I warned about a month ago the market is tracing its finals moves of Primary Wave 2 (black 2). I believe those final traces will complete over the next 5 trading days, if they have not already. Here are the charts that support my analysis. I would take profits on longs and prepare for a severe market fall in the coming months and perhaps years. I firmly expect the S&P to visit 400 before 1100.
$SPX 5-Minute
$SPX Daily (Note: on a log scale, the bear market trendline is 20 points above where the markets trades now)
For more on Elliot Wave Analysis and count details, please visit the site of ex-StockTocker DanEric40 at Daneric’s Elliot Waves. Consider this post my final warning to take profits on longs and prepare for a fall of historic proportions. I don’t know exactly what events will cause this fall, but selling will represent a lack of faith in the systems of the economy, including but not limited to corporate debt, government debt, the Federal Reserve system, the paper currency system, etc.
Here’s the long-term $SPX Weekly chart by DanEric that I agree with. In bear markets, wave C’s are generally much nastier than A waves. This wave C is no exception.
For EW Notation, click here.
Swanging….i hope
Thanks Craig, always appreciate when you can take the time to do a post.
Craig – I respect your opinion a lot. Better to be cautious. Technically, the market does look tired and traders are starting to sell the rallies. Some of the leading indicators like Baltic Dry Index and Shanghai index are showing weaknesses.
What do you think the catalyst will be that takes the market down. We have completed a strong Q2 earning season. Companies like Intel and Dell are announcing positive earning suprises. There is too much noise about economy improving. I think this rally may stall and there may be a shallow pullback. Either Q3 or Q4 earnings season may be the catalyst.
This is a manipulated, rigged market with the gov’t and PPT stepping up to foil any major decline. In the treasury market, the govt front runs then backstops treasury bond/bill sales, Government Sachs front runs and then back stops the stock market. Weakness is met by “mysterious buying”, you flood the system with enough money, buying power overwhelms common sense (look at AIG, C and LEHX). And this can go on for months, even years. The game is rigged Craig, P2 may not “end” until we see 30,000.
Good luck trying to have that discussion on ST. Doctrinaire permabulls control the discussions here and have run off all the the quality bears. You will find stiff opposition to the premise that GS acts as a proxy arm of the PPT or even that the “PPT” itself exists. It’s incredible really given how self-obvious it is but there you go. I’ve pretty much given up trying to dialog on this site and moved over to Zero Hedge, Kenny, Xtrends, and other sites where I can interact with like-minded people who are not living in Fantasyland. But I still check in from time to time, just to see what’s going on.
When you say “quality bears”, are you referring to the posters who were suggesting short positions during this entire rally from early March? You know, the guys whose advice (if taken) would have produced huge losses during what should have been one of the easiest times to make huge sums of money ever! Those guys were not only completely wrong, they were completely inflexible (which is a horrible trait to have as a trader).
I agree with morris. Many here lost a GOLDEN opportunity to make some serious $s
By all means then please keep listening to him.
I agree with Randall….if the Fed is allowed to print at will this market will not go down much and will probably continue to go up to new highs. The Medicare program is in debt for $38 trillion so why not another $38 trillion thrown at the market. Obama wants the Fed to have more powers and congress is asleep and has no clue so higher highs are coming imo. Does anyone have a factual coherent rebutal?
^ What he said
I haven’t been a bear for a while. September is a different season. I don’t think we will have a large correction. That being said I do expect one. The recent volume was quite light. There have been many divergences recently. The BDI is a good example. Shanghai is down 5% again tonight. These divergences cannot persist. There are few bears left. I would be willing to be that there weren’t many bears left in China before that correction. Now that market is down over 20%. September is correction month.
dadams,
The action since March is the correction.
I would not count on the BDI as a bear indicator. It may be one of the last sectors to rally…
Idan is gone from Stock Tock? Did I read that correctly?
For more on Elliot Wave Analysis and count details, please visit the site of ex-StockTocker DanEric40 at Daneric’s Elliot Waves.
Why u spreading rumors?
Or have u banned him or have some deep personal insight the rest of world is not
privy to?
Craig, your target as 400 means total failure of this government which I am disagree with you. Correction will come but to 400 noway in next couple years.
Ignore that #7, I should have been reading more clearly.
Craig,
easy to refer to your ‘warning’ about a month ago without posting a link to your post warning. That was the same one where you said you bought FAZ at 5.05 and planned on holding it for a couple months because it was a no branier. Since then, it reversed split 10:1 and then dropped by 60%. Can you post a link that original warning post where you also mentioned FAZ please?
I remember that post
Where is Shanky, S135 and Mohan nowadays?
The bears were a bit early… They forgot that stocks moves in waves..
As per cycle theory, cycles last 1/2 to 1/3 the length of larger cycles.
Since the bear started in fall 2007.. and ended in spring 2009 .. 18 months long..
the bull will last 1/2 to 1/3 that..
9 months to 6 months..
that is why I think either september will be the top.. or dec/january.
Craig,
As always I appreciate your post however feel as if I must serve my research up as well. As mentioned in previous comments, the Government has stepped in to take control of a free falling market and thus has given the financial backing that it need to avoid a swan dive like you are suggesting. In this current market environment, it seems incredibly unlikely that the market will be “allowed” to have the downside pressure on it to see any where close to 400. Think about what got us to 666, The possibility of a DEPRESSION. That is now out of the way, the economy, while not good, is showing signs of a global slow recovery and the markets, while manipulated, are in fact receiving large institutional investments that creates huge support. A retrace , yes …. to 400 no way.
MO
Getting to 666 S&P was short selling waves, no one for a minute believed or thunk for a minute that the world would end.
What caused the tokyo markets to confirm the same patterns ? Was it a major bankruptcy of Toyota or Honda? No, the same guys driving the markets to the moon
panic and run for the door. . . . when goldie can’t manipulate up, its short time and yet
another gov’t bailout or handout.
Unlike the USeless markets, Japan produces stuff other than debt and still has not been
able to get out from under the weight of itself.
Good luck all, depression and collapse is not off the table, accounting changes and little benny bernananke have hidden the obvious by punishing savers and giving bonuses to billionaire oil traders. Hmmmmm. . . . Ja-pan tried the EXACT SAME
THING. . . how’d it work for them?
He still lives?
Thanks Craig.
As your first chart shows.. it reinforces my cycle theory.. [http://www.stocktock.com/wp-content/uploads/2009/08/spx-8-30-09.png]
that the peak will be first/second week of september.
we still have 1 more upwave IMO if we want us to peak.
If we suddenly drop into first week of september.. i would be cautious as a bear.. remember we want extreme optimism before a crash.. therefore one fast and quick rally to 1080 (woo’s targets) would be great for the bears…….