Thursday Coin Toss

Tomorrow is going to be painful and boring – just so you know – I for one plan to catch up on my beauty sleep. So unless you are being paid to sit around all day bored to tears just take the day off and start the weekend early. But for your intrepid die-hards here’s tomorrow’s chart:

Right now the numbers of possible scenarios are frankly outside the realm of what I would call a ‘tradeable market’. EWT rules permit various interpretations of where we might be heading:

Orange: We are in Minor 2 of Intermediate (1) of Primary {3} – or – in Minor X of Intermediate (X) of Primary {2} [in purple] – the path would be identical. Reversal should be around 950 mark (A/C equality). The 956 high should not be breached.

Green: We completed Minor X of Intermediate (X) of Primary {2} today [I know this sounds complex and it is]. We should now drop into an A-B-C decline (i.e. a zigzag) which should get us to 850sih.

Blue: We are in Minute {iii} of Minor A of Intermediate (Z) of Primary {2}. The 888 low should not be breached.

As a side note: For the past two months we have been trapped inside a 70 point range spanning from 880 to 950. Quite frankly, damn the wave count at this point – LOL – unless we finally breach either 880 or 957 (the current high) we are going to be stuck in this rut for who knows how long. My conservative approach of not shorting the market anywhere except the very top has paid off very nicely so far as I have been shielded from potentially painful losses.

I know many of you are greatly convinced as to where we are heading next but I must tell you that I do not share your level of confidence. Picking a direction in such a heavily manipulated market is dangerous at best and possibly devastating to your portfolio. Be careful – don’t bet the farm. The tape of the past two months has defied gravity and any attempt by the bears to bring about a much needed correction has been met by strong (artificial) resistance. It will take a inflection point to break this tape – or perhaps a massive dislocation due to a complete lack of liquidity.

As Joe Saluzzi said the other day:

“I have a feeling one day the door is gonna close, everyone is going to be running for the exits, there is going to be a major move in the market and everyone is going to wonder “what happened?”

There is a problem structurally in the equity markets that nobody wants to talk about. There is intervention, there is manipulation going on. No one has exact proof of what is going on but it’s out there, and the real liquidity has been gone for a while. People don’t understand, the liquidity is not coming back.”

While I agree with him in terms of market manipulation that ‘Bozo the Clown comment’ was completely uncalled for. I think he should stick with trading the markets – never good to mix politics and invest….. oh… you know what – never mind :-}

I also don’t like where the Dollar has been heading in the past few days – probabilities now point towards a 5th wave to the downside – unless we pull up hard and that soon. You all know I’m not a strong correlation guy but the ‘bias’ in that case would be towards more bullish tape in equities and commodities.

Finally – don’t expect any type of resolution during tomorrow’s session – as I said – tomorrow is most likely going to resemble Chinese water torture.

Cheers,

Mole