Wednesday, August 11, 2010

KABOOM !!!!!!!!!!!!!!

"Democracy depends on an INFORMED electorate. As a group, the American voters are dismally ignorant. They hold the power of the votes; yet they elect and re-elect a corrupt and self-serving Congress. It is incumbent on every American to be informed and vote. Until that happens, I guess we get what we deserve. The people are passive and ignorant. Congress is active, shamelessly self-serving and corrupt." Richard Russell

S&P 500
No one likes to get a wedgie: On Wednesday the consequences of the wedge formation on the S&P became evident. We have now entered the time period where it will be essential to attempt to decipher what the markets are going to do--whether this is a shake out in a major advance--or the start of a decline that will instill fear in both bulls and bears alike. I believe the latter is the greater possibility. If this is the start of a classic Elliott three wave decline, support levels will be few and far between and VOLATILITY will SKYROCKET. (think VIX Calls) As the adage goes: The Tape Will Tell The Tale.

Gold is at an interesting juncture. It has retraced 50% of the June-July decline coincident with the down sloping .618 fan line. A test of the recent rally's conviction will clarify the overall structure of the market.

U.S. Dollar

Well today was certainly entertaining! This market could get as crazy as the equity markets potentially could. A continuation into the 'Fibonacci sector' is likely before a evaluation of market structure can be made. The technicals, harmonics and sentiment all suggest that the market could go significantly higher.

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