This Favored NASDAQ Variation Says Big Risk Near

Remember that "double three" I was detailing yesterday, alternation and all, projecting NASDAQ's Elliott wave form developing from March '09 bottom, as well as from October 2002 bottom before that?

Is this the very thing I was describing? Has that measure of wave alternation typically distinguishing the first "three" from the second "three" in a "complex" Elliott corrective wave already been largely manifest?

We have our alternation to be sure. In fact alternation abounds.

A "zig-zag" up from March '09 bottom forms wave (a)-- (5 waves up, 3 waves down, 5 waves up, or 5-3-5). This is followed by a "flat" forming wave (b)--(3 waves down, 3 waves up, five waves down, or 3-3-5)--with the second 3 (i.e. the flat's wave b [up]) alternating from the flat's starting 3 waves down.

So, the a and b component waves of the wave (b) flat alternated in wave form, which is quite typical--to be expected--according to the Elliott Wave Principle.

Likewise do we see the Elliott Wave Principle's "alternation guideline" distinguishing waves (a) and (b) of the second "three" forming wave B (this second "three" unfolding off March '09 bottom). As has been commonly detailed in recent Elliott wave views I have applied to the NASDAQ Composite, a "rising wedge" once again might be thought unfolding, this time  forming wave (c) since early-October 2011 bottom and prospectively completing the second "three" of wave B.


Moving along, now there's the matter of the second "three" unfolding off March 2009 bottom--(forming a 3-3-5 "flat")--alternating from the first "three" of wave B. The first "three" of wave B unfolded off October 2002 bottom and developed into a 5-3-5 "zig-zag" completing at NASDAQ's January 2004 peak.So, the second "three" of wave B alternated from the first "three."

A clean sweep. Across-the-board alternation. A Royal Flush.We're just one card away.

The blue line of support you see drawn above deserves some serious attention. Definitely a key inflection point that has developed in the formation of the prospective 3-3-5 "flat" up from March '09 bottom, as presented above.

If this "flat" in fact completes wave B, it's a good bet wave (1) of C down will destroy this indicated support, amd turn it into resistance. All this, too, likely the very least worse fate the market faces over the near- to intermediate-term .

Yes, all ye faithful, just like you read here yesterday: sometime over coming weeks and months, the worst decline since March '09 bottom rather appears likely upcoming.

Truth be told, I like the above NASDAQ Elliott wave view best of all those presented here so far.
Thus making tomorrow but another of several tomorrows likely spent completing the "rising wedge" forming wave (c), quite possibly pushing NASDAQ toward completing wave B to boot and prospectively setting up, say, a 38.2% collapse over a period of 5-8 weeks sometime later this year...

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

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Variations on the Least Loved

So, we see the party of Make Work and Money Grab euphemistically called "business" has voted down in Committee (check out the state constituency Tarpley attached to Rep. Duncan Hunter's name: LOL!) Representative John Tierney's version of Senator Elizabeth Warren's "Bank on Students Loan Fairness Act." Still, the national conversation is changing on account of Alexander Hamilton's resurrection these targeted, congressional efforts animate, and this necessarily means the Venetian mafia is facing a difficult environment in which to continue swindling its way to "legitimacy."

You might have missed my belated posts regarding Senator Warren's S.897. The first is titled "Senator Warren Discovers Benevolent Life on Mars!" and the second "S.897: Lifting Employment and Exporting the American Revolution." As ever, what I intend to say sometimes finds me taking my sweet old time getting around to it. This most recent bout of writer's fatigue was a bit pronounced, but we're all caught up now.

Per the "Venetian mafia," this moniker came to mind after watching last week's, "Subcommittee Hearing: Recent Developments in the Investigation of the Murder of Human Rights Attorney Patrick Finucane." Not a pretty picture, but a fuzzy view of vehicles at the intersection where Venice on the Thames manages traffic within its tentacles' reach. Of course, its Northern Ireland intrigues supplement those of old by its U.S. partners in the assassination of President John F. Kennedy, these being illuminated by one Colonel L. Fletcher Prouty, the real life personage behind the "Mr. X" character played by Donald Sutherland in Oliver Stone's 1991 film, "JFK."

Alrighty, then. Now that we're up to date and up to speed, let's further ponder upcoming, intermediate-term possibilities...

Above is a slightly modified Elliott wave view applied to the the NASDAQ Composite than was assigned a week ago Friday. The reason for this simply is respecting the possibility that, following upcoming completion of wave B (the middle wave of an a-b-c Elliott corrective wave forming from NASDAQ's Y2k peak) the market's subsequent sinking might not result in March '09 bottom being taken out, which "better" possibility was briefly discussed here last Monday. Thus, rather than supposing a "rising wedge" has been forming off NASDAQ's March '09 bottom, we might consider the same exhaustion pattern instead has been developing since June 2010 bottom.

One characteristic of this "special" Elliott wave pattern (i.e. a "rising wedge") finds subsequent market action rapidly retracing the distance covered during the rising wedge's formation. Were we to suppose a rising wedge forming off March '09 bottom, like last Friday, then we could reasonably anticipate NASDAQ's upcoming collapse sinking the index below March '09 bottom. However, if we take the above view, then NASDAQ's anticipated, upcoming setback might not necessarily be quite so nasty.

What's more, the above view suggests a "double zig-zag" is forming wave B. What if, though, the proposed, upcoming completion of wave B indicated above is rushed? What if rather than a "double zig-zag" nearing its completion, wave B eventually takes the form of a "double-three," meaning some addition years possibly are to pass before wave B is completed? In this case we might expect the second "three" forming off March '09 bottom likely will alternate from the first "three," itself unfolding from October 2002 - January 2004 and forming a "zig-zag." The Elliott Wave Principle's "alternation guideline" advises us, then, to anticipate the second "three" likely to form a "flat" (thus alternating from the "zig-zag" forming the first "three"). Thus, too, the presumed "zig-zag" up from March '09 bottom might be seen in this particular view forming but wave (a) of the second "three," with wave (b) [down] set to begin unfolding imminently.

This prospectively upcoming wave (b) down, itself, is likely to form a "flat," this, again, per the Elliott Wave Principle's "alternation guideline."

Oh, if only this business were all so cut-and-dry and easy! Indeed, Robert Prechter, co-author of the Elliott Wave Principle, dutifully indicated the greater difficulty of forecasting Elliott corrective waves. We're seeing this play out quite vividly. Still, having some better sense of finite possibilities within the framework of the Elliott Wave Principle we enjoy a slight edge anticipating market reactions likely to proceed from upcoming, fundamental developments. There's every reason to believe smooth sailing is the least likely possibility ahead.

Although indeterminable might be the depth of any setback whose probability, indeed, presently appears heightened, this market appears to be facing a considerable degree of selling pressure upcoming, and this likely greater than anything experienced since March '09 bottom. In fact this outlook presently is viewed virtually certain to occur sometime over upcoming weeks and months.

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

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Shovel Ready

"It’s worth noting ... that when filthy rich market speculators were in the past celebrated for their brilliance and extraordinary market acumen – well, it proved a decent juncture to start worrying about the future. This spectacular cycle of speculator wealth accumulation has been going on for so long now that everyone has simply stopped worrying."
—"Financial Euphoria" (Credit Bubble Bulletin, 5/17/2013

Well, not "everyone" has stopped worrying. Not here anyway. Likewise, a perfectly unsustainable financial backdrop ripe for manufactured swindle will be ignored at the peril of "filthy rich" market speculators to be sure. Indeed, we might cite notably suspect internal dynamics accompanying the market's advance since mid-November 2012  presented by a persistently muted NYSE advance-decline differential as indicating that, even so called "filthy rich" market speculators, the likes advising shorts "have a shovel to get out of the grave," are being played like a fiddle, much like those in the U.S. intelligence community who are not among moles on a decades-long mission subverting the American republic, specifically, as well as institutional arrangements supporting a system of sovereign nation states more generally. Pope Francis certainly knows what's going on and is quite worried, as well.

Make no mistake about it, Team Fraud has plenty to worry about now with increasing pushback materializing in the U.S. Congress. As of yesterday, both houses now have bills before it seeking reinstatement of Glass-Steagall. This development comes on top of Senator Elizabeth Warren's legislation partially nationalizing the U.S. Federal Reserve for the sake of financing the U.S. Department of Education's Stafford loan program—a move effectively acting as a foot in the door to reestablishing the Bank of the United States. Alarm in many a mahogany paneled boardroom housing morally bankrupt representatives of anti-American, imperial interests surely must be developing. As EIR's Jeffrey Steinberg notes, an identical bill submitted to both houses of Congress has "short-term immediate implications" pointing to "legislation intended to be passed and put on the President's desk."

So, let's just say Team Fraud very soon probably will need scuttle the present moment's euphoria in a fit of panic aiming to refocus  attention on the otherwise bankrupt financial, economic, social and political agenda its captive interests have been promoting for some decades now. In the case of the supposedly "independent" Federal Reserve a full century of principally inflationary, unproductive credit creation, now off the charts—hyperinflationary—is at stake.

A closer look at yesterday's dissection of the Dow's wave c up from mid-November 2012 finds technical conditions ripe for a turn lower, yet for some days to come still likely only modest in effect. We can look back to the period from mid-March to mid-April for a preview of what's likely.

The dynamism of an Elliott 3rd wave certainly is on display here. Still, slowly but surely it's fading. Likewise, given the technical backdrop leading up to formation of this particular Elliott 3rd wave off November 2012 bottom, we can be fairly confident that, once 5 waves up have completed and another Elliott 3rd wave prospectively takes form, this time down, the typical dynamism of an Elliott 3rd wave will make those shovels billionaire suckers advocate for the bear camp useful for burying the garbage these will find excruciatingly difficult to offload at a profitable price. Confetti's hyperinflationary happiness is on its last leg and Congress evidently perceives this quite acutely, while the "filthy rich," apparently without a worry, simply fail foresight of a future just filthy.

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

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The Nearness of the Inevitable Moment of Truth

What can I say? I really haven't been much for writing while watching everything play out as it has. Besides, it has been all "top" risk alert here for several years now. Nothing has changed either. All the same, as far as we can tell, too, levitating trash still remains the nature of the game we're watching play out...

Let's take the view that, an a-b-c-x-a-b-c is unfolding off March 2009 bottom—specifically, a "double zig-zag." Although these prospective component waves are not labeled above, we see this "double zig-zag" forming wave X, which is labeled. The Dow's advance off March '09 bottom, then, is assumed forming a "connecting wave" of a "double three" Elliott corrective wave that has been unfolding off the Dow Jones Industrials Average's January 2000 peak.

The first "three" of this complex corrective wave formed a 3-3-5 "flat." Its component waves unfolded from January 2000 - March 2009 and are labeled A, B and C.

As I said, the "connecting" X wave up from March '09 bottom, itself, formed a "double three," this being a so-called "double zig-zag."

Now, the second "three" in this "double three" corrective wave forming off the Dow's Y2k peak is likely to take a wave form "alternating" from the first "three." So, the first "three" being a 3-3-5 "flat" raises probability the second "three" will take the form of a 5-3-5 "zig-zag" [down]. This anticipation, again, is raised by the Elliott Wave Principle's "alternation guideline."

So, anticipating a 5-3-5 "zig-zag" down once wave X is completed (see below), enter possibility March '09 bottom could be taken out like support never existed there, this forming the anticipated zig-zag's wave A in a 5-wave collapse. Picture the Dow falling to 3600, stat, as in some approaching moment even this year. Subsequently, the zig-zag's wave B, lifting the Dow back to the 6600 to 7500 range, only to be followed by the zig-zag's wave C, tortuously sinking the Dow to as low as 1733 over the course of a period lasting, say, 5-8 years.

I've mentioned this possibility here before. I'm mentioning it again because it still is very much living.

Ya know what, too? If it happens, the Dow still will remain in a long-term uptrend! Just sayin'.

Could such a spectacular collapse, indeed, actually happen? Absolutely. The true craziness of modern "finance," indeed, finds but objective concurrence in this very credible Elliott wave-based possibility I am again raising here.

Now, the Dow's weekly chart technicals provide provocative substantiation of this possibility, too. There are a couple negative relative strength divergences to keep an eye on. There's also on display via MACD the Elliott Wave Principle's "alternation guideline," this contrasting the components of the "double zig-zag" forming off March '09 bottom. As we can see, too, the Dow's upside momentum (again, looking at MACD) is reaching a peak level subsequent to which the Dow (and the entire market for that matter) typically has reversed course.

We might likewise wonder here, too, though, whether in the framework of fundamental reality finding quiescence with a fantasy-filled regulatory policy a "double zig-zag" unfolding off March '09 bottom could evolve into a "triple zig-zag." This certainly is possible. So, as the second zig-zag of the double zig-zag forming off March '09 bottom nears its completion, we should be aware how fundamental developments in fantasy land might determine which of the finite Elliott-based possibilities here actually come to fruition.

As the dynamism of [the second zig-zag's] wave c up from mid-November 2012 has been notable (and excruciating to the bear camp, no doubt!)—a very typical Elliott third wave characteristic—closer inspection of the Dow's technical state at daily intervals provides us bearing on the nearness of the inevitable moment of truth.

There is a good technical case to suppose the 3rd wave of 5 waves up from mid-November 2012 is just completing (these 5 waves up are completing wave c of the second zig-zag up from March '09 bottom). In fact the 5th wave of this 3rd wave has "extended," this off late-February 2013 bottom.

Note, though, how during formation of the 3rd wave of wave 3 unfolding from mid- to late-January 2013, the best technical readings were established, while ever since negative technical divergences have coincided with subsequent Dow peaks. We see this both via RSI (top panel) and MACD (bottom).

Note, too, how momentum (i.e. MACD) during formation of wave iii of 3 of c from mid- to late-January 2013 bested its best reading during formation of wave b (this unfolding from late-November 2011 to mid-November 2012), while failing to exceed its best during formation of wave a (this unfolding during the market's spectacular advance of October 2011, itself in fact bringing a positive "outside month": a true rarity, as well as fitting a climate of sheer panic insightfully remembered as "God save our sinking ship!").

The question is, then, does this negative momentum divergence, wave c versus wave a, possibly project a whole lot of nasty once wave c completes?

Well, as they say, time will tell...

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

There's an easy way to boost your investment discipline...

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Evil AP and a Saintly AG

Wow. Just how fantastically absurd must be credulity needed to sustain the unsustainable really is off the charts. This AP thing plainly exposes an intensifying effort to ratchet up police state and effectively impose dictatorship through the institution of the U.S. presidency. This specific action, presumably targeting AP for its exposure of CIA intrigues (that's not what Uncle Sam's spying rationale is identified as being, but what it more accurately is seen merely recognizing al Qaeda as the CIA's Arab Legion), appears part of a new phase in the destruction of the U.S. republic ongoing in the modern era since JFK's assassination in particular. Likewise, press freedom in the crosshairs probably is best thought but another component of actions tracing from Benghazi to Newtown to Boston. We might assume, then, assassination threats targeting the U.S. president, no doubt, are quite real, and this no matter how witting the Obama administration otherwise has been as accomplice to incredible evil perpetrated at the highest levels of the U.S. government during Obama's tenure.

The common thread with Watergate we have been hearing of late all too likely is being spun by imperial moles within the intelligence community to be sure.

The real tip off here is AG Holder's claim AP has endangered American lives with its reporting. Oh yeah? What about the hundreds of millions of Americans whose livelihoods have been sold down the river in the imperial globalization scam? How about the tens of millions swindled into a debt trap from which hope of escaping is fast diminishing in a collapsing physical economic environment? Let's not forget the millions over the past several years whose homes have been stolen, either! What say ye, oh AG, of the pensioners whose fortunes now are at risk in a casino perpetually on the verge of going bust, this being exposed for all to see by an insolvent Federal Reserve's infinite QE? How about the fact the casino also must launder hundreds of billions of dollars per year amassed in the illegal drug trade in order to stay afloat? What of the countless young lives being destroyed by this? Does this somehow make their increasingly unemployed status more bearable, as the problem now can be claimed their own fault for having made bad life decisions?

Well, clearly, that the covert op targeting AP has become public knowledge—it's doubtful this exposure was intended—certainly says something about a brewing war within the intelligence community pitting incredulous patriots (let's hope anyway) against slimy moles working for bankrupt oligarchs. This intensifying turn of nastiness—a different kind of explosiveness, but dangerous nonetheless—simply cannot be a good thing for suckers who see a rising stock market from here to eternity.

Let's go with the above Elliott wave-based possibility applied to the NYSE Composite Index supposing that, a "zig-zag" up from early-October 2011 bottom is completing, with 5 waves up from mid-November 2012 forming the zig-zag's wave c just about reaching their end. Indeed, this broadest of market measures has displayed typical technical dynamics accompanying component waves of a 5-wave advance, unlike those more narrowly based measures like the S&P 500, for example.

Remaining to be seen, then, is whether the NYSE Composite's 3-wave advance off its early-October 2011 bottom completes the second a-b-c of a "double zig-zag" up from March 2009 bottom, or forms wave b of (b) of B (with wave B forming since March '09 and wave (b) since February 2011—see Monday's discussion). In either case the possibility of a chaotic decline taking out March '09 bottom over coming weeks certainly remains on the radar. This possibility furthermore is heightened by the fact the NASDAQ Composite appears to be completing wave B of an a-b-c corrective wave forming off its March 2000 peak (see last Friday's discussion).

We are unmistakably seeing different Elliott wave views across the various major U.S. stock indexes. Above, one of the broadest measures is seen prospectively registering what could prove a very major top. Likewise do we see this, too, per the NASDAQ Composite Index. Yet per the Dow Jones Industrials Average and the S&P 500, an Elliott third wave's typical dynamism appears more acute. The technical configuration accompanying each index's respective 5-wave advance off mid-November 2012 bottom—this in both cases forming an Elliott 3rd wave—suggests these more narrowly based measures still are some way from completing, at least time-wise. Quite the contrary appears the case, though, per the NYSE Composite Index, as we can see above.

What's "curious" about this to be sure is, and has been for a long time now, the NYSE's cumulative advance-decline line, which since March '09 bottom persistently has been in "Mmmm, yummy garbage" mode, scarcely missing a beat and behaving as though the NYSE Composite were double its October 2007 record high. "Something's just not right" is conclusion this disparity still brings to mind. Typical Elliott "b" wave character is, and has been for a long time now, vividly displayed on this account. Likewise, should the NYSE Composite in fact be registering a major top at this early juncture (relative to more narrowly based measures), all the more will objective evidence indicating "something's just not right" be in place, how ever "subtle" this additional facet substantiates that very conclusion.

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© The Risk Averse Alert — Advocating a patient, disciplined approach to stock market investing. Overriding objective is limiting financial risk. Minimizing investment capital loss is a priority.

Analysis centers on the stock market's path of least resistance. Long-term, this drives a simple strategy for safely investing a 401(k) for maximum profit. Intermediate-term, investing with stock index tracking-ETFs (both their long and short varieties) is advanced. Short-term, stock index options occasionally offer extraordinary profit opportunities when the stock market is moving along its projected path.

Nothing is set in stone. Nor is the stock market's path of least resistance always known. More often than not, there are no stock index option positions recommended.

There's an easy way to boost your investment discipline...

Get Real-Time Trade Notification!