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Thursday, November 11, 2010

Elliott Wave Update ~ 11 November [Update 6:15PM]

[Update 6:15PM: Bonds. 30 year getting frisky. I added a wave count to the chart.  You can see 5 waves up on the 30 and probably the 10 year yields.  I don't think of short term rates leading the long, I rather think long term rates now lead the short. In that case, this great multi-year non-confirmation in lows would imply the 30 year will lead the shorter durations higher. This is opposite thinking somewhat than what has been drilled into our heads. 

And why is that we assume short duration yields are the "leader"? Because 30 YR yields have always followed lower in the 30 year bond bull market. But not yet this time so far. The late 2008 lows in the 10 and 30 have not been met.

I don't know why, but every time I think of 30 year bonds I think of the Stephen King based movie "The Langoliers"

"The plane takes off, and as they fly the passengers see that the rest of the land falls apart, leaving a formless, black void. "

Hence, the 30 year may be peeling away the Ponzi leaving a formless, black void.

Thus, a rising-yield deflationary collapse.  Higher interest rates spark massive debt destruction via defaults, let alone the amount of derivative blowups in the interest rate swap market that makes everything else look like child's play. The Fed could afford to monetize $600B because thats a drop in the bucket of the amount of debt destruction right around the corner. Yet they may have used up their political capital in this "QE2" and will certainly take most of  the blame and be a major scapegoat (and not unfounded either).  Too bad.

The Fed's days are numbered.
[Update 5:15 PM: Playing above the Supercycle channel line. The one thing that has me wondering is if the DJIA drops below this line, previously this line has marked the start of at least 3 very bearish selloffs this year.   So I'll be watching this closely.  I'm certainly not married to the Minor 4-5 count.....Buyer beware. Like the overall NYAD chart, this  chart, and its Supercycle line, is key to mapping the Ponzi....]
[Update 5:07PM]
Dollar update.  The rebound has some decent zing to it. And so far, it did do a false break under the trendline  which I kind of expected.
NYAD update Which is I think the key code to the entire Ponzi....
If the weekly can end down tomorrow, I can get my wave 4 "bump" visible on this chart.
BIDU and its triangles

Primary count is that wave (b) of [a] of Minor 4 is playing out in the form of a flat or triangle. Accordingly, then a (c) wave that takes prices lower would occur.

Looking for an eventual move toward the base channel line.

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