I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Wednesday, September 1, 2010


Still continuing with the 'Sp____' post theme. This particular title is for all my fellow brewmeisters.

Like I was saying on Sunday (Span), my friend MOe was suggesting that this wave was nearing completion. He wasn't lying. My counts were also geared toward that expectation: Splinter and Splice (showing my preferred and my alternate, which have about equal probability weighting for me at this point)

So now we got the bounce. Time to go long? Not so fast (.... and not a chance). Keep this wave in perspective. This is what I believe is to come. I am not (nor would I suggest to anybody else, however, I don't give advice, just opinions) going long here even for a hedge. I am highly short. I used a small amount of dry powder to add to shorts today, and I will save just a little more to add to shorts after Labor Day.

September is seasonally a very bad month for equities (even including the very common Labor Day rally). We also have a downtrending 200 day MA (see this post: Moving Average Examination), and is confirmed on the chart below.

This is the DANGER. So as a bear, I have no desire to get cute and time the bounce in front of this steamroller. Bulls (which I doubt any read this blog) need to be cognizant of this is a very real and viable option.

blog comments powered by Disqus