MIA But Not Out

I didn’t have an opportunity to post during the session today but wanted to share a few thoughts with you ahead of tomorrow’s session.

Clearly the bears got burned today and that OPX gangsta style. The tape ramped all day and there was nothing but fear and short covering among the bears. NYSE A/D ratio closed at 4.7, the highest reading since November 10th. So, just looking at the momentum chances are we are already tracing out Minor 2 of Intermediate (1) – or worse 😉

The ‘good news’ for the bears is that we should get confirmation very soon. I’m currently counting a zigzag followed by a flat. Look at that fib I painted from the bottom of my x wave. Traditionally the maximum length permitted for the c wave of a flat is 165% of its a wave. What’s really interesting about this Maginot line (look it up) is that I actually had drawn this fib during the session – way before we touched it at the close – funny how that works out sometimes.

If this is really some type of alternation (EWT speak for a combination of various corrective waves separated by an x wave) then it should stop in its track right now and here. If we push much higher chances are now increasingly pointing towards the Minor 2 scenario. Again, this is merely academic for anyone holding long term puts right now. Just so you know what you are dealing with: A Minor 2 wave can correct almost all the way to the prior high, which would be 1,150.41 – so theoretically we could push to 1,150.40 and the current count would be maintained. The second we run beyond that the entire Primary {3} scenario goes out of the window and it’s back to the drawing board for the bears yet again.

But it’s way too early to worry about that. The Dollar has been digging in its heels and conversely the Euro has been lagging the advance we’ve seen in equities. Therefore the odds still point to either Soylent Orange or Soylent Blue – pick your poison.

Early retracements can be violent and scare off the bears hoping to ride the wave down – and in the end lure them into giving up long term positions. This is part of the game and if you don’t have the brass balls to ride this out then you’re going to be left behind sooner or later.

But yes – we can’t keep running like this forever – would be good to see this thing slow down and that soon. Especially since the time cycle has now shifted downwards again – if we are starting to break away from that and there is follow through to this rally then the bears might be in trouble. I would have preferred to not see a new high for the year in the NYSE A/D department – that’s a bit concerning. Let’s keep that in mind as we run through the rest of OPX week.

Cheers,

Mole