Triple topI'm looking for the mkt and financials to put in a triple top which is the inverse of the late Aug bottom. Yesterday was the first top imo. Financials put in a bottom today. Two more similar tops are coming, and then I think the mkt is ready for the big collapse. At the pace we are moving with one top taking 2 trading days, we could be only 4 more trading days from the start of the crash.
My timing cyles also indicate that time is just about out. There may be a few more days in there or something for consolidation but the pace is quick right now. Forget the elections or Fed meeting in early Nov, unless the pace slows, this mkt will be lucky to hold up until the end of next week.
I thought financials would have rallied stronger than they have already. They are weaker than I thought and that is very bearish. The S&P keeps moving higher but financials are much weaker. Financials have been known to "play dead" and then spike higher all of a sudden though. So far no sign of this happening, but I'm keeping an eye on that possibility.
Bulls are getting cocky:
Cramer: Bears Can't Stop Us Now
It is incredibly foolish for investors to rely on the Fed to hold up this mkt. Investors equate the March 2009 to April 2010 rally to the Fed and stimulus. This is incorrect. The mkt bounced back from a highly oversold condition due to improving perceptions from investors (or is it just purely greed). Meanwhile, the economics have steadily deteriorated throughout this rally.
The bulls are nearly all in, and the bears are capitulating. Who is left to support the mkt?
The mood on the way down will be positive: it's just a pullback, QE2 coming soon, mkt can't go down before elections, decent earnings etc... Surprise!!!
SC