Here's how quickly an alternate view moved to the front burner might be pushed off the stove...
Should $XLF push above its February 2011 peak of 16.86 over weeks ahead, then alive is possibility an a-b-c corrective wave up from March '09 bottom is completing. This would open the door to a devastating crash subsequently. Full punishment due an obscenely leveraged banking system might then ensue. Indeed, the way forward could be far worse than anything ever put forward here...
Same chart, much deeper drop and stat. Ultimate objective is "the fourth wave of one lesser degree" (this according to the Elliott Wave Principle). The fourth wave of wave (III) unfolded from 1966-1974. Thus, the S&P 500 could be heading for 60. That's right: 6-0.
If the EMU blows, I will be the last person on earth to think lenders of last resort have hope of containing the fallout. Been there, done that. It was September 15, 2008 and the days following Lehman Brothers' collapse. So, as the euro-zone is flaring up again a dire light might be better thought rising above the horizon. It's the Spanish banking system, it's French elections, it's Glass-Steagall in Italy, it's German constitutional court challenges — not even the victims of Capone's Valentine's Day massacre were so bullet ridden! What's more, opportunities to tighten the bandages are not what they used to be. Much already has been bled dry, as worsening social conditions spreading throughout the euro-zone's periphery testify. The EMU's funeral could be here in the blink of an eye, and in all probability the event will not be pretty.
Going into this summer, then, cyclical guideposts mentioned Saturday could find wave 3 of C of (IV) unfolding, rather than the far less severe drop I detailed. Thus, waves 4 and 5 could coincide rather harmoniously with the cyclical outlook reaching out to 2021, this along lines I likewise mentioned.
Everything technical still is a mess. All presents weakness, yet still the market maintains its levitated state. Plainly, every minute still counts. So, the countdown to whether there are enough minutes remaining for Facebook to go public is officially on. It just might be the trans-Atlantic banking system needs the capital more urgently.
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