Wednesday, September 9, 2009

Bigger Picture Proves Rally is Just a Bear Market Pop; September 9, 2009

With the market not following the wave 3 collapse model as it should, it seems the market still wants to chug higher to new highs, just as the Nasdaqs did today, I want to keep the bigger picture in perspective. On top of optimistic being at extremes higher than what they were at the 2007 market top, also notice on my daily S&P futures chart that volume during the entire rally since March 6, 2009 has been on decreasing volume. This is textbook characteristics of a bear market rally, and NOT a new bull market. So even though it's been very difficult calling the absolute top in this market, numerous indicators in the big picture strongly suggest that this entire rally will be completely reversed, and most likely it will be done much fast than it rallied.

I will post anything new that develops regarding when the wave 3 collapse begins.


Gustavo. said...

I take all this comentarys from Bloomberg today 11/09

Traders who bet against Mexican equities in record numbers two months ago are closing out their positions as Latin America’s second-largest economy heads for the steepest recovery worldwide.

Sept. 11 (Bloomberg) -- Brazil’s economy probably emerged from its first recession since 2003 in the second quarter as robust domestic demand compensated for a drop in investment.

Sept. 11 (Bloomberg) -- China’s industrial production rose at a faster pace than forecast in August and new lending unexpectedly climbed, indicating growth in the world’s third- biggest economy is likely to accelerate.

Sept. 11 (Bloomberg) -- Confidence among U.S. consumers probably gained in September for the first time in three months as the pace of job losses slowed and the economy showed signs of pulling out of the recession.

How is easy to see we are in an economical environment very good for all this people.
Mmmmmm. Dust in the wind?

Thank you for the chart of the dollar too. I hope soon will begin the party.

Todd S said...

Thanks for the articles Gustavo. Nice work! This type of high optimism that "the worst is over" is just what we needed to see to mark a major top in global equities.


And yes, the dollar is in its final stages of decline and should for a MAJOR bottom soon.