Tuesday, September 15, 2009

Was that the top?

Well, today's price action fulfilled all of my upside targets and patterns. The sell off at the end of the day also fit nicely in the puzzle. What we need now is price confirmation tomorrow.

So what I have today are the charts on lots of timeframes. We have divergences showing up across the board from weekly to minutes. We have sentiment indicators that haven't been this bullish since the October 2007 top. We have great news coming out almost every day; i.e. retail sales up, the recession is over, etc. and the market hasn't been able to get any momentum going. The bulls are sitting fat and content. The bears are nearly extinct. It seems like a perfect time to go 100% short. I will, however, won't be adding to my current short positions until I get price confirmation.

Here's the longterm chart with the primary wave 1 and (crossing fingers) 2 labels.

And the daily chart...

And the hourly chart. It is interesting to see a common relationship with these last waves of y=w*.382. The bear rally has seen a consistently strong first push (a & w waves) with considerably weak 2nd pushes (c & y waves).

And finally, the 5 min chart. So far a very clearly marked ending diaganol.


  1. About time to step away from the trees and look at the forest don't you think. As in 2003, Prechter has grossly underestimated the FED's ability to not only hold this mkt up, but grow it. Don't you think?

  2. Are you kidding me? All I look at is the forest. In order to put this market into a new bull market, the fed will have to create a bubble bigger than housing with consumers and banks being willing participants to borrow and lend. The forest is that we had an impulsive move down off of the 2007 high. The current move has been one in response to the US Dollar. If the dollar craters then the US is in real trouble. If the dollar strengthens then the stock market is in trouble. I still believe that the dollare will evenutally strengthen as more and more debt gets written off. Until then all I can do is chart the price action. Since we never violated my key levels, it shouldn't be a surprise that the market continues up. I'm not. But when it cracks, it will break and I will be there to profit from it.

  3. Sorry Rich, that was out of line. Not suggesting new bull though, just that FED has over shot this thing and I'm sure making it worse, but I am suggesting it could last a lot longer, because people are stupid. Do you watch the news? ha