It’s Coming…

I’m about to turn in but wanted to share a few more charts with you rats before I turn into a pumpkin:

So here’s the good news: I think we’re getting close and even this extended bull excursion will soon join the Olympic cliff diving team. The bad news is that the current wave count still looks incomplete – I have a hard time counting it as a five and it’s very well possible that we might get a small four down and then a final blast to the upside which would push us to the 940 – 960 region. As the wave pattern is compressing all this should however complete by the end of Friday.

The count right now (the blue line) appears to be Minor 3 of Intermediate (C) of Primary {2}. Either that or we completed (C) of {2} today which would bestow us with a healthy serving of Soilent Green. That scenario in itself leaves a few doors open at this stage. Theoretically it could be the beginning of Primary {3} but I seriously doubt the bears will get off that easy. Most likely it’ll be a deep retracement we’ll count as (X) which will be followed by a final zigzag to the upside ending at 1000 or higher. Other combination are possible and we’ll have to evaluate things as they unfold. But the message to take home here is that we’ve come a long way – 27% in the SPX in a mere two months. But we’ve done so in a very short amount of time and I find it very unlikely that a 500 day Primary {1} will be corrected by a 60 day Primary {2}. Not impossible, but unlikely. Of course I could be wrong – and I do hope that I am on this one.

For the record: There is still the possibility that we are in Scenario XX – which would mean that we painted a large flat and just completed Intermediate (4) of Primary {1} of Cycle wave c. I have left that old count on my charts but won’t give it any credence unless we take out 740 – and that’s a long long way to go…

I posted this chart in my wrap up and wanted to include it here again because I think it’s important. The VIX has almost dropped to the 30 line and that’s a significant distance from where we were just two months ago. The 2.0 Bollinger Band has been observed almost religiously in the past two years and probabilities now point to a reversal here – again rather sooner than later. This was the sole reason why I dared to jump into puts today – although I have to admit it was a small position. I take my liberties here and there but I’m not a glutton for punishment.

Gold has overstayed its welcome a long time ago and I’m pretty glad that I decided to cut my GLD puts two days ago. I am still holding a small butterfly and will probably dump this thing tomorrow afternoon unless I see a significant drop. We often arrive at a stage where we need to question whether a particular instrument is worth the trouble trading at that moment in time. Right now things are very ambiguous in Gold and I also don’t like the pattern I’m seeing in Silver, which is painting some very motive looking waves. So barring any major developments tomorrow or Friday at the very latest I’m going to switch into neutral mode on our precious metals.

I leave you with this – because I can:

Cheers,

Mole