Will Debt-Fed Dogs Be Goosed By Thinning Rabbit? ~ The Risk Averse Alert

Friday, November 29, 2013

Will Debt-Fed Dogs Be Goosed By Thinning Rabbit?

From the framework of a prospective Elliott rising wedge forming to complete the market's counter-trend rally off March '09 bottom if there were any moment ripe for relatively frothy trading, this is it. There would be no better time than over coming weeks for some technical measures to register their best readings in five years. This is on the assumption a 3rd wave of a 3rd wave has been in the midst of forming since early-October 2013 bottom: namely the rising wedge's wave c of 3. The rising wedge, itself, forming wave (c) represents yet another Elliott 3rd wave.

This is noteworthy because Elliott 3rd waves typically are the most technically dynamic. Thus, some technical measures could surprise to the upside over coming weeks.

Whether the NYSE Bullish Percent Index is one of them remains to be seen. Already in formation of wave a of 3 (see detailed Elliott wave count here), the Bullish Percent Index has bested its best wave 1 reading (shown via green line above). So, in this manner an Elliott 3rd wave's technical dynamism, indeed, already has been displayed.

Now, however, does the Elliott Wave Principle's "alternation guideline" suggest peak Bullish Percent to be registered during formation of wave c of 3 might not best its wave a of 3 peak, this because (in alternation) the wave c of 1 Bullish Percent peak bested its wave a of 1 peak? Sure does.

We see here, too, the Bullish Percent Index's best reading during formation of wave (a) off March 2009 bottom, which came at April 2010 peak, has not yet been bested, while at the same time the Bullish Percent Index's peak has been persistently diminishing, as well, at consecutively higher NYSE peaks since April 2010.

Would it not be fitting the tenor of "exhaustion" an Elliott rising wedge represents were this diminishing NYSE Bullish Percent Index to persist as the rising wedge continues to unfold? Sure would.

So, some technical measures soon might be seeing their best readings in five years. At the same time, some might rather confirm a troublesome pulse is beating beneath what otherwise appears glowing skin. The NYSE Bullish Percent Index just might be one of these measures. Still fading volume on the NYSE weighs its agreement, as it is getting rather late in the game to goose debt-fed dogs with a thinning rabbit.

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