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Friday, July 27, 2012

Elliott Wave Update ~ 27 July 2012 [Update 7:53PM]

[Update 7:53PM]
1. The most troubling aspect of all the Fed "buying" (that I never see mentioned anywhere) is that the Federal Reserve has a "claim" to at least almost 20% of the United States and by 2014 that could be as high as 25%. By buying more MBS - open-ended no less - the FED may just wind up being your landlord.  If the shit hits the fan like I think it will, the Federal Reserve will simply take possession of whats on their books.  How did it go from a bank with nothing to owning 25% of the United States in 100 years? Yet we continue to be clueless and they count on that. Does no one see this for what it is? I posit that social mood will win out in the end and the Fed has sewn the seeds of its own destruction.

2.  Regardless, I tend to think that the Fed did panic today. They basically bet big and went "all in". After all, how much more can you expect now that debt purchases have been declared as "open-ended"? When do you stop front-running? When it is a one-sided traded is my guess. We are about there.

Me and Mish are not the only ones who think it shows panic today. Ron Paul does too.

3. Another Zero Hedge link and this one on the hubris of Ben Bernanke and the stated intentions to affect social mood to stimulate the economy. This snippet pointed out by Zero Hedge is just amazing in its honesty by Big Ben to finally admit what they are trying to do.  They are trying to goose social mood! He said it outright in several ways. He is trying to blow a housing bubble (damn the middle class who has to pay 4-5-6 times price/income ratio). He said it!

Who knew Ben was such an advocate of social mood to affect markets? We knew Greenspan was a bit of one. But Ben? However the hubris comes in here in spades.  That they think they can manipulate social mood is like thinking they can play God or bypass Nature's Laws.  A top tick moment above the wedgeline to make this admission? Is Ben now comfortable with the apparent trend that he feels ok to open up like this and admit this?

The market has spoken. Minor 2 is still on and the ascending triangle turned out to be correct. Congrats bulls. Even the 1390 mark that a lot of people have chattered about was about touched.

Measured move target for Wilshire 5000:

Slight negative divergence on the NYAD line:
SPX daily:
NASDAQ 100 (and composite) has not yet confirmed the move of the DJIA and S&P500.
GDOW at a mere 38% retrace of the March high.
Transports have not confirmed either:

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