Tuesday, November 17, 2009

Could It Be This Simple?

From Prechter:

The blue-chip stock indexes appear very close to the start of a decline, if one did not already start today. The structure and strength of the decline will determine whether Primary 2 (circle) is complete or if it still retains upside potential.
Friday night we said, "The subdivisions of the rise would count best with a new high early next week, above Wednesday's high, but we'll see." The market's delivered today, with the Dow and S&P rising above last Wednesday's high in what has the earmarks of a fifth wave, an ending wave, from at least November 2. Today's 10,434.20 Dow high, as well as the 1113.68 S&P high, falls within the time frame and price parameters that we've been discussing throughout all of last week.
Kenny had a similar observation.  The five wave structure seems too easy.  Markets are rarely this easy and that is the one thing that concerns me about this count.  In hindsight we will see where the trap possibly was and the structure will reveal itself.

Elliott wave aside, the technical conditions and fundamentals are ripe for a reversal as well which is why I continue to be exposed to the short side, reasons discussed and listed in my previous post.

But because of the multiple traps that have been laid by the bulls I continue to be cautious in terms of my exposure and am ready to engage the bulls with plenty of ammunition to spare should they spring a surprise.

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