Pause is Suspect!!!

As I have been discussing all of August, a pause between 1040 and 1080 on the S&P would be suspect. Not too surprising then that we would gap down to 1040 on a Friday morning and then see a ramp job on little volume into the close.

We are at another decision point. Monday and Tuesday should define where we are at. If we head up I will be forced to close my shorts. If we head down, I will be a part of a very suprising and damaging 3 of 3 down. I am shockingly on the fence.

Hindenburg Omen Confirmed!!!

If wikipedia has a definition, it must be true. :P


http://en.wikipedia.org/wiki/Hindenburg_Omen


I will let you do your own reading on that. It is quite the mouthful.







Here are my two Elliott Wave count preferences. I am suspect in this 1040 t 1080 range and can't tell you much until we get out of it. No sense in micro managing this count here, as to be prooved a fool. The sell off has been considerably weak so far, which makes me quite reserved. Another move up, with a drop in the VIX to lower put option prices would be fantastic. And from a historical perspective, owning October Puts would definitely be in my favor. ;) We all know it gets very interesting when the real money is done with their vacations.

Winner Winner, Chicken Dinner

I was going to wait until we rolled over in the market before posting again. FOMC today provided a pump, but it was very much weaker than I had expected. I am hoping we rise tomorrow, Thursday, and Friday to my 1140 target. Over night futures and EUR/JPY tell me that we may roll over early, and I wont be fully loaded. QQ



The real reason for my post generates from www.Seattlebubble.com :



We just had the lowest July closing sales in 10 years. I am sure someone will try to paint this as a good thing, but it is really not. I will be looking for a home in December or January, but I am a little scared to grab a falling knife. If State layoffs start rolling around, I just might not be willing to grab.

On Schedule

We appear to be on schedule for the 1140 push. Options expiration is this week and will probably expire most Put options worthless........yet again. I think everyone knows what is around the corner, but making money has been quite difficult.

Once again I am posting hourly charts over a 90 day period. I do chart on smaller time frames, but posting the smaller time frames confuses most readers. If you look at the chart from the start of July, you can get a feel for the "energy" involved in every swing. These later swings are dissipating the last of the energy for this run.

The last of the push up will probably occur this week. I have two counts at the moment. One is an Ending Diagonal, and the other is a standard ABC corrective wave. Real confirmation of these counts only exists on the bottom trendline breaks. When this pattern completes it should be quite obvious.

I will hesitate in the 1040 to 1080 range because another count could turn this move from the July bottom into a zig-zag. I will be buying September Puts on Triple leveraged Bulls this week. I am hoping to get them cheap with the spike into the 1140 range. My friend is looking for SPY puts with a strike of $110 in the $0.50 area, near the spike. A falling VIX into Monday and Tuesday should make for some good options deals.

Some people ask why I am so Bearish. One reason really, its our insoluable interest problem. Too much debt and not enough income. We are at or nearing the location where we can't even attack the principle of our debt. The banks are leveraged to the hilt with depreciating assets, thus increasing their leverage arms and forcing the collapse of available credit. (residential and commercial real estate)

If you believe our Government creates our money, you are very wrong. Our banks do. They create money out of thin air, using debt, and the "promise to repay." If you care to understand the truth, please watch the 5 video part series:

http://www.youtube.com/watch?v=NiENaQMwzDY