whats happenin Dan, the action in the indices lately has been getting me very excited, ironically though cause im a big Bear, but this is the "breakout" / capitulation move we need for "The Top" to be in...
This pattern is earily similar to the 1929 1957 1987 and 2000 tops, with a 5 wave , reversed triangle ( looks like this: <) leading to final 'blow off' rally forming the the 'e' or 5th wave towards the upper, expanding ressistance line. the action in the indices screams manipulation and short covering all over it, production/manufacturing is now contracting, housing and credit are both not looking good either... yet multiples are expanding and bullish sentiment is increasing?
we are also late in this cycle and have retraced a significant amount of the 2000- 2002 crash which was wave A or 1, this retrace is either B or 2, and now we're looking at the C or 3 down coming...
the dollar is also looking ugly, bonds are getting a bid(thanks to the fed) and the metals are getting ready for the breakout leg that will continue the secular bull well into the next couple years...
im still adding to gold/silver, but ive been buying SDS (S&P ultrashort) over the last month, not trying to guess a top but building a nice position for when we finally reverse this crazyness... i will continue to add to this position especially w/ the S&P > 1400
THIS IS THE BEST OPPURTUNITY YOU WILL GET for an intermediate to long-term market short... we are reliving the 1920's as im sure you already realize but now the fed has the ability to support asset classes at the expense of the value of the dollar, so we will either get a market 'collapse' or the beginnings of a collapse that will be countered by inflationary maneuvers and the beginning to hyperinflation that is just around the corner anyway...
make sure that if you are taking leveraged short positions against the market you are also holding gold/silver in case we go into hyperinflation out of necessity (remember the fed will step in and pump money in (through the plunge protection team) when the economy shows the first signs of systemic deflation i.e a significant market downturn), this trade is a bearish play on the equites/gold ratio that protects against hyperinflation (long gold) and deflation(short equities) and allows us to profit as the equities/gold ratio heads lower, which it will.
