Tuesday, January 1, 2013

Bullish Count

 

Any deal is market positive in my opinion.  I tend to agree with republicans that in order to reduce the debt, spending cuts are the only solution.  It would seem that the path we are on involves a default or an attempt to inflate away the debt.  After all, do we really have the balls to fire government employees and terminate government contracts?  We already have a weak economy, imagine one without cushy government jobs.  Just imagine...

Should we get a deal tomorrow, the above count is how I see it.  There's some fancy dancy math to guestimate a region for a top which is somewhere between 1467 and 1546.  The top limit is based on the rule that the "third wave" can't bee the shortest in an impulse.  I have this counted correctively as a-b-c-d-e, but it's the same form as ending diagonal.  The bottom limit of 1467 is taken from the observation that the ratio of 206/351 is close to the fib .618 so multiplying 206 by .618 and adding to the local low at 1340 gives us the limit 1467.  I would say we hit this "e" target in the first quarter, maybe January or February. 
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