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Thursday, September 2, 2010

Elliott Wave Update ~ 2 September

This is an exciting time in the market. We are proposing basically that the Grand Head and Shoulders pattern which stretches back some 10 years is making its final right shoulder move on the far end.

We have an NYAD chart that is reaching all time highs yet again despite the market being some 4000 Dow points off its all time peak back in 2007. Additionally it is working on forming a double divergence since the April market peak.

We have so many "all or nothing" breadth days since April, that most market technicians have rendered them virtually meaningless. But they do have meaning: The market is herding at the greatest degree ever on not only a monthly basis, but a minute to minute basis. 

Despite a world wide debt bomb Ponzi that is tick-tick-ticking away and leverage is getting worse,  we have a market that thinks it can levitate forever. For forever it must, because any move below 1000 SPX will likely start the dominoes to fall.   When the tide finally goes out, the stinky oyster bed of fraud will be exposed more and more to the sun and those that must answer for it will be forced to speak. And that means the Fed, the US Treasury and the TBTF banks - their collusion will not last forever. Social mood will see to that.

We have a yield curve in bonds that may be sputtering. The 30 year is no where near matching its 2008 low despite the low end making new lows.  I call that a plain old divergence that may mark the end of the 3 decade old rise of bonds.  Japan? No way - If the tide goes out on equities and bonds even a modest bit, the debt leverage will BLOW UP.

The squeeze right now is just that - a big squeeze. Like all bear squeezes the compliant media accomplices help it along. A flushing of the build-up of bears over the last month is occurring. How much needs to be squeezed and how long it will last and what exact form it will take is why we try to count waves. 

When its done squeezing and no more buyers come in - and no more bears are left to squeeze - the market will be bidless yet again ala May 6th.
The RUT looks pretty good:
Coming upon the downtrend line(s).  
The primary count as best as I can see it for now:
This is a simple chart - and a simple proposition - failure for all to match new lows (yield) will mark the end of the 3 decade old bond run.
This market is like an empty shell that is void of mom and pop.  What happened to mom and pop? Well they need money - so they are cashing out and paying off debt. The rest went and finally bought bonds this past year.  And they will be pillaged yet again.....

And the mood will get more sour still....
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