Bullish Stampede Persists

By: Joseph Russo | Sun, Aug 23, 2009
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Buy the DIPS or just HOLD
For those adopting such strategy, we suggest using one hand to hold your nose, and keep your free hand at the ready in pulling the sell-trigger when appropriate.

We have not changed our view from a few weeks ago, which opined that our trusted shepherds of illusion would like nothing more than to ignite another long-term cycle of buy & hold fever as the only means by which participants can hope to survive amid the artificially created buying frenzy. As the desired bullish stampede persists, the results of their handiwork must now have them nearing multiple interventionist orgasms. Are you about ready for a cigarette Ben, cigar, or perhaps reappointment to another term as worshiped god and savior of all humankind?

The market's upside persistence continues to astonish and perplex
As far as we are concerned, until price action dictates otherwise, we remain long-term bearish, intermediate-term bullish, near-term bearish, and following a phenomenally bullish week of profits at Level-V, we are now beginning to turn short-term bearish.

Level-V trading operation roars back to fresh all-time highs
After moving long upon a counter-trend buy-signal amid Monday's sharply lower open (when all were convinced a correction had finally begun), our Level-V short-term trading methodology, which typically signals much quicker exits, kept us long throughout the entire weeks bull rush. All told, by week's end Level-V had amassed over 300-Dow points in profits.

Of interest relative to this specific level of engagement is the major 116% one-month drawdown in open profit from 495% to 360% that occurred amid the one-way stampede ramp-up rally from the July low. Once the markets began to finally register adequate levels of oversold from which to launch counter trend buy probes, we started clawing back at reclaiming ground on the steep July drawdowns. Had one began trading this method with us in July, they would have been totally wiped out within a month. In contrast, those with plenty of skin in the game sucked up the big drawdown as a cost of doing business. As the open equity graph below shows, our most recent long trade established last Monday has launched the single contract futures performance to fresh all time highs.

Probably not quite as impressive in comparison to the proprietary trading desks at Goldman, nonetheless, we'll take what we are able to, and maintain adherence to our disciplines win, lose, or draw. Active traders must remember that losing and drawdowns are an essential part of the trading process no matter ones timeframe, strategy, or objectives. Those who lack discipline, lose patience, and run for the hills after the first rough patch of price action or series of drawdowns, are destined to remain consistent losers throughout the entirety of their trading careers.

Green shoots in full bloom for Goldman
We would not be surprised if this elite bellwether of the financial sphere continues its miraculous V-shape bailout recovery from the abyss until its 2007 highs are retested or surpassed. We can also envision an abrupt end to what may be an irrational false dawn in the audacious coup to maintain the financial spheres "WE FIRST" monopoly over the real economy.

Elliott Wave Technology vs. the DOW
The bar chart below reflects Elliott Wave Technology's premium advisory performance results vs. the Dow. There is no doubt that recent conditions have perplexed the vast majority of seasoned participants, including us. We expect such periodic challenges, and intuitively adjust our perspectives accordingly.

The mainstream take is that institutional money managers are leading the fed-induced bullish stampede to the upside. All we can say is "Let it Rip" people, but STAY NIMBLE or risk slaughter with another imprudent long-only buy and hold strategy.

For those who wish to obtain a visually graphic, easy to understand actionable guide to the various disciplines and real-time actions needed to achieve a broad array of objectives at every level of market engagement, look no further than Elliott Wave Technology's PLATINUM publication. Those with a more narrow focus may select from the below list of PLATINUM'S three subsidiary sister publications.

Three More Options:


1. The express focus of Elliott Wave Technology's Near Term Outlook is to provide equity index traders with actionable guidance over the near and medium term.

2. Our Position Traders Perspectiveprovides actionable guidance for longer-term time horizons.

3. EWT's Day Traders Perspective assists short-term traders in executing proprietary methodology for capturing price moves of shorter duration.

Elliott Wave Technology's PLATINUM 500 CHALLENGE:
In our effort to serve and empower as many individuals to trade profitably amid the sharks on the street, over the coming months we will be announcing the availability of $500 PLATINUM service coupons. We shall award these incredibly generous service coupons to select individuals who apply and qualify for entry. We will let those interested know when entry applications for the challenge become available, and shall announce further details of the PLATINUM 500 CHALLENGE as they develop, so stay tuned. If you are interested in pre-qualifying, send us an email containing "PLATINUM 500 CHALLENGE" somewhere in the subject line or body of the email. We will place your email address on our secure list of PLATINUM-500 applicants, and keep you apprised of further developments and qualification criteria.

Until then,

Trade Better / Invest Smarter...



Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the dot.com bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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