Tuesday, May 5, 2009

One more small leg...

I had such high hopes with this morning's sell off; however, the market had other things in mind. With the sell off contained, the market once again staged a late day come back.

With that in mind, here is my best count. In this case, we have one more high to put in. Likely it will be a throw over of the top trendline. I would say a great place to turn would be the 910-915 zone on the SPX. The top will be less than 940. The turn should be no later than this coming Monday and may coincide with the bank stress test announcements on Thursday. The turn could obviously come as early as tomorrow.

My next best count is that we ended in a simple a-b-c for the final leg and we will drop below today's lows within the first 60 min of tomorrow's session. I don't see this as the best wave structure, but certainly a possibility. Until we break the bottom trendline, we could just have some follow through from yesterday. If the selling stops in the 890 zone, then we will likely reverse higher.


  1. Just looked at the "projected" unemployment numbers and the March "revised" unemployment numbers. These numbers are as manipulated as the bank earnings! Getting tired of the lies.

  2. Take people like me. I'm a contractor and it may appear that I've got a job but I have no income from the business. The building industry is in the dumper. I agree, the figures don't accurately reflect the situation.

    That's why I have time to watch the market. I'm not working.

  3. The other thing to look at is the total number of jobs available and to look at percentage of jobs lost from the total.... We have about 650,000 fewer jobs available per month. So, of course the number will get smaller every month.

    I am a biochemist so maybe I am missing the point. How is bailing out the banks going to turn the economy around? Assuming a $4 trillion dollar bailout and 150,000,000 people in the US actually pay taxes. Now imagine if the Fed divided that evenly and sent a check for $26,000 to every tax payer.

    Sorry for rambling.

    great blog Rich...thanks much

  4. I hear you guys. This is the stuff that will fuel primary wave 3/C. One day everyone will realize the emperor (our gov't) has no clothes. They have wasted taxpayer dollars enriching the bankers. Earnings will continue to deteriorate. Unemployment will continue to rise. Foreclosures will continue. Lending will continue to contract. But we have to go through this optimistic phase, so that we can go down way past the March low. Be patient.

  5. rich,

    I read your comment every day. Thanks for your work. In most cases I agree with you.

    This is a SUPER SUPER SUPER BULL market.

  6. David,
    If you think this is a SUPER SUPER SUPER BULL market then you do not agree with Rich in most cases! You do not agree with him at all. :)

  7. David, LOL! This is a SUPER SUPER SUPER sucker rally. A year from now when we're sitting at DOW 5000 things will be much different.

  8. Dow 5000?

    We'll be lucky to be at DOW 4000.

    3500 is likely.

    Financial system is busted beyond repair. Needs a complete scrap and build a'la' JP Morgan (the original).


  9. Dave, hey I was trying not to scare anyone away, but the reality is that when primary wave 3/C is done we will definitely be lucky to be at the 4000 level.