Rat Poison
Rat Poison
That’s what I would call the tape of the past three months – I remember drawing some approximations of the nastiness looming ahead in late October and since then it’s been – well – interesting. Not fun – occasionally profitable – most definitely annoying – and I spent a lot of time just sitting and watching. Intermediate fourth waves are never fun – especially if they are preceded by a sharp second wave correction. Remember one basic EWT alternation rule I quoted a few weeks ago:
If wave two of an impulse is a sharp correction, expect wave four to be a sideways correction, and vice versa.
Sideways correction – indeed…
Anyway, I wish I could do an entire update tonight but I was meeting an associate and just got back an hour ago. So, I’ll have to do this telegram style – and although Tim joked that telegrams usually are the purveyors of bad news I think this one might be the exception. If you take out all the whipsaw of course…. and the fact that it’s expiration week…. and the constant threat of the PPT stepping in out the blue…. and…. you know what – never mind.
The good news is that we are nearing an inflection point. This consolidation has teased out a resolution for three months now and it’s finally time to either shit or get off the pot. We’ve got two contenders as elaborated on Monday – Mr. Green and Mr. Orange:
Mr. Green: We are in minute {3} of minor 3 of intermediate (5) and about to plunge into the abyss – no questions asked. There should be only a minor correction after which everyone including Cramer is heading for the hills.
Mr. Orange: A.k.a. the nasty one, a.k.a Mr. Tease-It-Out-For-Another-Ten-Days, a.k.a. the Triangle Of Doom, a.k.a. minor E of intermediate (4). Ya’ll know what this means – we might slide a bit lower, which is permissible but should not breach 741.02 – the November 21 lows. Followed by a rally back up to about 880. I know, made this one out to be all ominous but it’s actually my favorite as I get to reload yet once more.
Momentum was indecisive today but NYSE breadth remained in the bearish camp around 2.5:1.
What really surprised me was that CPC chart I posted earlier and which led me to cast doubts as to the potential for any significant near term downside in equities. These levels are pretty extreme and although they can push higher I wouldn’t expect that much pessimism so ‘early in the game’. I’m just not sure we have enough left to finally breach those November lows. Maybe I’m wrong – but it’s worth keeping an eye on.
Okay, I got one more chart before I have to catch some zeezz: Oh, you knew this was coming, didn’t you? Yes, it’s our old friend Gold again and I’m getting very excited for two reasons:
- It’s nearing it’s prior March 2008 highs.
- Cramer just gave it a buy recommendation today – a.k.a the ‘Kiss Of Death’ (thanks Joseph).
I think it has a few more points to the upside in it – but near the 1000 mark I will start loading up on GLD puts. Heck, maybe I even sell a few futures contracts – there’s no way I’m missing out on this one.
That’s all I got for tonight folks – sorry but it’s been a busy week for me. And you know I’m making up for it during the day.
See you tomorrow bright and early.
Cheers!
P.S.: Watch the RLs on the Zero chart – I think this has been a very insightful combo this week. I wish I could run it this way all the time.
