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Monday, March 5, 2012

Elliott Wave Update ~ 5 March 2012

Update 8PM: Wilshire5000 and S&P500. Potential head and shoulders patterns in the making. Probably depends on if we get an up or at least neutral opening.
I am not one who complains the Fed manipulates markets.  After all, the PPT was put together just for this purpose. (yet they failed in 2008 huh?). Market manipulation (or the attempt at such) has always been a part of the "waves" in my view. We have all kinds of ways to filter out distortions and the "easy money" effect. For instance we can use the Dow/Gold ratio. Prechter likes to use the PPI ratio which produces effective waves.

Whatever the count, I am one who believes we are where we are because thats where we are supposed to be.  In other words I adhere to the principle of "the market is always right".

Last year, we had a peak in social mood which coincided with the stock market peak. Then over the summer of 2011 we had a very sharp downturn in social mood. This is not only reflected in the fact the country experienced negative public social mood displays such as the "Occupy Wall Street" movement, but other incidental indicators plunged such as Consumer Confidence and even the Presidential tracking poll. And of course stocks.

For whatever reason, social mood decided it must attempt yet another lurch to break out of the doldrums that has much of this country in the grips of.   So social mood is "testing" the 2011 peak.  The market is back to near the 2011 highs and its trying to make a true breakout in mood instead of wallowing in the lower range. 

Simply stated, I propose that social mood, after testing the 2011 peak, and soon to be unable to generate any more positive mood, will take a social mood turn for the worse for good.  And hence nominal prices will follow

It seems the public mood is in a state of cognitive dissonance. Its as if we know, that if we cannot manage a social mood upturn, all is lost. In other words we are near a "Ponzi recognition" moment in a sense. And literally of course. You have the ECB playing their games with money pools which of course they learned it from the FED. You have municipal pension funds borrowing from the very pension fund they are trying to make good! 

The SPX back to even only 900 will cause massive disruptions in the financial market place.  A market back toward 650 will break itself.  There is simply too much leverage in the system.  And now the leverage is sitting with all the Central Banks - or sovereigns if you prefer.  Who will bailout the Fed?   Yeah end game.

It is proposed that the Nasdaq100 has "thrust" out of an Intermediate wave (4) triangle of Primary wave [C] of cycle wave b.

If this count is true, and at the moment it certainly has a lot going for it, then this thrust move from December is a final move of the Nasdaq100 which appropriately nipped on 3000 for good measure.

If this is indeed a cycle wave peak for the NASDAQ100, then it postulates that the rest of the market will follow it down in cycle wave c.

Specifically the count of wave (5). It indeed counts clear. The tight upchannel has been broken.
Found via this Zero Hedge guest article, this Apple chart is quite interesting:
Wilshire perhaps has also started down unable to confirm its 2011 high.

You know the Occupy people are planning a big comeback in the Spring. Well its warmer out ya know?  There will be plenty of warm weather to support them for a long summer.

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