Wednesday, January 13, 2010

Can It Continue To Run?

I just don't see it topping here, not yet. I see all the counts and hear everyone. I am one of the few that have not called a top yet and for some reason can't bite here.

Daily SPX -Chart, don't fail me now! Pink boxes to black cycle lines. Peak in the center, fall, rise to higher high and then fall to cycle low. Volatility has left since what I am calling the last cycle low and so has volume. So, do we trend out one last time? I'm guessing we set a NT low with one last higher high (courtesy of everything Biderman mentioned in his last report) and then Cycle to the next low in march. I'm prognosticating that this next higher high will be the last and by the time you see another cycle line farther out on this chart the bottom of 1 of 3 will be it. Since I have also prognosticated that it would take something "external" to rip the market from the manipulators that means that something bad may have to happen between now and March.

Weekly SPX chart - The RSI is all I need to see. I'm waiting on that threndline to crack just the way it did when P1 ended. See that yellow box? RSI can run along way from here not to mention the divergence has been lost to price.

Monthly SPX - I see nothing here that says top either. RSI 5, ROC and S Sto maybe, but I do expect this chart to turn abruptly at some point in the near future. I like that red upper TL in this chart.

Call me a nut, but I just do not see it technically. I'll say it again, you all know I am a massive permabear and want it to turn as bad as the rest of you. I'm not all that keen on the 1214 I have been pointing to for some time, but I am thinking one more higher high before she lets go.

My thought on earnings. They are cyclical, but the analysts blew it this time. Normally we go thru what I call an earnings trough where everything bottoms and future estimates are set at easily attainable numbers. This is an old trick the BD's use to prop up markets and garner revenues. That worked well for a couple of quarters. Well, this may be the last quarter of attainable earnings. They may have overshot on some of the revised estimates from the green shoots they were smoking about a year ago. What recovery will be the question of the day. Lowered estimates are coming and that will not be received well by anyone. Why do you think insider selling has been so rampant for the past three months? They know what's coming, but the BD's want you in the game so the pump and dump can continue.

The blame game is already starting. When the house divides (and it will this election season), I'm guessing the government after realizing everything they have done was wrong, will meet gridlock. They will be afraid to do anything. The people will be in the streets sooner than later and this country will resemble some third world nation running a muck for about a year. Kent State part two? It is gonna be scary I think. Will someone (Geitner) get hung out to dry? I think so. I actually think it is possible that the O may not make it his whole term when all of the GS/Fed/Treasury/Banking fiasco finally all gets aired out and it will.

As for the economy, do you want me to rehash all of the problems we are facing (or how about the global economy)? A while ago I was ending posts with one simple word - konichiwa - cause we are the next Japan. If we ever do dig our way out of this hole, it won't be anytime soon. It will be a long cold winter.

Will we get a P3? I think so. Will we set new lows? I think so. Remember I have predicted at least two market closures on this next fall. I do not think we ever "capitulated" last time. I know you may think I am nuts for not looking to call a top here, but the market is all they have left between them and total collapse/anarchy. They have done everything they can to make it the only game in town if you wanted any returns. I believe Biderman. I believe they have manipulated a majority of the rally since April.

If I am wrong and the top is in, so be it. Maybe EWT gets it right this time (3rd or 4th shot at calling a top - I forget). I'm not long much at this time and what's left is all protected in various ways. I'm not liking the 1214 to 1230 area as much as a few weeks ago and may lower that number to 1170 to 1180. If that wedge does crack here, it targets to 851 which nails thee 61.8% retracement and support. Maybe that is a nice stopping pint for 1 of 3 (ouch!).

I'm really just gonna wait for that weekly RSI to cross the TL. That should do it.


GL out there.