Hi Mike:
My Preferred (most likely) Series, and the Alternate, have spent quite a few weeks shadowing one another. Now, finally, there seems to be some potential divergence emerging between the counts. As always, I will continue to use the Preferred as my trading "filter" until it is clearly wrong.
And it is the same Preferred, by and large, which I posted here a few weeks back. It continues to suggest a stomach-lurching drop into the basement.
The current limit lock on the S&P futures is 27 handles. If the elevator button gets smacked in earnest, it may feel like a freefall ... a mini-crash (double entendre intended).
However, I do NOT believe the flip-side of that coin will occur. In other words, no Alternate upcrash.
But if the stretchmarks ( see sellnow.net ) so successfully woven into the index, which followed the rate cut spike on Wednesday ... if that sideways shuffle continues for two more weeks, then, perhaps, an upcrash is possible.
Right now, too much smart money sits on short eggs. They hatch much lower than where we currently trade. They also hatch with wings. But before they take off, I still see 1030.00 Spoos, and perhaps even lower.
It will be interesting to see if the COT (Commitment of Traders) numbers out on Tuesday show the big, smart money covering their massive short positions in earnest. That could drag the Alternate Series into "most likely" position. But I do not think it will happen.
Here's a 50-min chart which updates the one from a 2-3 weeks ago. sellnow.net
The Alternate Series? Remember, I only put this "next most likely" series together because I like to know where the back door is, in case a bar room brawl breaks out.
It has been restructured with last week's action. It still confirms that the yearly lows are in place, registered on March 22nd in the S&Ps. But now it seems as if consolidation will occur, in order to set up a harder move to higher ground.
If we follow this Alternate series, the next few weeks will put a lot of folks to sleep. It will also let the smart money quietly and carefully shift its position from being short ... to being long.
So ... serious boredom over the next 8-10 trading sessions will suggest, to me, that an upcrash party has been arranged. The lows are in for the year.
No new highs in the offing, of course, because this remains a bull fake, in a long-term bear market.
But, if you start nodding off as prices meander in narrow ranges this week and next ... well ... we have all heard the cliché: "Never short a dull market."
Here's a 50-min chart for the Alternate. sellnow.net |
