The illusion that, the Federal Reserve is venturing to stimulate a wealth effect whose result increases demand (and, thus, employment) is about to meet reality that, quantitative easing in fact can only succeed in accelerating the rate at which the supply of goods and services collapses. As I indicated yesterday, the fascist Fed Chairman, Benito Bernanke, knows full well the impossibility producers face in passing along increasing costs to consumers. Thus, commerce is fated to contract. (As if two years a failed QE policy has not already provided ample proof revealing this end...)
With increased misery being likely reality, then, what pebble in a big pond of sorrow does extending the Bush tax cuts represent? The slickest cowards money can buy will be sure to see taxes rise, then, so that the questioned viability of the lender of last resort might be deflected far more effectively than what that silly Murdoch rag attempted with its insulting "Who?" (check out the link).
The stock market is doomed.
(And if the Chinese drop a giant Treasury turd on the market sometime between the conclusion of the coming G-20 meeting and the end of the year, I will not be the least bit surprised. Indeed, you might reasonably think the Chinese are being provoked to do just that. Skyrocketing Treasury yields would play perfectly into the hands of those obscenities in Congress whose calls for austerity in fact aim to put the U.S. federal government out of business, making it prostrate to the fraud bankrupting the nation.)
If there is any case for a change in the Elliott wave view now that many indexes have exceeded their April 2010 top (not yet in the S&P 100, though), it is that the "irregular flat" (a 3-3-5 corrective wave) beginning at November 2008 bottom might have ended mid-November, 2009 rather than April 2010. Since then, another "irregular flat" [down] can be seen unfolding (whose wave a ended late-June and whose wave b end approaches).
About the only thing this exercise in splitting hairs does, though, is confirm the view put forward last week, when the NASDAQ Composite was the first to break above its April peak. Namely, that March '09 low now appears likely to hold up during any upcoming swoon.
Prior to last week's breakout taking most major indexes above their respective April peaks, the risk of imminent collapse below March '09 low was not slight, this from a technically well-substantiated, Elliott wave perspective. Yet also possible (although, admittedly, less often discussed) was that March '09 low would draw support from those whose world depends on it. This latter likelihood now appears the higher probability.
Be that as it may, there remains every reason not to expect anything remotely resembling "normal" over weeks and months ahead. Indeed, March '09 low might be tested by year-end. Yet its defense could make the lift off March '09 bottom look tame in comparison. In other words, even were March '09 low defended during what still appears the market's imminent collapse, volatility should dramatically increase over the interim and beyond.
And maybe something of the same lies straight ahead. A blow-off top still remains possible.
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