Target Practice

Finally we are getting somewhere and we now find ourselves in a trading range I can work with. We are close to a final show down between Soylent Green and Soylent Blue. Not that we care all that much anyway because the inevitable may only be delayed. And since we bears may have become a bit rusty since 2008 I’ll round the post off with some medium target practice – now that’s something you can sink your fangs in…

… like in bear’s fangs – get it? alright – I thought it was funny… whatever… tough crowd…

[amprotect=nonmember] Kick ass genetically enhanced wave count and bearish target practice below for anyone donning a secret decoder ring. The rest of you guys will have to wait until tomorrow – sorry. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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I have to concede that this afternoon’s drop surprised me a little as it happened a lot quicker and retraced a lot farther than I had anticipated. Technically however Soylent Green is still in play (that question kept coming up – you guys really need to start reading the blue book – geezzzz) and will remain so until 1042.17 (not a penny more) has been breached.

On the Soylent Blue side we pained one long ass a-b-c which looks better on the Dow IMNSHO. But today’s drop has increased its chances and we will also keep in as a top contender until 1077.74 (not a penny less) has been breached.

So, this now gives us a trading range of 35.57 handles on the SPX, which judging by the latest swings will be breached (one way or the other) probably by the Friday close, or tomorrow, or yesterday and nobody told us. I mean, who’s running this market in the first place – if it was me I’d pick a direction and stick with it – but nooo, we have to gyrate around like mad and drive everyone nuts. Talking about the myth of ‘efficient market theory’ 😉

As I’ve indicated in my teaser – it’s now time for some target practice. For one I want to give any bullish readers an idea of the magnitude of the now impending anal raping that’s looming just ahead. Second – a bit of bear p0rn hasn’t harmed anyone yet – and third I don’t have too many other interesting charts I care sharing tonight.

Alright, enough of the smack talk – let’s get serious for a moment. The little fib I drew on my Dow chart is an extension of what I now consider a pretty high probability Minor 1 wave off the very top. From there we project forward in fib increments as we would expect a third wave at this stage to extend in multiples of its preceding first wave. The first target I see is the 138.2% fib mark – which also lines up with the 75% mark of my old long term Dow channel stemming back from 2008 (a.k.a. the good ole’ days). See the chart below for an even longer term Dow chart featuring the entire channel plus large degree counts going back to 2005.

The second target is what’s traditionally an attractor for third waves – the 161.8% fib mark – aaah, we should be so lucky. And it’s dangerously close to my long term channel’s center line. Coincidence? I think… so! 😉

Here’s the long term Dow chart I promised. And maybe now you’re getting an idea of the magnitude of what’s ahead. Bear in mind that we are still only in Intermediate (1) – and the real fun doesn’t start until we push into Intermediate (3), probably late this year (depending on the velocity of what’s ahead of course). For an example look at the 2008 tape – and then compare Intermediate (1) ending in early 2008 with Intermediate (3). Yes – exactly – it boggles the mind.

Anyway, meanwhile in reality we are still fighting for final confirmation of Primary {3}. And part of that will be the breach of 1040 and then the 1000 line on the SPX. Until then we don’t know for sure just yet. But it’s looking promising thus far – every push up is getting sold and then of course is all that other evidence I have been quite prolific about in the past few weeks. I think the risk of holding a reasonable amount of long term puts as a hedge against impending doom and gloom is well worth the premium to be paid (which was very low just a few weeks ago).

I’ll finish off with a chart of Mr. VIX, who again closed above its 2.0 BB center line. I have been pointing toward this as a continued thorn in the consolidated eyes of the bulls. And that line is now starting to flatten out as it’s a 20 day Bollinger. Which means it will slowly stop rising – and that means that any hopes of ‘automatically’ falling below it and thus technically favoring less volatility are close to being squashed.

BTW, the Dollar is close to ending its current up leg – I will most likely talk about that tomorrow. Whether or not this will have an impact on equities is questionable. My money continues to follow the EUR/JPY.

Cheers,

Mole