Thursday, September 12, 2013


The high for the W3 is in and the bearish action today looks like a normal consolidation before another push up. However, this W4 has been very shallow so far so I wouldn't be surprised if we are going to have a similar scenario to earlier this year where we had a series of W4's before finally topping at 1687. As I've been saying for the past few days, as long as the bearish catalysts are seemingly under control (Syria and Fed tapering), the path of least resistance is up as not only the US economy but the world economy seems to be gaining traction. Ideally, the world would enter into a period similar to 2005-07 where the world economy was running on all cylinders. I remember there was an issue from The Economist about what could possibly go wrong at that time given how seemingly great the economy was.. Then came 2008 and we all know what happened. So if we do indeed enter into this "good" period again it will line up well with the long term count and perhaps we won't see another recession until 2015-16? just in time for a Fib retrace of the entire wave from the 2009 SP500 666 low. Best imo is to be fully invested in the markets while the long term trend is up.

I ended up selling the VXX position for coffee money, for 2-3 cups of coffee literally. I was hoping for a 10-15 drop but the market had a hard time doing even that. So no point in fighting the short term trend until the 5th wave appears targeting the all time high.

Main S&P 500 Trends*

Short Term Trend = Bullish
Medium Term Trend = Bearish trend being challenged
Long Term Trend = Bullish

* Trends are not trade signals. Trends are posted for situational awareness only and does not take into account wave counts, technical or fundamental conditions of the market. While mechanically trading the posted trends is feasible, keep in mind that these are lagging indicators and as such are prone to whipsaws and I personally do not use nor recommend them to initiate or close positions in the market without taking into consideration other factors.

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