That’s Far Enough Now

Sorry about the Zero outage rats – my rhythm is all mixed up so I somehow didn’t hear my alarm clock early this morning. And of course all hell broke loose while I was sawing wood in my sleeping coffin – well, the Zero is up and running again now.

Quick look at the tape: Frankly, this is probably as far as we want to see this counter wave go. Note the almost perfectly overlapping fib retracements – the one marked in orange is the23.6 multiple of wave {iii}, the one in yellow is the 50% multiple of the prior wave. There is also a nicely developing divergence on the Zero, so I’m adding a few more puts here but keeping some powder dry for the possibility of a push towards 1100 – as you all know this is still Anna’s favored scenario.

11:52am EDT: Here’s a chart we should reflect on as we push higher yet again today:

This is the very first time since 1995 that we painted more than 7 consecutive monthly highs in the NDX. Remember right at the beginning of September – which is traditionally a down month – we all expected this to be a down month? Now I just hopped over to the Slope (I like to go slummin’ sometimes) and T.K. is happy to kick September to the curb. So, are we expecting October to be an up month as well? Sure, why not – and according to the now ubiquitous  ‘almighty Fed controls the market theory’ November and December will then be up months as well, right? How about 2010 – that’s right – 12 more more months to the upside – perhaps the entire decade will be a long bullish love fest. Dow 20,000 – here we come!

Alright – sarcasm filter off: I’m staying short and will keep adding positions on every push up. Yes, I’m surprised we had seven successive months to the upside (btw – not on the DJI or SPX). You can call me chronically bearish but I am betting against an 8th or a 9th month. The short reprieve in mortgage resets which started in March (curious timing – mmmhhh) is about to end – let’s see how they like their green shoots when the housing market comes crashing down again.

1:18pm EDT: Good chance we push higher EOD – short term momos consolidated without giving up much of today’s push to the upside. Soylent Blue is gaining probability – especially in light of the current NYSE A/D ratio, which is at around 4.1 right now. If we get a Geronimo alert towards the close you know what to do (i.e. hedge yourself if you’re delta negative).