I like your count, and Velo's wider timeframe counts. I'm totally convinced that the *real* bubble peak should be dated to September 2000, not the Dung high. TrimTabs also notes this, that the total market capitalization for US equities peaked then, not March. Many, many leading stocks share this pattern, with the ultimate top in Sept. 2000, followed by three waves down, a zig-zag, lasting until April 2001. Everything from April until the January high is a great big flat B, most obvious again in some of the gigacaps. Anybody waiting for something else to go with the rally off the September lows will be sorely disappointed; that bottom is part of a running flat, which explains why we shot out of it as sharply as we did. I think a minor headfake low would have happened without 9/11, and this just skewed it downward. The monetary authority panic that followed produced the violence of the short-covering rally. That is now done.
We have, since the January highs, a wave 1 down, followed by a corrective wave 2 up, most visible in SOX. That wave 2 hit A=C just this afternoon, and we should now launch into a more violent downleg targeting the October flat lows.
Mututal fund cash is below 5%. Equity fund flows are non-existent, even in seasonally favorable periods (see TrimTabs). Corporate insiders aren't backing up any of this bottom-slapping with their money. Pension rebalancing is over. And Greenboink has stopped pumping rates ever lower than the free market would have them, meaning money supply growth is stalling. The free market is incapable of creating liquidity on its own in the present state, and only did so thanks to force-feeding by AG. Now, with AG backing off, it's free market time.
I've removed the safety from the big "S" button. Time to lock and load...
(There, that should produce a great big short-covering rally!)
BC |
