King Ponzi Feeds Capo Successor a Recipe for Melt-Up ~ The Risk Averse Alert

Friday, June 07, 2013

King Ponzi Feeds Capo Successor a Recipe for Melt-Up

This just in from left field: what if what's good technical news is very bullish at the precise moment an Elliott wave analyst could, and really should, expect it to be?

The markup above more or less speaks for itself. The S&P 500's weekly RSI and MACD are technically strong and this is coincident with the S&P 500 breaching record territory, as well as a long-term, dynamic line of support-resistance dividing "3rd waves of 3rd waves" in the S&P 500 going back to the early-1970s. Is the market about to explode to the upside and go some distance toward finally completing its march higher off March 2009 bottom?

A guest post at Zero Hedge about a week ago alerted me to that line of dynamic support/resistance. You might recall this particular line has been on our radar, too. Its upside breach last month coincident with the S&P 500 rising to a new record, all the while generating the best weekly momentum since March '09 bottom, could be significant. Wave iii of 3 of (c) of B upcoming would be setting up a moonshot here. Its launch might even commence with haste. Technicals really are great here notwithstanding that, [the dead horse] volume ever remains relatively muted in the face of persistent price strength.

To now we have been anticipating momentum rolling over (see MACD) like happened in 2010 and 2011 before supposing any significant top might be in. No reason why a different turn of affairs could not transpire presently. Though a curve ball not before seen here, tonight's pitch nevertheless.

King Ponzi today on CNBC implored that, Confetti let rates increase ... gradually.

Yet has this gradual increase not already become an established trend in the age of infinite QE? Is Greenspan rather admitting the Fed is quite at the point where its hyperinflation is more likely to accelerate parabolically, sending bonds reeling in increasing competition for hot money flows otherwise fleeing currencies of economies to be crushed by rising rates?

Capital's flight to the core really has been the way of developments more or less since the market's recovery began in 2009. At this point it really doesn't matter if Confetti raises rates the old fashioned way or the new, Princeton Venetian way. As you can't teach an old dog new tricks—this goes for King Ponzi, as well as today's Capo—it's possible Greenspan's talking rates up ultimately will have the effect of making Bernanke bail harder.

Now, this is a very late point in the game since 2009 bottom, yet "rules of the game" now well-established might be about to reach a crescendo in their absurd effects. Meanwhile, the January 2014 expiration of the Capo's reign lurks in the background, along with prospects for further weakening the presidency and the Democratic party quite possibly. as we;;. A market screaming higher, then crashing before the end of the year could set up very well for significant changes next year.

An a-b-c "zig-zag" up from March '09 bottom could be about to complete in a melt-up like never before seen. This, then, would end wave B of an "irregular flat" forming since Y2k. Wave C down subsequently would be slated to complete this flat. That upcoming decline would target levels the S&P 500 printed last in the 1987-1994 period (a very much still living prospect by this and other Elliott wave-based views). The market's collapse slated for later this year likely would bring but the 1st wave of 5 ultimately slated to form wave C down.

As I said, this is very late in the game. Yet better late than never could be about to register its most glorious moment ever. That is at least according to tonight's view, albeit one straight out of left field to be sure. Notice it, though, we better. Again, the underlying fundamental impetus might be summarized an acceleration toward the even more absurd. After all, Greenspan did note that, risk premiums make stocks a very attractive investment. Surely, this is one person in the age of Ponzi finance whose analytical record is well-proven, if mainly by his use of such well-timed terms as "irrational exuberance.' He is no fly by night observer like me and everyone else on the planet.

Word on the Street
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