Tough Choice

Tonight I find myself between a rock and a hard place. The wave count right now appars quite clear – we seem to have completed an {a}-{b}-{c} and are now completing Minor C of Intermediate (Y) of Primary {2} – this scenario is marked in orange labels on the chart:

However, it just looks too easy and smells like a big trap for the bulls. All the momentum indicators suggest that we should be dropping but in contrast the NYSE A/D ratio was pretty bullish in the past few days – nothing really makes sense, as it should close to the peak of a bear market rally.

Personally, I myself do not feel confident about any of the bearish scenarios that are floating around out in the EWT blogosphere, but I do recognize the potential that, wave count be damned, we might just suddenly drop tomorrow. I usually never do this but tonight I decided to also show Steven Hochberg’s counts (he’s the author of the Short Term Update and resident editor at EWI) – his is labeled in blue. Basically Steven prognosticates that we painted a flat after the September 25 low, which completed today and that would mean that we’re now ready to drop into a long third wave. So, his count would be that we are in Minute {ii} of Minor 1 of Intermediate (1) of Primary wave {3}.

I deeply respect Steven and it pains me to say this, but I think his count is a stretch at best. Also, the Dollar’s drop today did not help the bearish cause and I have a hard time believing that this market will turn before the Dollar finds at least a temporary floor – thus far the wave pattern on the ole’ buck looks incomplete and we could easily drop below 75 before we finally push into a meaningful rally.

There is a third scenario which I didn’t paint on this chart as I didn’t want to spoil your breakfast. That one assumes that the drop to 1019.95 was another (X) and that we are about to paint another A-B-C. Yes, that’s right – very bullish – and we would basically be lifted into the stratosphere. But at this point this scenario is sci-fi – but it’s worthwhile mentioning.

Here are the good news: In regards to Orange vs. Blue we should know very soon – perhaps even by tomorrow. On the chart above I have pointed out the confirmation lines for each scenario. As you can see the orange doesn’t have that far to go.

Finally, I have a bid of bad news of you stainless steel rats. I’m going to be gone on a business trip again – this time starting Monday night all the way through Thursday night. Which means I will not be blogging (much) – Berk will hold the fort and poke in every once in a while to make sure you guys don’t get too rowdy. We all love his charts and I’m sure by the end of the week you won’t even remember who that Mole character is. As General Charles DeGaulle once remarked: The graveyards are full of indispensable men.

See you on the other side.

Mole