Thursday, April 15, 2010
Market Finishing up Subdivisions Before Topping; Prechter on CNBC's Fast Money
The Dow made a new high today but the S&P did not. So it's possible we'll get some pullback tomorrow if this divergence holds. When the S&P makes a new high with the Dow, then this divergence is erased and we will continue to count the unfolding subdivisions higher into a top. With options expiration tomorrow, I expect to see repositioning and some volatility take place. The Dow and S&P appear to be unfolding in slightly different wave structures right now, but should reconcile these differences as they both move into a top. The constant continuation of the rally into further overbought territory only strengthens my bearish position, and any sharp rally higher will only lead to me adding to my shorts. Once I can confirm a top with high confidence, I will get aggressively short at that point. So it's a waiting game from here.
Bob Prechter on CNBC's Fast Money (given about 45 seconds to speak, and then was forced to listen to screaming bulls talk over him. Enjoy the 45 seconds.)
Thanks to blog reader Jimbo for posting this video because I would have missed it otherwise. I used to watch FastMoney (FM) everyday when Ratigan and Mackey were on, but now the show is crap in my view with perma bulls doing cartwheels all day on the show.
(below are just a copy of the comments I left in response to Jimbo's post)
This is unusual for Prechter to go on here because he's said many times he doesn't like getting into shouting matches with people so he usually only does interviews if he's the only one on. Perhaps his subscriptions have tapered off a bit so he's spreading his wings into areas he normally doesn't go into.
And I'm actually glad those guys on FM are laughing at him and blowing him off because that only strengthens his case in my view. The FM crew preaches to the mainstream masses, and if they were scared or on board with Prechter, that would be concerning. But their blind optimism and dismissal of Prechter's caution is encouraging for the bears. I watched FM the past few years and no one was calling for a major top and decline and most of the time they spent the whole show talking about stocks to buy as the market descended lower. Big bears Fleckenstein, Nourial Roubini and Doug Cass always get a lot of crap from the FM crew. During the last big decline, some of the FM crew were bearish and expressed caution here and there in the short term, but no one on that show prepared us for the magnitude of what 2007-2009 gave us, NO ONE did. But Prechter did give us the play by play on it from start to finish. Prechter should have asked them where the fu$@ they were in October 2007 when people should have been extra cautious, not throwing "Fast Money" at their buy recommendations? Why doesn't the Fast Money crew run down the list of stocks they recommended to the public to buy during that time and compare them to Prechter's recommendations? FM missed the last top, so I don't expect FM to give us the scoop on a major top this time around either.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.