Big-pic alternatives-equities

Thanks for the comment on VIX/QQQQ's/SPX! My inclination is yes, bullish VIX and bearish equities from here. Trying to put the big picture into focus. There are a few people out there saying the next supercycle bull market is upon us. I see the potential for it but not as convinced it is here yet. Most view that I follow say that the bear continues into 2010, or maybe 2011/2012, to be followed by a probable wave 1 and deep wave 2 (for the next wave V (circle) or whatever, the next big bull that goes into perhaps 2030 or 2050 or 2060 time frame). What if this bottoms sooner (or "already did") and the next bull is on? Maybe there is a middle ground. I have been liking the idea of a large EW flat for a long time, really since perhaps November when I first started this site. Anyway, over the past couple days I draw up a few possibilities. I don't want to post at my main UBT blogspot because I am not sure these are "ready" for the bigger audience.

NOTE to my buddies who still wonder about the market going to new highs into 2012 per R.N. Elliott's original views and some other ideas ... maybe these charts would do it! If we never revisit the lows that we already saw in March 2009, then my guess would be the highs would arrive as a monster "B" wave up (maybe mesh with Tony Caldaro's idea of an EW flat for the shape of the whole correction, and who's to say it could not be an expanded flat?!).

This first chart actually has two possibilities on it. Both have an EW wave IV (maybe it is circle-IV) bottoming where the whole drop is a C wave equal to 1.382 times A (A being the drop from 2000-2002) in terms of price. Depending on just how you measure out that 1.382 extension, those numbers are marked on the chart. Despite the fact tht SPX bottomed in March at the convenient "666" number that some are saying marks the New World Order (not sure what to make of all that!!) which propels a new bull, I still like the Fibonacci 1.382 as high probability, and that gets SPX lower. Basically, numbers in the range from 468 to 554 would seem to do it.

Actually, notice that there is an outer downtrend line that either this scenario, or the next one, wanted to "waste" some more time by getting out to it, before completing the lows.



Here's one idea if SPX wanted to do a flush down and get to my EW flat numbers sooner, get that out of the way, and then launch up to EW circle-V. I marked it in purple, on top of the other chart (hey, limited time!):


Here's yet another idea, let's say if the market already bottomed "the low" and it's on up from here. It would be the idea of a diagonal up, or I guess it could be an impulse. Actually looking at it, I think that the short amount of time to reach up to a new high, looks like it should be more of a huge "B" wave. That's my sense of it; I suppose theoretically it could point to a fifth wave high, but the proportions really do not look right to be a fifth wave that caps off following a 4th wave of this magnitude.



Here's a long term chart that someone sent me back in November, that I posted here back at that time. It was before the market probed under the 2002/2003 lows, but obviously not much before. The point was to show that the markets could get long-term channel support. Now, at this point, I rather fancy the idea that the market does indeed probe to a lower level that completes my EW flat "C" wave idea, and gets support on the bottom trendline (because I think it already broke that one that it tested at the time this chart was made). But, as my late trading mentor once said, a broken trendline can be what sets the stage for a diagonal fifth wave. So perhaps the market would not have to test all the way down to that bottom channel trendline before moving higher.

My personal preference (and I hope it is not a bias!!) is, that we've seen intermarket divergence where some markets such as Dow Transports and NDX did not get under the 2002/2003 lows. And that it is a bearish divergence that will not last, and the markets will go lower to my EW flat target level objectives. And then just as people are feeling like the bottom has dropped out, and EWI is saying we're in a third of a third of a third of a third down or whatever and it's straight down to Dow 800 (or 400), then the market will ge that support and we will see an amazing huge fifth wave, and it will take a while for that fifth wave to play out and it may be strange in some ways (as 5th waves often tend to be), probably making the Dow Industrials and SPX look like the Nasdaq when it peaked out.

If I am right, there should be plenty of time to figure out that it is happening. I think that the data showing in the McClellan and similar indicators, are saying that the markets are getting ready to make "the next low" a very significant one.

We need to keep a very close eye on GOLD, DOLLAR, and EURO to guide us for the right direction. Especially now with all three of them at critical levels. In all three, they are looking like they either make a turning point now or soon ... or else gold skyrockets, dollar tanks, euro skyrockets, and the equity markets would probably have to spike up too. Just my very best guess for what to watch here.