I’m still seeing smart money selling into strength time and time again; a clear indication of distribution. As such please take on LONG positions very carefully at these levels as the risk to being long at these levels is compounding every day especially in over-bought technology and consumer-cyclicals and retailers  Strap-yourselves, as it is sure to be another wild another wild rollercoaster ride!! The question is do you want a ticket to partake of this amusement ride     I believe we are close to another major inflection period for the markets, so please trade cautiously and be quick to protect profits.   Please remember folks there are usually 7-8 bullish (participants) to every 2+/- bearish traders/investors, so the propensity for bullishness is almost always stronger, as no one wants to be a party pooper, especially those funds that are playing with other people’s money as they attempt to pad their books into their fiscal-year end! However the reason that the market usually drops 4-5 times faster then it goes up is liquidity, when selling picks up is a contagion and the lack of buyers due to fear, can feed on itself very quickly like a plague or a quick acting cancer, as such markets plunge (normally) quicker than they go up!   

I'm still bearish right now (see my technical section below)....and I will utilize any bullishness on Monday to establish some longer term (2-4 month, Short positions *or Puts* as we would need to breech the relative near-tern highs for me to change my bias outlook....as such I'm looking to establish call positions and outright positions in the inverse leveraged funds....see a partial list below (we could also use a put-write strategy as well (example of a put-write play, we could write/sell the January 2010 SDS  $36 strike puts for $1.92 taking in $192.00 per contract, if they are pus to us at $36.00 we have a built in protective stop-loss of $1.92)....I'm also looking to SHORT a host of high-beta high P/E stocks as well (like  AAPL, AMZN, PCLN)   In a nut shell I'm looking for the resurgence of a very significant correction to take the bulls by the bulls in the days/weeks ahead and slap the bulls about...as the greenback is more oversold than at any time in history, way to many folks all leaning to the Short-side of the dollar market!!     See my in depth analysis below of various market conditions!

The biggest rally in the greenback since January created a major stall and retracement in commodities and related stocks on Friday and mitigated the initial gains in equities experienced due to an unexpected drop in the unemployment rate triggering a reversal in sentiment and bets that the Federal Reserve will raise interest-rates/borrowing costs.

Odds that the Fed will boost interest rates by its June meeting increased to 53% from 31% a week ago, according to the Fed-head funds futures. The pro forma decent economic news was a boost for the dollar, because ultimately the Fed-heads will be forced to raise rates, and by raising rates you are going to push your currency’s value upward.  

Stocks rallied at the start of trading right after the bell after the Labor Department stated that the U.S. lost only a mere 11,000 jobs this past month, the fewest since the recession began and less than 1/10 the 125,000 expected.

If we believe this fuzzy-math-jobs-data…then the improving labor market must indicate that the nastiest deepest recession since the 1930s is now history, though it’s really too darn soon to say precisely what month it stopped if at all. Friday’s jobs report makes it seem that the trough in employment is just around the corner and may even be this month (I do not yet buy into this premise at all).  

The dollar has been pummeled this year, spurring what I see as a false real-demand for commodities as an inflation hedge and alternative investment, as the Fed-heads (who are just puppets for the large lecherous banks) have kept the benchmark interest rate near “0%” in what they claim has been a very successful endeavor and an effort to revive business and consumer lending following the worst financial crisis/debacle since World War II. Before today, the Dollar Index has plunged 8.5% while gold rallied 38.7%. The Reuters/Jefferies CRB Index of 19 raw materials lost just a mere 1.0% on Friday paring its 2009 rally to 19.1%. Gold as I had forecasted dropped significantly for the first time this week as the rising dollar spurred some investors to trigger their sell buttons on the yellow-metal on the heels of a recent new-high-rally setting a new record.  

Friday’s price action in the markets was very telling for me. The dollar carry trade remains in vogue and technicals continue to dominate overall money flows much more than fundamentals which seem to have been ignored for many months now. If you recall that the weakness in the greenback has facilitated a very large number of hedge funds, market speculators (GS, MS, BAC and JPM trading desks) and to a less extent hedge funds and institutional investors to borrow dollars and buy a variety of riskier assets (equities, commodities and other currencies and bonds); equities including a wide array of bonds a basket of commodities, gold, silver and other precious metals as well as other commodities have been the momentum playground of choice!  

On Friday after an initial Gap-up spike of 1.25-1.50% across the equity markets, these major market averages retraced and dropped into the red-zone before late day-dip buying adjusted the majors into the green….thanks in part to several upgrades in the semi-patch and telecom patch....now we have to ask is that a sign that investors were not believing in the details of the employment report (as I thought); or was it more. In fact, I believe the various index performance today was somewhat bullish late in the day (ahead of potential GAP-up-Monday) given the fact that the greenback as I had forecasted has started a potential relief rally (up 1.45%) and gold dropped 55+/- points.  

Bonds sure traded like they were bi-polar as they clearly had a crazy day with the market experiencing a mega gap-up on the jobs data and the thought-pattern was switched to one of new expectations that the Fed-heads as numb as they are will be hiking rates sooner than most had previously thought. The 5-year gained 12.0-bp the 10-year swung over 13-bp on the day ending up 10.3-bp while the 2-year had a wild ride of over 16.0-bps on the session. There was nothing but good headline-hyped positive news in the (still negative, from my vantage point) jobs report, and many were left wondering what path rising bond yield will have and their impact on housing and borrowing costs…. At first blush (headline driven) things did appear, to be trending better in the labor world (but fuzzy-math accounting trickery abounds), and with an upside surprise on the factory orders number the sentiment grew! The bond market will now turn again (after a back up in yields) will have to focus their attention to this weeks auctions, with the at-record $40.0 billion in 3-years and the reopening of the 10-and-30-years of $21-billion and $13-billion respectively.

The auctions will likely go off well as even with the so called better-than-expected” outlook on the economic horizon as the market is still looking at some year-end activity as well as all those pessimists who do not believe a couple of good numbers a robust recovery makes….and that these numbers are seasonally adjusted.  

The dollar was on a tear, taking a run at the 76 handle on the index and looking to clear 76.10 level before stalling…the euro was clobbered, trading back to the 1.4822 point and likely looking at the next level of support at eyeing 1.4696. The week ahead has some mid-tier data that will be watched as the market looks for added "positives" going forward but the auctions will be the main event.  

The dollar was able to stage a decent relief rally (or is breaking out of the falling wedge pattern, time will tell)  but nevertheless it posted a solid up day (finally), seeing the biggest run in nearly a year, as the market started seeing the Fed-heads potentially raising interest rates at a steeper, faster, and stronger clip. The greenbacks price action helped to weigh negatively on stocks, while commodities got clobbered with the CRB index off nearly 3.0%. Please remember that I have written and spoken about many times that the market was extremely-tilted as I say “way…way…way too short the buck” a carry trade that is extremely crowed and with the thin market expected for the remainder of the trading year (just 18-trading days left to the 31st) to year end the bond market is very-very vulnerable in my opinion to “crazy-wild-swings” This week could be very-tricky, with the a fair amount of data hitting throughout the week there will almost certainly be some hardcore trading action as well as just dealing with thinned, year-end trading volumes…like we see in equities.  

If rates do rise here and the dollar-carry trade deteriorates what does that do for the dollar and equities…I believe that it will do far better and it is doing, and we could see a multi-week rally in the dollar (good for our long UUP position) significantly more than we saw on Friday. If as I have forecasted the dollar improves, money will be stripped out of the proverbial commodity havens to which it ran into on the vast dollar-carry trade to protect against further drops in the greenback, and these havens have been gold, silver and various other commodities like crude, coal, food-stuffs, and agri-products.  

I still have my eyes most closely fixated on the greenback. As the greenback goes one way, I still believe the equity markets, bond markets, and commodities will go the other. 

Retail Sales are this week’s big data point….due to be release on Friday, December 11th, November retail sales are expected to show a monthly gain of 0.5-0.7% depending on the numbers used, against this past month’s (October’s) 1.4% significant increase; I believe that the risks are to the downside of the consensus especially after reflecting on the retail sales numbers released this week, retail sales should show no meaningful growth, with a potential downside bias.

I’m now after reflecting on the dismal retail sales numbers this past week a new wave of retail bankruptcies and closures is looming and they will hit the markets in my opinion right after the holidays…..I know that some of you will have a hard time believing in my premise as those on bubblevision have either down-played the data or ignored reporting on it but we have seen that retail-related bankruptcies have been on the rise all year. I expect significantly more heading into 2010 in the wake of downtrodden consumer confidence, very tight credit, Americans with vastly underwater mortgages and rising unemployment. These past several years has been very tough on the various number of retailers, their landlords (real estate REITs) and numerous suppliers, and I expects more of them to pack close up shop after the lackluster-sales drive them to despair after the holidays.

Of interest for next week is $135 billion in new debt being auctioned. There is $74.3 billion in 3, 10, 30-year notes/bonds and $61 billion 3 and 6 month bills. The Treasury will sell $40 billion in 3-year notes on Tuesday, $21 billion in 10-year notes on Wednesday and $13 billion in 30-year bonds on Thursday. Those 30-year bonds will be the most watched auction of the week.

What we need to start thinking about the start of confessional season starting this week and next as I expect 2009Q4 guidance (especially in the retailers and technology) to be coupled with earnings warnings. We are approaching the middle of December (time flies when your having fun) and this is the period where major firms (watch the banks stealthily play out their warnings) will start giving guidance updates for Q4. This is not as prevalent as in years past since most firms are beating earnings from massive cost reductions (lay-offs and expenses)..

We saw further economic contagions this past week that went underreported, that will weigh on the economy, retailers and banks as the total number of bankruptcies filed in the third quarter this year surged a whopping 33% and is at the highest level since early 2005, according to the American Bankruptcy Institute, they stated that 388,485 bankruptcies were filed during the past quarter, compared to 292,291 filed during the same period in 2008, according to data released by the Administrative Office of the U.S. Courts. The report showed that new bankruptcy filings for the first 9-months of the year increased 35% to 1,100,035, compared to 841,496 filings during the same period in 2008.

The spike in bankruptcy filings for both consumers and businesses reflect the continuing effects of today's weak economy. With unemployment surpassing 10% and credit to businesses remaining extremely tight, consumers and businesses are increasingly turning to the financial relief of the bankruptcy-system. Bankruptcies are at the highest level since 2005, right before the Bush Congress passed amendments to the Bankruptcy Code, making it more difficult for average Americans to file.

On Friday Gold futures on the COMEX saw the biggest decline in almost one year, and plummeted to a one-week low on Friday, due to profit taking and the strength in the dollar (carry trade un winding) as the greenback rallied sharply on much-better-than-expected job data….we saw that silver and platinum both dropped as well.

A report from the Labor Department indicated the U.S. employers cut 11,000 jobs last month, the smallest monthly loss since December 2007 and much lower than the 130,000 losses economists had expected. Meanwhile, the unemployment rate fell to 10.0% from a 26- year high of 10.2% in October.

After the encouraging data, the dollar index, a gauge measuring the greenback's value against other major currencies, leaped more than 1.4% to a one-week high of 75.73 by the end of gold floor trading time, leading investors to sell off the precious metal to pocket profits after a huge rally in recent sessions. March silver was down $0.608 to 18.52 dollars per ounce; and January platinum dropped $44.50 dollars to $1,449.70 an ounce.

CRUDE in my opinion is looking ripe for a significant correction to the $53.00-$56.00 dollar level per barrel, hence why I have established a long position in the DTO (inverse leverages ETF “short”) and why I recommended short positions in HES, OXY, OIH, and USO (we have puts in the USO and OXY)! The contango situation is a very crowed dollar-carry-trade right now and if the carry trade starts to unwind this situation could deteriorate very quickly

• The API data released on Tuesday this past week showed that showed crude stocks rose 2.9 million barrels during the week while Gasoline stocks rose 3.4 million barrels and distillate stocks rose 1.1 million barrels. Refinery utilization jumped by 2.6 percentage point to 82.2% of capacity last week, the API report stated.

• U.S. crude oil inventories rose far more than expected last week (bearish signal) as refiners curtailed operations while gasoline stockpiles jumped on weaker demand for motor fuel, according to the EIA said in their weekly data release on Wednesday. Commercial crude stockpiles in the US gained 2.1% million barrels to 339.9 million barrels, the EIA reported stated. Meanwhile, gasoline inventories increased by a whopping 4 million barrels last week to 214.1 million barrels, four times the average estimate of a 1 million-barrel rise.

Also there is way too much pumping and storage in “Oil Tankers” and holding-facilities as for a while now, the oil majors and seasoned traders, trading-desks, hedge funds, pension funds and speculators with access to cheap credit (dollar-carry-trade) have been scanning the horizon of wider macroeconomic data for signs of a turnaround in the global economy that could support fuel demand which has been weakening and so far (out side of Friday’s hyped jobs pro forma data) no such data has been forthcoming, as demand is lackluster at best! Many times in recent months market participants have got carried away by a wave of macro and micro economic data and have lost complete focus of the underlying supply and demand curves regarding crude (basic economics). The recent crude inventory reports suggest that demand for crude and gasoline isn't even moderately strong. And as such crude prices are likely to come under some significant selling pressure as we close in on the end of the year because there is more than ample supplies of crude and weak demand continues to persist.

Unbeknown to those pumping crude on the various bubblevision networks as they are ignorant of real-facts, (as they are to busy hyping their own positions and books)….the various oceans continue to be the world’s biggest crude storage facilities as fleets of oil tankers (positive for tanker-firms) are just floating and its estimated that they are currently holding an estimated 110+ million barrels of crude products, most of which are distillate fuels like diesel and heating oil; while crude volumes in floating storage are estimated at around 35+ million barrels. Worse yet emerging nations and even those in OPEC are pumping crude at break-neck speed to try and capture the current rates, while demand wanes! 

As HeatingOil.com reported last month, there are currently 135 oil tankers at sea holding crude products until it becomes more profitable to sell them. This is in addition to the record amount of oil stockpiled in traditional storage. Experts expect demand for crude to pick up sometime in late 2010. However, the amount of crude currently stored at sea is so massive that it could meet all of next year’s expected demand growth, leaving onshore stockpiles untouched. A record number of tankers are storing crude and oil products, driving up charter rates to their highest since the first quarter of this year for some sectors. The number of tankers deployed for temporary storage jumped by 20 in a month to 149 by the end of November. They include 37 very large crude carriers, 17 suezmaxes and 95 long range product. 

That is why crude right now is in Contango! It basically means that a commodity like crude will sell for more in the future than it at the current “spot” price. This historically occurs when there is an oversupply of a particular asset/commodity. There is currently a very steep contango in the crude and heating oil markets due to the record high inventories of products and distillate fuels being stored at sea and on land.  

Crude players and speculators with access to cheap credit have been buying gas and oil, and storing it on idle tankers in sheltered inlets around the globe in the hopes of selling it at a higher price later into the future.

I read that near England there is a fleet of nearly 40 crude tankers, each with hundreds of thousands of barrels of crude and distillates that have been anchored several miles off the southeast English coast in recent months. The heavy traffic stems from near-record crude supplies (lack of demand) a by-product of this recession that is prompting producers to store crude offshore until they can find end-users. The price premium of crude contracts dated further in the future relative to near-term contracts has made it very profitable to buy crude, store it on a tanker for several months, and sell it later at a healthy premium. This contango affect has been heightened by speculative market players buying crude/energy contracts far into the future, as they place a plethora of bets that supplies won't keep up with emerging-market demand down the road because of political or OPEC barriers that could restrict production (a bet that with a surging greenback could be nastily unwound violently). 

Most are oblivious to this ploy/situation as their buying for storage at sea, dubbed “floating storage demand” by these physical traders, has created the illusion of real consumption in the end market (and this is not so, as the data has shown), but nevertheless this illusion until known or violated helps keep recent profit margins for distillates positive….which in turn has sent a false signal to refiners to keep churning out refined product! 

Refiners are reeling from the effects of a weak-demand (hence the pull back in VLO and TSO), as high-supply market as relatively high crude prices and low demand for refined products have cut deeply into their profit margins, leading to refinery shutdowns and layoffs. We saw that recently Valero, the largest refiner in the US, announced plans to shut down its Delaware refinery and lay off those workers.

Despite this, the US Department of Energy's EIA reports that the amount of capacity US refineries used in the last week declined 0.6% to 79.7%, when the market had expected the utilization rate to rise to 80.6%. The refinery utilization rate is significantly depressed compared with similar periods in previous years, when it has usually run in the range of 87% to 89% of capacity.

As we saw above the US which is still the world's largest energy consumer, when coupled with the latest data suggests that the US economy is still weakening somewhat more than previously projected (despite the hype and hopes). Rising crude and gas stockpiles in the US point toward lackluster demand and is an indication that many parts of economy may not be recovering as fast as initially anticipated; as these rising inventories and lower activity in refineries are pointing to depressed demand for fuel, which may be a reflection of recent signs of weakness in US manufacturing and services.

How is this bullish?      Some experts like Cramer and Kudlow have repeatedly stated that the housing market has already bottomed (back in May), but one statistic indicates otherwise and defies their so called logic. The portion of U.S. homeowners who are “underwater” on their home loans (that is, they owe more on the mortgage than the home is worth) surged to a whopping 24.5% in the third quarter, or almost 10.8 million households, according to First American CoreLogic, a real estate research firm. Many of the underwater homes will ultimately end up in foreclosure.  Of the 10.8 million homes underwater, nearly half have a mortgage that is at least 20% higher than the home’s value (a huge negative contagion as this amounts to almost 6-million homes), according to the data compiled by First American CoreLogic. More than 520,000 of these homeowners are already in default on their mortgages. This is a huge over-hang of risk in the mortgage markets that no one is talking about or addressing.  Some homeowners who are underwater are fully capable of paying their mortgages, but they are in the elite group or top-wage earners that are ditching their homes anyway to the tune of 590,000

Well-worth the look.......It was strange to read this week that Treasury Secretary Geithner disputed claims by Goldman Sachs executives that the bank could have survived the financial crisis without government help and said it and other Wall Street firms should show some restraint in handing out bonuses this year…the words are lacking conviction though! 

He sated that “It is very important that we change the way these executives are paid, the form of compensation, this year,” “We have to end that era of irresponsibly high bonuses.”  President Obama has blamed compensation tied to excessive risk-taking for fueling the deepest financial crisis since the Great Depression. Goldman Sachs, Morgan Stanley and JPMorgan investment banks are set to pay record bonuses this year, despite the markets being hit hard….what’s interesting is that the markets are significantly below their 2000 levels and will post a loss for the decade of investing unless we see a miracle run into the end of the year….so after 10-years of investing from 2000-2009 you would have negative returns, however Wall-Street has been very enriched, as collectively bonuses paid out have risen compounded by 805% in the past 10-years! 

Goldman the poster child for insider-playing set a Wall Street pay record in 2007 when their compensation totaled $20.2 billion, including a mere $68.5 million for chairman and chief executive officer Lloyd Blankfein, but its expected that bonuses will vastly eclipse that make this year! 

This week Geithner, stated that many if not all of the too-big-to-fail banks could have failed  stating that the entire financial system was at risk at the height of the crisis, including Wall Street’s biggest institutions. “None of them would have survived” had the government stood aside and let the crisis run its course, he said. “The entire U.S. financial system and all the major firms in the country, and even small banks across the country, were at that moment at the middle of a classic run, a classic bank run.”

I am seeing several things happen across various sectors that has me very perplexed. One is the Apple deterioration and RIMM decline, another this year-end-airline rally out of the clear blue sky and lastly what the heck is happening in chip-land and semi-land as the recent chip/semi rally alone has kept a significant floor under the Nasdog as the semi rally last week was stealthy and it was substantial as the Semiconductor index rocketed over 8.1% for the week (and the fundamentals are crummy as many firms have experienced double bookings in my opinion). You would think somebody raised the all clear flag you can press into the semi/chips into the end-of-the-year the momentum is clearly the bulls to lose.. The SOX has significant OHR at 346-350 and if the bulls breech this level to the upside they could be off to the races (I will be shorting 350+/-)  semi sector has suddenly caught fire as we head into year-end.

We have consistently seen these past weeks that the stock market has been on a consistent bullish run since it bounced off the lows in March 2009. As stocks (especially high-beta and crap-stocks that have been placed on the HTB-lists) keep hitting new highs for the year, driven by the prospects (hopes and prayers) of a so called vast and global economic recovery, and many value investors like me are more than concerned about these lofty valuations. The P/E ratio on the SPX, for example, has risen to its highest levels in many years (depending on the calculations 27, 39 and 56). In addition, many once highly sought after dividend stocks, which were once selling at very attractive valuations just a few months ago, are now very expensive.

There are several ways that the market could correct this imbalance. First, since the market is typically a strong indicator that predicts contractions and expansions in the real economic cycle much better than most economists, the current bullish trend could be a forecaster of real economic growth if it were not for the direct massive manipulation (dollar-carry-trade, the every-manipulative “HTB” hard-to-borrow-short lists, the anemic volume vs. historic volume induced by the propriety trading desks and the vast-chase to maintain/catch up to market performance by the fund-managers etc to name a few). Historically a real recovery for end demand would lift earnings, decrease unemployment and bring valuations down to a more reasonable level, without causing any pull-back in the indexes or stocks. If the market is way ahead of itself however (as I believe) it could easily pull-back after the chase for performance ends; or the carry-trades unwind! I believe we are very close to the latter as after 60-70% or pent up profits (more for various equities (just look at the 6-horsemen-technical section below) a significant pull-back is warranted which would bring valuations to more reasonable levels.

Another option to consider is that I’m dead-ass-wrong and that this is truly a masked mega bull-market and that the market doesn’t correct but keeps roaring higher, propelled by expectations of stronger corporate earnings (see the section on corporate earnings at the end of the weekend report). As the hype goes when earnings rebound which they surely will stocks won’t look as expensive as they do today.  The indexes could continue climbing the proverbial wall of worry far longer than anyone could stay sane (I remember signaling a bubble top to the markets in November of 1999, but the Nasdog and indexes surged for 4+ months thereafter before collapsing).   I will probably miss the last throws of this rally, if it continues as I did then as I do not always have the stomach to play hot-potato (better know as the greater fool theory of investing) If the indexes were to keep going higher in a straight parabolic line and if the Dow and the SPX surge in the process, I might for a bit be kick myself in the ass for “missing the proverbial train” but like happen in 1999-2000 and 2007 I will eventually be proven correct and I will hopefully be savvy enough to reap the vast rewards of my analysis.

Even after the stunning stock market losses people were suffering at this time last Thanksgiving and now we can reflect on the tremendous gains the market has bestowed since the March lows. Yet for those poor folks who closely watch the fate of their money that they put into 401(k)/IRAs the gains of the past 12 months have failed to provide much solace. As folks who blindly followed wall-streets advice and invested money at the start of this decade in the SPX still have 25% less of it, excluding dividends of course which have been evaporating an alarming rate!  Many Americans remain deeply worried about their money and have grown increasing mistrustful of Wall Street and the government leaders entrusted to watch over the financial systems.

This sentiment may weigh on the equity markets in the future: I believe that this rally is very fragile, and cash from individual investors and others is desperately needed to build on it (what I so often refer to as a new round of bagholders).  After two 50+ percent sell-offs in the stock market in less than a decade (Dot-Com bubble bursting and then the Credit-Debacle), a near miss with anther depression and an unrelenting unemployment rate that keeps crawling higher, folks do not feel safe at all to re-enter the shark infested investment-cesspool, so where is the next round of bagholders going to come from? 

Those on the various bubble-vision-networks want us to believe that in general investors should be acting like they are on the top of the world after this year's monster relief rally from the March lows. But as many Americans stand back and compare the stock market rally to that of the actual economy (the economy where they reside) an atmosphere of distrust as once again those on Wall Street reap the huge rewards (made with taxpayer and other people’s money) and the average American doesn't get anything of substance once again; as such there is I believe a growing sense of unfairness and bewilderment.

The reluctance to trust Wall Street and the stock market has shown up in overall investing behavior. To observe individual investors, I like to watch the flow of money in and out of mutual funds. During the market downturn between October 2007 and March, investors pulled about $215 billion out of U.S. stock funds, according to TrimTabs Investment Research. And early in the current rally, investors put about $30 billion back into the stock funds…a huge disproportion of funds. But since then, the money that went into the stock funds has been started to be withdrawn, and investors have preferred the relatively lower-risk bond funds, pouring in over $340 billion this year.

Since this bear-market leg has started we have experienced 2-distinct and significant relief up-waves (wave 1 and 3 of a 5-wave pattern) and now we are embroiled in what I believe is the third (wave 5) and last wave up in this corrective pattern what I believe is a (B) wave up and I believe we are very close to finishing this up-wave!

According to my wave analysis the 1^st sub-wave of the (B) corrective wave up was (a) which lasted 68-69 trading days from 3/6/09 to 6/11/2009….thereafter the second wave (b) down lasted from approximately 6/11/209 to 7/8/2009 a mere 18-trading days….and this was a very shallow retracement….here is the tricky part if wave (c-up of the B up corrective wave) tops in the next 5-10 trading days (likely in and around my next inflection period (11/6 to 11/13, we have a weekend and a holiday Veterans day on the 11^thin the mix) it would mean that the (c) wave lasted approximately 68-up-days plus 18-down-days or 86+/- days now not all Elliot-wave patterns are exact-linear-counts but I would pay particular attention to the 11/9/2009 date as it would be 86-trading days from the 7/8/2009 bottom!      

Now for my bullish friends….I am issuing a serious red-flag-warning as if I’m correct and I believe that I am, when the up-leg of this (B) relief rally is completed…we will become embroiled in a very-nasty (many will be in the land-of denial) plunge, and this will be the third leg of this bear-market super-cycle-down-draft, and this plunge will catch many if not all of the perma-bulls in a state of shock and utter denial…I believe that history will be repeated and we will unfortunately plunge our economy into a deep and protracted recession (hopefully not another great-depression) 

VOLUME on the bullish side is worsening as the days wear on.....When I see decisive breaks below the bottom boundary lines of Rising Bearish Wedges for the Dow, SPX, and NDX I will be announcing that a major/major top is occurring. I’m also seeing increased bearish divergences between price and actual market breadth, price and volume, and price and momentum indicators that I follow for longer-term significant market moves. Please watch the weekly MACD indicators which are showing very distinct signs of respective topping patterns in the various indexed and are now starting to curl over which is a very bearish signal.  The concept behind MACD is fairly straightforward. Essentially, it calculates the difference between an instrument's 26-day and 12-day exponential moving averages (EMA). Of the two moving averages that make up MACD, the 12-day EMA is obviously the faster one, while the 26-day is slower one. In their calculation both moving averages use the closing prices of whatever period is measured, in the sector I watch for longer term moves (I use the weekly chart). On the MACD chart, a nine-day EMA of MACD itself is plotted as well, and it acts as a trigger for buy and sell decisions. MACD generates a bullish signal when it moves above its own nine-day EMA, and it sends a sell sign when it moves below its nine-day EMA