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Tuesday, June 25, 2013

Tuesday, 6/25/13 update



Buy signal today on Al's Indicator with a drop yesterday below 1.00 and a spike up (sort of) today back over 1.00.  However, the price action today was not encouraging, sort of a stumble up, not exactly what may be expected if this is the start of a new bull market leg.  So some confirmation in the form of a strong rally would certainly help solidify the indication, meanwhile caution is warranted.

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The long term bear alternate on this site labels the bull market since the Mar '09 lows as an "X" wave taking the form of a double zig-zag.



As can be seen, the current status of this count has a 4th wave in progress or just completed with a 5th wave yet to occur into a final and major long term top.
 However, Pretzel published a count today which has a major long term top at the recent highs of May 22nd, and that got me thinking.  Upon review, the "X" wave alternate shown here, although different than Pretzel's count, can also be viewed as putting in that major top on May 22nd:


Why consider this at this point in time?  Yes there's been some selling since the May highs, but so far that selling hasn't cut all that deep in the scheme of things.  But what is significant is the reason for that selling:  sudden fear of liquidity contraction.  Anybody with half a brain has to realize that world financial markets have been floating on a sea of central bank supplied liquidity.  A bubble, no doubt. And if that bubble deflates it's 2008 all over again.  So the rumblings from the Fed Reserve, and maybe more significantly, the possible unraveling of credit excesses in China are exactly the triggers to be expected for another massive bear market to occur. 

3 comments:

  1. hey Al, I continue to believe that what started as a corrective move could be morphing into an impulsive move. If this last retracement up, which is coming on the back of oversold on the 60 min. gets repelled at or near the backtest of the November broken support, then the alternate count which places the 5, C, Y on May 22nd will be confirmed and the next leg down should be a (iii) of [iii] completing wave 1 of the decline. Interestingly, this is the first decline since October of 2011 that is occurring with significant breadth breakdowns. Here is a link to something I posted yesterday. http://hindenburgcapital.blogspot.fr/2013/06/sign-of-times.html.

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  2. I hear you, and I'm as LT bearish as the next guy, but this morning it sure looks like an intermediate term low was put in on Monday - i.e. wave 4 low with wave 5 in progress. So Al's Indicator referenced above was a very good signal after all.
    Checked out your site, good stuff. You're happy with Stockcharts? I've never used them, but a lot of folks do.

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  3. I am also of two minds, and totally get the arguments in favour of an intermediate bottom, which by the way coincides with an intermediate bottom in EEM. And having a signal developed by someone of your authority unambiguously saying so, makes me even more so an uncommitted near-term bear. Think the coming few days will be critical in establishing the line of divide. I use a few systems. For the purpose of research, I think Stockcharts is the most complete and versatile tool. For screenings Finxiz Elite is good. Hope you have a profitable week, speak soon. Alex

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