Transcendental Market Fragments:
S&P 500:
SPX shows what is an almost-complete diagonal triangle, fifth of a fifth rally nearly complete. If this count is correct, the entire countertrend bear market rally from the March lows is essentially over, with only the details of the final high to be worked out (1017?). It also implies that a devastatingly large wave 3 (or C) to the downside may be about to kickoff.
I shall know soon whether this is it or not.
Dow Industrials:
The pattern in the Dow Industrials is essentially the same.
The coincidence of this topping pattern in the stock market with the bottoming pattern in the Dollar Index confirms that a major turn in the trend is about to take place.
US Dollar:
Only 3% of traders are bullish the dollar right now. Talk about a crowded room! Anybody who even hints at a bottom in the dollar could set off a stampede to the exits amongst the dollar shorts.
The Dollar Index is as close to a bottom in its correction as the stock market is to a top.
The Market:
There are no uncorrelated investments nowadays due to the much abused financial system, which has been turned into a toy of the Wall Street financiers. As they transformed the markets into their lucrative playhouse, they have systematically destroyed the basis for the real economy, which remains a shambles dependent upon government stimulus payments to function.
But, where do stimulus payments come from? The government is simply borrowing or printing the money to stimulate the economy. Without real production underlying the economy, this is a system which is bound to blow up. I suspect that the bankers miscalculated and have lost control. As they desperately try to regain control of the economy, they cast ever-wider bubbles. But, the die is cast and the next big decline could be a larger wave 3 (with the wave down from the October 2007 high to the March low only a wave 1) that carries the market to unthinkable levels so far as most people think.. Financial bubbles and their aftermath are bad enough, but when the entire full faith and credit of world governments is bound in the recovery of a radically-flawed financial system, that system's ultimate failure is likely to be a huge shockwave to those governments.
Bottom Line:
Events are building to a crescendo here and the market is closing in on a momentous turn. |
