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Wednesday, November 20, 2013

Elliott Wave Update ~ 20 November 2013

Social mood seems to be bursting lower in a some kind of wave three down if you look at the Presidential polling numbers. Yes Obamacare is quite the disaster, but social mood had already been in a downturn and thus the problems of Obamacare are quite amplified by the state of mood.

So there exists a major "disconnect" between current social mood and the stock market.  In Elliott Wave theory social mood turns first then economic results follow (to include stock market declines). So I would not hold my breath on a new market high however the wave count allows for it.

Hey its wedging also....
If the market has turned down, its impulsing nicely on even the micro scale. Even though I put a "i" and "ii" in there so far the overall wave pattern is merely a three for now.
Wilshire weekly is back under the upper channel. However the "time" factor between [W] and [Y] will occur next week.
Via Sentiment Trader, the "Smart Money" index has been selling into this rally for well over a year.
"Risk Appetite" is at an extreme.
And Elliott Wave International reported tonight that the Investor's Intelligence 4 week moving average of bulls divided by bulls plus bears has reached its highest level in 26 years.

So on one hand there is evidence of social mood is in a pissed off state (Presidential polling) and yet stocks are near a record high with a true extreme level of investor complacency. There is an extreme disconnect going on. Elliott Wave theory always suggests social mood will win out.

Based on the evidence at hand, there is a real risk to being heavy long in the stock market.
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