Intermediate Top Is In

I can almost comfortably say that after today's move we are done. It is not official until the yellow line is broken in the attached chart, but I really like my chances. I expect it to be broken on Monday's open. (I was only 1 day off on my turn date.)

Waiting for a pattern to show up such as this, has really been boring the last 5 months. This is called an ending diagonal and it is a terminal pattern. To verify it as such, it must retrace the whole pattern's move in less time than it took to make. (I would expect the full retrace in a 1/3 of the time)




Around the world SHTF once again. Fundamental traders will point to the last crash being caused by Greek riots. This one will be pinned on Egypt's riots. The charts tell me that these moves are inevitable. The Kingdome is broke and all our emporers have no clothes. I think most people have that nudging feeling in the back of their heads that things aren't as they seem, and will most likely get worse, much worse. The charts tell me that nudging feeling is justified.

In a manner similar to the end of August, I will be focusing my attention on the confluence area between 1120 to 1200 to determine if we have truly terminated the much larger move.





I believe we still reside within the last Hindenburg Omens confirmation. Probabilities are as follows:


A move greater than 5% to the downside after a confirmed Hindenburg Omen was historically 77% within 40 trading days.

The probability of a panic sellout was 41% within 40 trading days.

The probability of a major stock market crash was 24% within 40 trading days.


Like the last Hindenburg Omen showed, these are probabilities. The last intermediate top did satisfy the 5% decline, but it was not The Big One I have been hunting for.

We are approaching an Intermediate Top

When 1040 S&P held, I knew to watch for more upside. I knew it was going to take some time to find a new recognizable pattern, just didnt know it would take the rest of 2010. No way did I believe we would be putting in new highs. Wow!! Grats Cooper for his winnin bet. His prognostication definitely conquered mine in 2010.



The pattern shaping up now is a 5-wave ending diagonal. This pattern is pretty reliable. I have the intermediate top between here and 1300 before the end of the month. The way I will confirm the move is over, is by a break of the yellow bottom trendline. I can't nail down the exact time and date much better because the internal wave structure on the smaller time frames is unlike anything I have seen.



This area probably marks the 7th top call I have had in two years where I believe a stock market crash is possible. A second Hindenburg Omen was triggered a couple weeks ago as well. The one that no one believes in just might be the one that gets em.

Some people believe we are recovering. I am definitely not one of those people.