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Tuesday, February 1, 2011

Tuesday, After the Close!!!

This could be a very important development, the SPX closed OUTSIDE of the Bollinger bands today, I marked all the previous spots where the SPX broke out of the bands on the daily chart, odds are good, that this will quickly reverse as it has in the past.
This is a very sad day, watching what happened to the Dollar, down $1.14 on the day and now VERY close to breaking the trendline of support, which opens the doors for a major sell-off in the Dollar. $70.70 IS the all-time low in the Dollar, and if Ben gets his way, we will soon be living in Hyper-inflation. Although the Equities markets would explode to the upside in a 3 of 3 up scenario, life for the average American will become a living Hell, if you have a job, your raises, if any, will not keep up with inflation, and if you are on a fixed income, as the unemployed and our retirees are, then you will be royally screwed as food and energy prices sky-rocket. I would rather go through the experience of a P3 down, and get it over with, so we can build a solid foundation in our economy for sustainable future growth, rather then living thru Hyper-Inflation, because this does not correct any of the long-term problems and the poor really get the short-end of the stick.
Just to add insult to injure, Apart posted this hot off of the press story from Reuters right before the close in our chat-room;

Fed's Hoenig says QE3 "may get discussed"-MNSI
Feb 1 (Reuters) - The Federal Reserve could debate extending its bond-buying program beyond June if U.S. economic data prove weaker than policymakers expect, Kansas City Fed President Thomas Hoenig said.
Another round of bond buying "may get discussed" if the numbers look "disappointing," Hoenig told Market News International in an interview published on Tuesday.

Now they are talking about QE3, what a bunch of clueless idiots who are mandated to control inflation thru monetary policy, but cannot even do that using the correct data. The numbers they are using for Inflation are MINUS Food and Energy, WAKE-UP!!!!
Food and Energy are sky-rocketing!!!!
The Dow Theory of Non-confirmation remains in play, with a major divergence going on between the DOW, and the DOW Transports, if the Transports can not make new highs, the longer-term picture remains bearish according to this Theory.
We are now back to where we were last week, the SPX and the DOW making new highs, while the RUT, NDX, BKX, and the TRANS continue on with their divergences. The squiggle count posted first thing this morning is playing out as it was suppose too, with the SPX working on an impulsive wave up, currently now in the 4th wave(black). This opens the door for a green open tomorrow, IF the futures markets do not put the 5th wave in over-hours.
The internals were pretty good today, with Breadth closing at 4.67:1, advancers on 1.08B shares, of which 87.39% was "Buy" volume. The Bulls were definitely strong today, counter-reacting the Bearish numbers posted on Friday.
After this 5th wave wraps-up, then we are down to three main options, another set of 3-4's, Yuk, that I have NO idea how they would fit into the larger picture at this point, this 5th wave(black) up being only the top of a 1st wave of 5 up, with a small sell-off for the 2nd wave down coming very soon. This option really worries me because this 5th wave(Red) is now at the point of lasting too long, and traveling too far compared with the 1st and 3rd wave (Red) in the bigger picture. The third and last option would be a sell-off that would correct this current rally that started back near the beginning of December at a minimum with possibilities of even a larger sell-off covering the entire rally.
The Trend Finder II has been updated, with Silver going bullish today, also of note, the bearish signals on the major equities are getting very weak, and could switch over to bullish signals if we have follow-thru tomorrow.
-How "Unrest in Egypt" Made the Financial Media Look Ridiculous


  1. yep, either we go to DOW 35000....and 1% of the population will control 99% of the wealth

    or, we go to DOW 3000....with a more equal outcome for all, but in this case, the "elite" loses the most

    I am pretty confident we will get P3....but unsure from what level it starts

    Personally, for the health of our little planet, P3 down would be the best todays consumption patterns are simply unsustaibale and will lead to human's self-destruction

  2. agnes, I believe the 'elites' (Bernanke and his chosen group of first receivers) will utterly destroy society in a futile attempt to save themselves. It is happening right before our eyes yet so many cannot see.

  3. Well, all the doomsayers have been calling for a P3 for a couple of years. Yet here we are at 1300. And what will they say at 1420? And what when the market is still rising in Spring 2013?

    To be fair, this is clearly a bull market based initially on stimulus - but these things can be self-healing, which is clearly what the Fed hopes will happen.

    It's likely to be wrong this time - and the market will almost certainly revisit the 666 low - but not before it's seen 1420 and not before Spring 2013.

  4. Michael I hope you won't mind me pointing out that on your SPX chart with green channels, small blue wave 'i' will be 1.618 times at 1320.