Wednesday, 3/14/12 update

Quite obviously the Minor W4 low in the ES was last Tuesday (Mar 6). So a Minor Wave 5 is in progress. Two alternates at this point:

Alternate #1

Alternate #2

This 5th wave looks like it has a bit farther to go. With that in mind, equities are pretty overbought on a medium term basis, also sentiment is at bullish extremes (see last nights post on the VIX) and the US$ continues to rally, so the nod has to go to Alternate #1. But keep in mind that saying: the market can stay irrational a lot longer than you can stay solvent.