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Monday, February 14, 2011

Elliott Wave Update ~ 14 February

I have now heard endless streams of wisdom on how the market will continue to melt up and that nothing matters but the Fed for the last 8 weeks or more. The level of FED worship is quite one-sided. Even the most hearty of bears is watching their every move and blaming the melt-up on the FED.

Can any bull submit an original comment other than the "FED won't let the market drop?"

Well someone thinks that may not be true. Via Sentiment Trader,  the "smart" money dropped to only 25% and the "dumb" money hit over 71% again. A spread worth taking note.  I may be bearish, but I am in good company.  Again, so be it.

I continue to take the stance that the FED is quite in a quandary and there is no way out for them.  They have committed their balance sheet to a massive dose of debt. Yet as Prechter says, they cannot possibly cover all the bad debt out there. Nor can they continue to endlessly buy Treasury debt. Even BB warned it cannot last forever.

Even the heartiest of bulls will admit its all just about momentum. There is not one bull who would seriously argue that we are not in a Ponzi scenario. The bulls are bullish because prices have gone up.  The comments I hear on the blog are like a broken record.  And many are now more than eager to buy any serious dip.

Can it continue? Sure. Will it end? Yes.

We have again reached a point where the wave structure suggests we are close to counting a wave v of (v) of [v] of 5 of (C) high.  The harder the market stretches the rubber band, the bigger the drop may be.

Proposed Minute [v]
A variation on (v)
Proposed Minor 5
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