A recall on our Dollar calls...

I've been wanting to make this post for quite sometime.

A post with our track record on the USD calls and how right we, here at myBullmarket, have been regarding the USD. We have spotted all the big moves and turning points in anticipation, sometimes MONTHS ahead.

I am of course proud of these calls, but one shouldn't take himself too seriously on these occasions. Anyhow here's a graph with our calls for the past 1.5 years:

Luckily we have been right for the most part or at all big turning points. Happily for us of course. Now where to?

Well, as I posted back then my belief was once we reached the 1.40 level we would resume our trend to the downside, so now it's anyone's guess where the Euro will go. My belief again is that ultimately we will breach the 1.20 level once again, but first things first... Before that I think in the short term we will visit the 1.25 level and the EURUSD is currently at the 1.34'ish level.

I will later make a follow-through post on this matter about the USD and also other stuff such as our LMP Portfolio (which has been pretty much flat during the past few months due to our hedged position) and some other topics.

Seat tight and enjoy.

Return of the Jedi

Hello everyone,

After a long hiatus due to professional reasons I am back... and in force I hope. I also endured a little surgery not too long ago, but this has also passed by. The reasons are not to be alarming but nonetheless I will still have to undergo surgery one more time in a couple months but then all is set.

There is so much to talk about that I don't even know where to start. The markets in terms of the stock markets have been pretty much range bound since the last time I posted. But in the commodities arena... my oh my... there are some beauties out there... but also don't forget that beauties can turn into ugly monsters in a matter of an instant at times.

One of those beauties is SILVER.

Silver has exploded up high for the past few weeks, and lucky me I was on board for most part of when the breakout took place. But it bothers me... the pace of the rise has been pretty much parabolic and sentiment among traders in silver is sky high at 98% !! This means only 2% believe silver will go down in the future...

You, as long time readers of myBullmarket, know that when the majority is on the wagon it's usually when this one derails off course.

Silver looks to be such case... in a blow off top manner, these type of movements end in only one way, the spectacular rise gives turn  to a spectacular downfall as well...

I know I know... "Oh but the FED is printing billions after billions... silver will go through the roof with so much printing". While the FED may be printing like there's no tomorrow, I'm a firm believer that markets ultimately will go wherever they want to, with FED or no FED... remember last year when everyone was advocating the downfall of the Dollar for the same reasons? "Hyperinflation this, hyperinflation that...." What happened? The dollar rallied from 74 up 'til 89 in the subsequent months, and here at myBullmarket we anticipated that move.

6 months later and with EURUSD in the crapper myBullmarket made use of the "Magazine Cover" curse, when magazine The Economist had in their cover the enterings of Leninegrad making allusion of the downfall of the Euro, and we anticipated a move upwards in the Euro for a few months. It has been 4-5 months since then, and with the Euro now at 1.40's I think we have the same type of contrarian signal once again...

The Euro looks poised to start a decline for the weeks to come and silver in my opinion... well a picture is worth a 1000 words they say...

See how the move looks parabolic? Like I said these type of moves that are spectacular in a way turn out to reverse and do it so in a spectacular fashion as well...

In the graph above we have silves again ... we may have some more room to the upside... there is strong resistance at the top of the channel around 30 USD per ounce and that may well be the point where silver reverses and starts a meaningful or a very nasty decline. Also 30 USD is also the target from the inverted H&S formation that went from 2008-2010, so we have 2 points of confluence in resistance...

Therefore I'm starting to be itchy with my position in silver and will start to scale down along the way up but always leaving a few so if a stronger trend happens to take place I will take advantage of it... but I doubt it. Although trends usually do go way beyond of what most people anticipate...

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Disclaimer: The author holds long positions in Silver and long positions in EURUSD. The author does not take responsibility from the actions taken by others. The opinions listed on this article are of the author only, and shall not be deemed as financial advice, or any other sort of advice. All visitors to the blog should do their own research before making any decisions. This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses any one might sustain from the content provided. Author is not a registered financial advisor. Author does not engage in dispensing financial advice.

Are we in for a big run up in equities?

I can't ignore stuff like this...

Although currently we, in myBullmarket are bearish and our portfolio is hedged as well against any decline, this article makes a compelling case for a nice run up...

According to TRIN indicator the bearish move looks exhausted:

June 7 2010

Of course one, under an EW perspective could argue that since we are in the largest degree wave ever pretty much, previous records on indicators, etc, are expected to be broken... we'll see to which way does it brake.

Today's high...

...1149 points !
Should I make a little mind refresher?

That was last night...(apart from the "Today's high" stuff)... how can some academics say the market is random is beyond me. It's not. It's probabilistically predictable... But academics keep talking, while real people keep making money in the markets... who would you rather listen to? Sigh...

Wave 3 impending?

As for the S&P 500 here's an update:

 We are at an important juncture... I think the wave patterns are pretty clear in this graph. You can see a lot of textbook 5 wave declines, even at lower degrees that are not labeled on the graph, but if you pay attention, especially wave degrees lower than the pink waves, you can see also 5 waves mostly between waves pink ii and iii.

Fractals working at their best. So, we are now at a possible juncture to a new degree third wave, in which case if it happens we should go much lower...

Bull's Eye

After the past 10 months I've been commenting about the 1.23 level. We are now under that territory at 1.23 and a few sprinkles.

With the overextended pessimism going on, and the naysayers, I am becoming more confident we'll see a big rebound soon. Looking at the structure, the 5th wave extension keeps ongoing, but it is my view it will soon be over in order to give place for a rebound.

Anyways, since the trade is so overcrowded now, I am starting to build a long position on € against the $. Needless to say that I am going against the trend right now, so it's a bit swimming against the current. But at times, when extremes happen, one has to know when to stop. I think we are under such circumstances right now... I will keep adding new positions on the way down. Note, that I'm not averaging down, I have already established my risk on this trade, but instead of going all in I am scaling in until my total risk position is filled.

Here's a weekly current view of Euro:

Look at that... target almost hit...

Look at that !

Remember the trolls last year claiming for the end of the US Dollar? Where are they now? Where is hyperinflation that would send the dollar down the toilet? I don't see them...

Today the Euro hit 1.28 against the dollar. My long term target last year was below the 1.24 area as minimum target. We are now almost hitting that target...

Here's a snapshot for prosperity:

Here's the graph posted back in February claiming a rise to 85 level on USD Index. This level may be indeed a mid-term top for USD (bottom for € in this case):

Intraday update

And the news keep coming...

The 2 year notes for Greece have hit 10% today. And Moody's cut Greece's debt rating as well.

And the yield curve of the greek bonds are as follow:

So we are now in the presence of an inverted yield curve from the 2YR maturity onward.

In other words, a default is expected in the long term, but not without a bailout first in the short term.

Edit: I had seen this pattern develop a long time ago, but now is even more noticeable the perfect breakout of the neckline followed by a test of the neckline which failed to break, making this H&S pattern a valid one, with target at around 1175 points on the Greek index.

This means a decline of 40'ish % still to follow on the Greek exchange ! To be honest this H&S is super perfect and a beauty to be seen.

Tic Tac Encore !

I hear every so often lately people asking me: "Should I buy Greek bonds?" , "They're cheap..." , "Default is unlikely..." etc etc.

The truth is, more than a year ago I said the next crisis would become evident on sovereign debt. At the time, you couldn't find anything on the media. 4-5 months ago, Greece wasn't even a topic of conversation. Once the debt problems escalated to the public knowledge the greek Prime-Minister came to public staying that Greece didn't have any problems. They had it under control and wouldn't need help from either EU or IMF.

4 months later he is quiet as a mouse. This after a scandal of crooked accounts by the Finances department of the country in order to hide the real numbers from EU.

Now Greece looks to be the hot topic for every John Smith around the world, like suddenly they are top experts. I see a lot of retail public saying they want to buy Greek bonds. This has been on the past 2 weeks where yields at the time were under 7%, and of course we know how the public is wrong most of the times.

Yields don't stop escalating. They are now on the 8.6% area... An intervention will have to take place sometime, probably it will be during the weekend in a concerted effort by the EU and IMF most likely to bailout Greece this weekend.

Portugal, oh well, we're pretty much in the same boat no matter what people in newspaper say, whatever the portuguese Finance Minister says - the guy is either lying or is ignorant - if this keeps going we Portuguese will have to endure some real problems ahead. The PEC is a joke, there were no significant cuts announced, just higher revenue coming from higher taxes (which will strangulate the economy even more) and by the sale of assets, which as most of you know is not recurrent thing, so once the jewels are out, what are they gonna do?

Parity and Apple Daziness

Well it seems the loonie has reached parity today. Incredible. 1 canadian dollar is now worth... well... 1 american dollar.

The Canadian dollar is actually on of the few currencies worldwide to have strengthen lately, since the dollar has been in a rally mode pretty much since November/December.

But take a closer look though. If I would care to take a guess, I'd say the bearishness on this pair is about to end with what seems 5 waves already on this last down move. From there on, it is my opinion that the USD will start to strengthen just as much as it has been happening with other currencies. USDCAD may be a little late for the party, but is sure to make a great entrance I bet.

Apple launched yesterday their iPad, which is full of hype. Just another fancy product that lacks in quality and utility.

If you're one to believe in mass media psychology maybe Apple is reaching it's pinnacle.

The cover of TIMES magazine serves very well for contrarian signals, once a subject makes the cover it usually means it's the pinnacle of that subject.

Hitler made cover in 1939, and Estaline also made cover before his demise.

In 1999 the cover featured Jeff Bezos, Amazon's CEO which was the exact top both for the stock and internet bubble.

2005 the cover was the real estate investor, and we all know how that ended.

After last year's Fall covering Ben Bernanke which I believe to be also his pinnacle, this month's cover:

Big Update

Hello Hello fellas...

It's been a long time since a proper update on the blog, but it has been very hard to keep up with everything going on. Today I will make a proper update starting from our little portfolio which we can say is in good health, to currencies, stock market, commodities and what can we expect from here on.

So let's start with our portfolio:

This one looks to be a very hard task, I have a few ideas on my mind and some of our current positions appear in the screener once again, so it will be more cumbersome to me, since I had to go through their graphs to see which ones could offer more potential. The fact that the market is deeply overbought makes the timing of our purchase to be very poor. I will present some facts further down the road, to see if we press the trigger on Monday or not.

Here is the current state of the portfolio:

Well the stocks that are up for a switch and their respective returns since we've bought them are the following:

- IPHS   +141%
- NOV   +19%
- DIVX  +45%
- COH   +134%
- MOS   +29%
- DELL   +45%

So, these stocks have served us well especially IPHS and COH, but it will be time to sell them now except for Coach (COH). This one I still like it.

The new contenders for the next year should be:

- WTW
- APOL
- FWLT
- SOLR
- SOHU
- COH (which we already have in the portfolio).

Now the thing is, the first group of stocks are to be sold at the opening of Monday. I will not buy the the new contenders right away and why is that?

Because the market is extremely overbought and in my opinion a correction is due next week at least, so I will be waiting a bit to see if the market drops. In terms of S&P the readings are in the extremes, and nothing goes up in a straight manner of course.

Here is a signal that has served well in the past months and is now triggering a potential top:

Every time the conditions on volatility crossed over its' MA it was a top before a mild or even a stronger correction.

Regarding the Dollar, everything is going acording to plan. The dollar has been rising relentlessly against pretty much every currency. The scenario I traced out almost a year ago has been such a very good road map for us:

Now, the thing is, I see this rally hitting a mid-term top. I can already count 5 waves up of the same degree so it may be time for a little bit of a rest on the Dollar. As you can see the EW structure since the bottom is textbook clear:

The same goes for Eurodollar, which pretty much is the Dollar Index chart but inverted:

The idea to remain is the trend is clearly down for Euro and other currencies against the dollar. The pundits that keep saying how the dollar is doomed i bet they are scratching their heads, and of course they are blaming this due to Greece problems. The fact is the one who makes the news is the market, not the other way around. I didn't even dream of bailouts, IMF's, PIGS and Greece almost a year ago, and yet the dollar is behaving pretty much the way i said it to be in terms of structure, price action, etc... of course they will keep putting the blame into Greece, etc. We of course know better :-)

This chart if I remember correctly was made in July 2009. The green up arrow is the red (1) wave from the updated dollar index chart. As for very long-term we still can't know for sure if this is a rally just to test the 100 area or if it is a new bull long term bull market. As time goes by, we should know that more along the way as we get closer to the inflection points:

This is all for now. Tomorrow will be sky diving day :-D

So if you hear nothing from me the next week or so, it's because my parachute didn't open.

February Performance and review

With February behind our back, the performance on my trading was a bit disappointing. Not because of the numbers per se but due to my execution. I made too many errors on my trading this month and it cost me the difference of either being profitable or not.

On a mark-to-market basis, the account closed -3.2% for the month. I estimate my mistakes to have cost me around 10-15% which if I hadn't made them I would've end up deep in the green for the month. Mistakes were attributed to poor execution of my part, and one of them that cost me a loss of 3R (so the loss was 200% bigger than what I was willing to lose) was due to a price movement where it went well above my exit point, in which I forgot to put a stop in place.

Another mistakes were that at particular times on a few trades I got a bit biased. Especially in the currency market, where as all of you know I've been incredibly bullish for the dollar for quite sometime, so I underexposed myself on some trading signals just because they were against my bullish view of the dollar. Just because my system as telling me to go short dollar, because my bias was bullish I cut my risk to half, which is a mistake, since it was a decision based on my bias.

For this month, execution has to be key ! And later in the month we'll also have again a new shopping spree for our LMP portfolio. The portfolio is still beating the crap out of S&P, although as expected has been down as a whole since the peak of the market in January. We'll see how the month goes, and my bias tells me that in 4 weeks or so, we'll be a lot lower on the markets. This week should be the starting point of one severe downturn in my opinion. Indexes are at the brink of a new decline from the looks of it, which if confirmed, should take the S&P towards the 993-1000 points level.

Tiny update

Not much has been going on the markets lately... it's been boring with this sort of sideways/consolidation range.

There are a few alternatives on the table that I think may be going on. Either this wave down is subdividing and we are up for a few fireworks next week, or the bounce still has some more powder left.

We have to let the market show us the path, there are times where the patterns are clear as water and we have to take action in order to take advantage of them, there are others where it's a bit fuzzy of where we are in the general scheme. These are when we should be out, waiting for the market to clear itself.

As for the US Dollar, the trend remains clearly up. Wave 3 is subdividing so I think we still have some more upside to go before a more meaningful correction, although corrections can be pretty shallow. Remember what I've said, when the larger degree trend is up, surprises happen to the upside, so, our goal is to spot bottoms not tops.

The major signals of Zé Manel on the daily, remain the same. Trend is down. Of course it can always change, but so far my bet is on the short side.

We'll see how next week develops, and I am eager to see how it will fold out

Portugalmination...

It seems the financial news today are all about my little country... Too bad that the reason for the spotlight to be on us is not for the best reasons, I wish they were... It seems we are now following the footsteps of Greece, and I feel sadness for my country but I have to admit our government sucks really really bad...

Yesterday morning I warned the rollover was imminent in yesterday's post:

http://www.mybullmarket.org/2010/02/bounce-is-on.html

If indeed the indexes are in the wave Î think they are, as I said last week, this decline should be stronger than the last 15 days of January. So be ready...

USD Very long term view

Following are my views on the Dollar very long term (I'm talking years). There are 2 possibilities... One is very bearish and another is very bullish, but both are very bullish for the next months or even couple of years. The problem is at a certain point they diverge.

În white is the long term bullish count, and in blue the bearish down the road.

These laast couple graphs show us why the trend has changed and it has a very good potential. Lot of positive divergences.

Long time no see...

Good weekend everyone...

There have been a lack of posts lately from my part. Today I'm updating a few foreign charts.

Our Sensex from India and introducing the brazilian Bovespa. I'm also very very bullish in this one for a long time. I've said it before that apart from India, I think a few other countries in Southeast Asia are in bull markets in my opinion as well. Those are South Korea and Singapore and also Indonesia, and add that to Brazil.

Brazil actually I believe it's very similar to India. We're in a secular bull market, and this rise is only the start of a Primary 3rd Wave in EW terms. So there's lot of bull market to run in these ones. My opinion is these SECULAR bulls will last around 20 years. Of course we'll have simple bear markets in between, which I've made clear in India for example. I think we'll have a simple Bear Market around the 55,000 level in around 7 years or so. It will be something like this past bear market OR due to the alternation rule in EW terms, some kind of a sideways market (a triangle) very much alike the Dow Jones in the 70's.

But that is still very far away.

My opinion for the last few months was that a top in India was to be reached around the 18,000 level for the end of Wave (1). Indeed it seems to be struggling around that area, and it seems Wave (1) is pretty much finished.

Now the problem is 2nd Waves can retrace deep. I wouldn't be surprised for the coming 2nd Waves in the markets I consider bullish, to be deep, especially considering what I expect from SP500 and other markets. I expect new lows on Western countries' markets, so in this case the scenario could be, all bullish markets to follow SP500 in tandem until a certain point and then diverging.

The bull ones going up, and SP500 and most european countries keep declining.

Still, for long term my bias goes to keep adding capital every month to a fund exposed to these markets (Brazil, India, etc) much alike a passive investing strategy.

As long as these graphs don't show a SELL signal, I wouldn't be worried. If they happen to show a sell signal, I'll issue it here right away, and the prudent thing to do may be to get out. But so far so good, nothing is looking grim on the horizon...

Both trends are up both on Daily and Weekly charts, so we should be good :)

The LMP portfolio is also looking good, and from now on my screeners I will incorporate companies from India and Brazil as long as they also trade in NYSE. We should get a few goodies by incorporating both those markets.

2010 resolutions and LMT update

Hello everyone. Happy new year :-D

I hope everyone spent a good time during these holidays. 2010 is now in front of us, and it should be a tough year economically speaking in my opinion. During this year we'll have a lot of possible catalysts to reignite what we experienced in 2008. What happened in 2008 was mostly mainstreamed in the stock markets and the sub-prime factor, this year though the catalysts will come from the mother of all markets: sovereign debt. Greece, is in deep trouble, and no matter what the IMF says or their prime minister they soon will have to either default on their debt or to get intervention from the exterior, which in my opinion is a matter of months in order to happen. Portugal and Ireland would soon follow Greece's footsteps, unfortunately for me because I live in this beautiful country but is managed in such a bad way... sooner or later we will also have to recur to foreign help.

For the USD I think it will be a rosy year indeed. What I see from USD right now is a lot of strength signals and it should lead the index towards the 90-95 level. At least it's what I expect.

Now regarding the Low Maintenance Portfolio. I know we're a few days behind, since I didn't make any new posts the last 9 days. The change date should've been the 26th, but oh well, just a few days behind won't make a single dent on our expectations.

So for tomorrow we're selling from the Portfolio the following stocks:

- Terra Industries
- Valco Energy
- Garmin
- Time Warner (this was our star stock for the past year with 200+% in profits)
- Marvel (which was sold when Disney made the announcement)

The capital coming from the sales of these stocks will be allocated into 5-6 new stocks equally. If you're new and have no stocks or have only the stocks from past September, then 25% of your initial capital should be allocated equally between 5-6 stocks.

So the new stocks will be:

- Cherokee (CHKE)

- Aeropostale Inc (ARO) - (can't believe how I didn't remember this one before... I bought a lot of clothes in this store when I was in the States...although in EW terms and techically I don't like it, but hey this is a fundamental/value based strategy not TA)

- FluorCorp (FLR)

- Graham Corp (GHM)

- Sturm, Ruger & Co. Inc. (RGR)

...and finally:

- Gamestop. This one already is in our portfolio and once again made it through our screening. Since I believe in the company, and since it still shows up as one of the best companies around, then we can save ourselves some transaction costs and keep this one in the portfolio.

So in summary, we have 3 small caps and 3 medium caps (one that already was in our portfolio).

Let's hope that all of these turn out like Time Warner.

Note: Prices of sale and purchase taken into consideration will be tomorrow's OPENING price.

EDIT:

There is a problem with this post. I made a mistake to name Graham Corp. (GHM) since it was already in our portfolio from the previous quarter.  Therefore we're still missing one stock. This stock is Energy Recovery Inc (ERII).

I will consider tomorrow's opening price for this pick, so the results provided on this site could be easily attainable for anyone tracking it.

Once again I apologize for the mistake 

Brief update...

I won't be much active during the holidays. So to most of you I wish you a Merry Christmas and a happy new year.

Let 2010 be full of happy and good things to all of you.

Anyways, I couldn't help myself to not leave here a brief picture on USD Dollar.

As I warned a few weeks back, the trend has changed. In terms of TA we've got all requisites of a trend change, a trend change that EW was long awaiting around the 74 level as I wrote here back in July.

For those that have a short memory: http://www.mybullmarket.org/2009/07/usd-update.html

;-)

 I don't think I got too wrong on it. Let's see how the rest of the prediction rolls out. Which is right here:

 I think a strong bear market rally has started for the US Dollar that will drive it up above their 2008 highs or it could be the beginning's of a new bull market. We'll track it along to see what may be in the cards.

Now, a curious fact is USD rocked up, EURUSD plunged everyone awaiting for S&P to plunge AAANND... nothing.

What I've said many times before in here that I was expecting was that Dollar, etc could go in their 1st wave down (EURUSD) or up (dollar index), while the stock indexes remained intact. My view was, these assets (currencies) could lead on the way down on their first waves and then rebound for their Wave 2  correction and stock indexes getting their tops during a lower high in currencies. It's pretty common since no asset has 100% correlation. The same happened in 2008 with oil, indexes and currencies. EURUSD topped when indexes were making their minor wave 2, while Oil topped when indexes were making their intermediate 2.

It would look something like this:

 I think I made my point. We'll see what the new year brings. But my opinion it will be what most don't want. I think 2010 will be much more like 2008 than any other year. But that's just me...

Very late update...

I apologize for the very late update but I was a bit busy lately so I didn't have much time focusing on doing an appropriate update.

In regards to the indexes, not much has been going on... We've been in this boring range tight market for almost 2 months. What I said before still stands. We should be rolling over soon.

In fact, the dollar seems to have changed to the beginning of an uptrend. This reinforces the possibility of the indexes following suit soon.

EURUSD has definitely changed the trend... in fact wave 5 seems to be extending. Euro may find support in the 1.43xx area.

USD Index seems to have broken out of the downward channel it had been for almost 5 months. It also broke it's Long term trendline. Add this to the fact that the Elliott Wave Structure looks complete now, it has a very high degree of possiblity to begin quite a rally here.

First target will obviously be the 221 MA.

Although USD Index is very correlated to the indexes it doesn't mean they move in exact tandem. In EW terms for example USD Index could now be in the beginning of Wave 1 up, while the indexes (S&P and DOW) are in the midst of the final wave. This happened in 2008 in a lot of assets (ones being already in wave 1 down while others still upward). EURUSD for example should correct soon a bit, this could be a catalyst for new highs on the indexes (for their final wave) while Euro failing to make new highs (which i find very unlikely).

Gold and Silver seem to have started the downward move as well....

To me, this seems to be the long term picture...

EDIT

Also we're almost making changes in our LM Portfolio. Again, if you followed the portfolio, I hope you took my hint of starting the portfolio on November 1st due to seasonality. Long term, it shows that buy ins starting November have a statistical edge over other periods. It may not happen one year or another but long term it seems to be this way, so this was the reason on my own portfolio I did the same as I stated before the September 26th buy in.

This seasonality chart shows the reasoning behind it:

   As you can see, most the buy calendar periods fall in either trending up periods or after a big correction (August-October period).

I will go further in detail on this, once we make an update of LM Portfolio

Coawabanga...

Hello everyone. Not much to add regarding the indices front. They remain at the same juncture pretty much and long-term I am still bearish. There are a few developments though in other assets like EURUSD, Gold, AUDUSD and the Dollar Index, which to me is becoming the most relevant asset to merit a close watch. As I said a few weeks ago, it's all about the dollar...

S&P remains the same juncture... just under the 50% Fib and look at the divergences going on - this is a different indicator than the last few weeks:

 EURUSD sports the same divergences, and also broke the trendline that was supporting it a few days ago...

 Add that to the major sell off last week, but most importantly the characteristics of the sell off... Classic textbook Elliott Wave form with 5 waves down as you can see in the picture... so at least a deeper correction is on the cards... a correction would dump EURUSD into the 1.43 area, while a reversal would be the start of the decline under last year's low.

AUDUSD has many resemblances to EURUSD. In fact, AUDUSD was the first pair to sport 5 waves down a week or more ago if I recall correctly. This too, should have more downside potential. A trading plan here, alike EURUSD would be to short on the rallies like a 38 or 50% Fibonacci retracement of friday's decline.

Now, let's move to GOLD. That little shinny yellow object that most of us love. Who doesn't ? :-D

Anyways, here to we have MAJOR divergences, and for the first time in a long time we have a textbook Elliott Wave form decline, sporting 5 waves down. It can't get cleaner than this. Again the plan here would be to wait for a little rally into the 38-50 Fibonacci area and then getting in.

Oh I almost forgot... one more thing. Remember my charts on USD Index? I've been favoring a big rally coming on USD. Lately, it seems USD has found a bid. Let's see if it can continue this strong. It's imperative to remain strong and break those resistances. But here's what I prep for you guys...

An ABC flat looks like this:

Now let's take a  peek into USD Index...

Now tell me I'm not seeing things... any resemblance with real life is purely coincidental. :-D

EDIT:

I want to make an update on something I forgot to talk about. Last Friday's Non-Farm Payrolls. I saw a lot of cheering because the report was so much better than expected and how the unemployment dropped from 10.2% to 10%. Well, I don't see a reason for cheering such numbers. And why is that?

We have to take into account the season we're in. I don't know how it is in USA - well actually I do - but here in Portugal, stores during November start to recruit a lot of workers for the Christmas season, but then what? They get dumped in January pretty much. So I don't see much reason to cheer... the drop in the numbers of NFP were ONLY because of the hiring due to the TEMPORARY hiring companies ensued for Christmas. Wal-Mart alone accounted for the creation of around 65,000 temporary jobs! So we know how this will be once all those temp workers get dumped for unemployment again...

And we all know how BLS tracks unemployment figures ... here's something you should watch:

Are you unemployed?