The recent tiny bounces in the charts has hit the various forms of the near overhead resistance we've talked about. In some of the index charts, it is very close -- as in any price rise of 1% would hit it. There just isn't any room here for price to rise without taking it out.
Then, you look at charts like the small- and mid-cap indices and they sure look like they are just building some jello in a 'iv' wave, basis the May high. These charts, like tech too, are still above the Jan/March lows, and I do not think that holds for much longer. At Friday's low, the Nasdaq Composite was 2.2% drop away from hitting its March low.
I am happy still to be on the sidelines now for a week and a half or so, but if I had to say, I think we need the flush to setup a great, brief (weeks to a couple of months), sharp rally; a rally I want to be long for.
After said long, after the rally slows down, what do we do then? I think this is the most important question facing us (this thread) and it has implications for making or losing a lot of money. It is a question far more important than our previous grappling with the May highs bull trap.
We continue to hit oddities in measures and signals that folks track to look for a turn -- you know, an extraordinary signal here and a sentiment extreme here -- all of which has worked in recent years to setup a move on the long side. It continues not to work. It might be "different this time", but I bet it is not -- so, we continue to wonder, where is the fear and the capitulation?
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Just lean back and think on one last thing... What if I am right and we are doing the "big C" here? When was the last time any of us saw a move like an impulsive 'C' down in the timeframe of months? Likely, never. If you believe even the basics of Elliott, then we know what those waves are supposed to feel like. I think the trouble lies in believing it. |
