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Monday, January 23, 2012

Monday, 1/23/12 update

Equities continue to grind out the bull.........sausage. Bull markets have a way of grinding ever upwards and destroying all the bears in the process. And then, when the bears are exhausted - boom. This one is no exception.
Market hit a little air pocket today, but if my count is correct it's only the "a" wave of a 4th wave correction, with a 5th wave close by and yet another wave 4 - 5 sequence after that before a more significant top. Best guess as to current count (ES hourly bars):

ES 1368.75 was the high of last May and the ES is getting within spitting distance of that mark. There are two most possible alternates medium term IMHO. The first looks for a very significant top in the area of those May highs followed by a deep sell off, the second envisions an energizer bunny market. Doesn't seem to be a lot standing in the way of this market at this moment in time, so the bunny might be the correct read. But surprises are the way of the world, so hang loose.
Alternate #1

Alternate #2
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