correction in progress

Profit Pivot

I'm sticking with the flat idea for right now.  There are definitely other alternatives, but this one appeals to me.  I'm postulating that 3 of C has completed.  I had mentioned 1115 /ES as a spot where a new count would be needed.  Above 1115, 3 is the shortest.  If we clear 1115 without a significant retrace then you have to assume that 3 is more extended than is depicted.  A retrace to near 1080 puts us near the 13day MA and sets up nicely for a five wave to complete the correction.

Bear if you Dare...

I can't buy the bear case here. I've been bullish for a little while, and it's all conforming to the hypothesis so far. I'm going to hold it to it until it doesn't.

The daily ES charts look very strong now. We just got our MACD buy signal, and price is resting on the 13 day MA. I think holding at or over the 13 day MA is a hold for any longs.

My hypothesis is primarily a flat from the 5/25 lows. There is a possibility for a zig-zag, but in the end I think it doesn't change the outcome much. A proper flat should take us above the recent highs around 1100, but would likely push higher into say 1150 or so.

I learned to count a long time ago, but never imagined it could lead to this!

With after hours



Without after hours

We'll Leave a Light on For Ya!

Whoever thinks that the moon moves the tides, but doesn't affect capital markets is walking blind. I made a chart of some of the recent action and placed labels for the lunar full and new moons on the daily bar chart. The 'O' is full and '@' is new. Not every occurrence signaled a turn, and they don't have a directional bias, but if a turn materializes near a lunar event, the thing to do would be respect it. Don't take my word for it, go look at it historically.

Full Count and I'm Swinging

So, if you frequent Kenny's then you might have been annoyed by my idiotic bite sized bull moo's. At first I just thought that it was funny as hell, and well, I still do. It's just that now I realize it's in the best interest of all parties for me to at least express my pending rally position.

First, let's start with a swing at the big picture.

First, my preference...



And the viable alternate...



Supporting the concern of a short term trend change, we have the VIX.



The VIX really seems to be a glaring sell on the daily basis. Notice the recurring pattern with the higher highs, but lower highs in the green vertical bars of the MACD. But don't be too bullish, the weekly and monthly are beginning to signal a VIX long term uptrend.

Another interesting look is the indexes on a daily basis.



Notice the recurring pattern again where the blue signal line does a 'double tap' against the yellow line, while the red vertical lines put in higher lows with lower lows in the index prices.

Bottom line, I'm still pretty scared of the size and breadth of the recent decline, but I don't think that wave 2 ever came out completely. It never seemed like people were doubting a downtrend. I'm looking for a wave 2 here and that's a shorting opportunity assuming we don't hit new highs.

Pick a number you say?... OK, so the point of this wave will be to really really really confuse EVERYBODY from counters, to TA's, to Talking Heads... that plus the thought that this might be an expanded flat, which has a powerful C wave, lets me say a number like 11,000 DOW. Sounds crazy huh? I know...

Quantum Theory and Wave Counts

Okay, I'm not losing my mind I'm just letting it off the leash.

Recently I've been pondering the Multiverse Theory and its implications on Elliott Wave Theory. At first I thought that at any point anything is possible, but after a little contemplation it became obvious that this is not the case. Imagine that your progress through time is like an ant crawling on a tree. You climb the trunk and at some point you decide to venture off onto a branch. Once you get onto that branch you can't get to another branch without leaping from one to the other, which is almost impossible for an ant to do. There are smaller branches off of that branch, but you will always be a part of the larger branch.

So this agrees with Elliott Wave, because when an event happens that forms one of these large branches, the event sets in motion an Elliott Wave that can express itself in many different variations, but the larger branch will ultimately be expressed.

Not a Triangle

This is really just a placeholder so I can link this picture...

IRREGULAR 2!!!

OK, so this carries a lot less conviction than some calls...


A lot of my concerns come from a play off of channel lines not only in price, but RSI also.


The rest of what I'm thinking, I'm going to keep in my back pocket.

What Everybody's Talking About...

So I'm going to post my thoughts on the waves that are rolling in, and no not the waves filled with oil hitting my precious gulf coast (there goes the post graduation vacation... although the Florida springs are better than the beach in some respects, plug for Ginnie Springs!).

I told you I couldn't wait to see... this is what I saw.



Here's a close-up of what I'm looking at for the past couple of days.



When you look at what happened on the 30th it's a little tough to say what has transpired. I've heard a 1-2 1-2, which sounds just fine to me. That would place us near a 3 of 3 of 3 situation which would rocket to the downside and be a nice little Birthday Present for me... that's right, May 3rd... presents appreciated.

Regardless of the squiggle count from the 30th, I would say that chances are excellent that we exceed the low from the 28th. I'm not ruling out an ABC correction as you can see.

Here are some charts that show the extreme bullishness, and the ever increasing possibility of declining index values.





On a lighter note...

This is why it will take months to close BP's leaking oil well.



But that's OK, there will be new jobs created studying gorilla's.