since
the april peak .
if the dow can hold below the june highs? wouldnt it be
easier and clean to count this present move off the july lows
a "B" wave ?
i see the expanded flat also as someone here has already noted .
but my thoughts are the decline to date are this is just one large
complex wave . A B C into the may lows an X wave into the june high's
another A B C down into july 2nd and this another B wave up .
this would then make the case for a 5 wave move down in C once this
B wave is finished . i have serious questions to this being bearish if
the market jumps above the june high's and my reasoning while somewhat
speculative comes from the 120 month moving average ( 10 year average )
from the peak in 2000 into the 2002 low the 120 month moving average
on the dow was the bottom . on this last decline from 2007 to 2009
the dow broken below the 120 month moving average and then the down fell further
and went down to test the 240 month moving average ( 20 yr moving average )
the 20 year moving average doesnt get hit all that often if you look back
over the past 80 years you can see for yourself . with everyone looking
at the 200 day moving average i think we should also look at the 50 week moving
average and the 120 month moving average . they all sit above the market .
this may sound odd but take a look at the simple 200 day moving average
along with the 200 day moving average yet based on high low close /3
and look what happens when it crosses .
the 240 month moving average is now sitting at 8100 on the dow
yet the 120 month moving average is above the present price of the dow
the wave count if im just going to be honest is total slop and sloppy counts
tend to be 3 wave moves . a triple 3 or complex a b c is the best count as i see it .
A B C X ( june high's ) A ( july low ) this would be B ?
more sideways into early august would make sense however mid to late july
would be just fine . in fact between july 16th to aug 1 there is several
time based relationships that would call for a top .
we are not really all that far away price wise for a top and we are not
really all that far away time wise for a top . but i think trying to get
to detailed with a 5 wave count is for the most part foolish , because
i just dont see anything the resembles a clean 5 wave count ,
this means there is no wave 2 either but a wave B .
i think hochberg tends to count 5's when there is 3's . i have seen him
do it to many times.
nuff said


Steven737, wave 4 retrace probabilities is from wave 3


Joe, an LD breaks as 53535 whereas an ED breaks as 33333.

If this summer rally goes above the June high at Sp1131 then this is not a nested 1-2 and i-ii of 3 as STU counts. Possibly the correction after the first wave down is still on as an expanded flat. Likely endpoint would be the 62% retrace of he first wave down or Sp1151 area.

The whole move off the Apr21 top could become corrective of a continuation of the Hope Rally although that would stress a lot of technical indicators since we broke below Sp1045, the Feb low.

Mamma Boom Boom

>Yeah but can she TRADE?

Posted by: bob m | Thursday, July 08, 2010 at 05:55 PM<

What jew got to trade?



I am glad I sold my townhouse in Richmond in February. I may have left some money on the table, but not much. I believe prices peaked on average in April.

Anyone buying those Dunbar listings you have shown should have their head(s) examined. They will be in a world of pain before all is said and done.

Wave Rust

assume in 20 years, everyone sees march '09 to april '10 as a screwed up P1. for a 13 month up, it is not very probable that it would be corrected by only a 45 day correction of only 38%.

it doesn't mean crash II because it will take a few more months to really get all the bulls through the slaughterhouse and into the meat packing plant.

like maybe until May 2011


Yelnick, thank God someone finally wrote what the Fed had been doing. I have been on this information since they did it and there is still a shortage of bank funds internationally. This essay by a couple of BIS economists is a little complex, but the gist of it is pretty clear, there is a shortage of good collateral for cash between banks.

What people are missing is bank assets aren't in anyones account. So, when a bank cashes a mortgage or a treasury with the Fed and receives the funds, these funds are evidenced by money that was already credited to customers accounts and results in no new lending. Banks had been using various financial innovations to cover up the fact they didn't have cash, like jumbo CD's, commercial paper, where the market froze up and the funds were being channeled through off balance sheet money market funds and various swap derivatives. Much of the dollar liabilities were within European banks and many of their assets were not tradable at anywhere near par, because the system lacked cash and the quality of these assets had declined.

I believe the fly in the sugar bowl was Citi and to some extent BAC. Between the 2 of them, they had interbank liabilities in the range of $700 billion, from what I can recall from their summer 2007 financials. The statement on CNBC that banks were afraid to lend to each other could have been somewhat simplified to banks were afraid to lend to Citi. If you recall, the entire Fed balance sheet was under $1 trillion at the time and most of that was not in the banking system, but in hiding in countries around the world where people have enough sense not to trust their banks. That left an entire interbank money supply that was based, not on liquid assets, but on various interbank liablities where there was very little actual cash.

In the end, the banks were already liable for the money the Fed gave them. There was no new money as the money was already owed to other banks or to their customers. If it was other banks, they were already liable this money.

The entire game is based on the idea that banks have to reserve this money. This should be true because money migrates between banks and customers want cash from time to time. But, the real constraint on banks is their capacity to act as surety for credit, which is a net worth or capital position. The capital position of the banking system is worse than they are letting on and the Fed effort was in large part to allow banks to cash bad checks between them. Negative net worth can be covered up for some time with the capacity to clear checks. There are millions doing it today.


Mannfm11, great comment! I strongly recommend everyone wishing to understand the $1T increase in reserves and why it is not inflationary to read this comment. It simply centralizes in the Fed existing obligations. Thanks for sharing!

Mortgage Brokers in Vancouver

Now I understand the 1$T increase in reserves and why it is not inflationary. Thanks to this post it is very informative.

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