V-Spike in Equities Losing Momentum

By: Joseph Russo | Fri, Oct 30, 2009
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Hauntingly Familiar
In a recent update of our analog chart of the Dow on 10/23/2009, the results show a continued haunting resemblance to the behavior in data points exhibited in the Dow Jones Industrial average of 1930. The muted light-blue price series of daily closes illustrates the point at which the 1930 Dow reached its ultimate momentum failure. Pursuant to the peak achieved at its plateau in 1930, the Dow went on to lose nearly 90% of its value before putting in a final bottom in 1932.

The data series in black plots daily closing price values of todays Dow Jones Industrial average from the 9-March low in 2009. Todays V-Spike recovery in equities is thus far outpacing its 1930 counterpart relative to time spent advancing. The 1930's spike in the Dow lost momentum and reached its plateau after 5-months, while todays Dow is approaching its eighth month of advance. Of late, momentum is waning as a looming plateau threatens to mark its place in modern-day history.

Thought it took 17-months for the Dow to reach its noted 2009 low, it took only three months to establish the initial low that occurred in 1929. Despite the variance in time to reach initial shock lows, both markets have thus far retraced similar percentages of their initial losses.

In addition to complete visual guides to trading indices and forecasting markets, subscribers to any of our premium advisory services listed below will soon receive fresh updates to this and other fascinating analogs, which include wave-labels, degrees of trend, proprietary wave counts, and alternates, along with specific turn periods on the horizon.

Irreparable "system as a whole" insists upon Flirting with Disaster
Whether or not history repeats itself for better or worse, it most certainly appears that it often tends to rhyme rather well. The efficacy of such tendencies is one of the hallmarks of technical analysis. The one incontestable element of certainty amid the ball of confusion spun by current events is that "the system" as we know it remains on the brink of structural failure as far as the eye can see. Despite the hope of monetary architects, beneficiaries, and proponents in ceaseless pursuit of ad-hoc legislative efforts to revive it, they may inevitably conclude that the system as a whole they are trying to save may simply not be worth saving at all. Be it by the blood of revolution or by the hand of sweeping radical change, evolution of a new sustainable paradigm is nearing critical mass.

What is the State of the American Union/Financial Sphere & Politics
In brief, F.U.B.A.R, which is a (military acronym) "F**ked Up Beyond All Recognition", "beyond all repair", or any number of similar constructions. The acronym originated in the United States armed forces, but its usage has spread to colloquial use.

In our view, F.U.B.A.R most succinctly describes the current state of the American Union for as far as the eye can see. Until true patriotic leaders of the highest integrity step out of their comfort zones, resist temptation, and impose sweeping radical changes toward breaking up the fascist and political duopolies inherent in the current (failed) "system as a whole", toxic conditions shall worsen exponentially.

Welcome to America, 2.0
To expand further, rather than seizing last fall's golden opportunity of imminent systemic failure to prudentially reground itself in principle, our Union has instead further mired itself in the false paradigms responsible for creating mass insolvencies and thereby cementing the states with an irreparably corrupt political structure, which overtly and covertly conspires with large elite corporate interests (Fascism). As if such a state were not bad enough, current leadership appears to be in process of adding a layer of Socialism on top of this utterly perverse Fascist structure of deceptive (perfect crime) Crony- Capitalism. If no one big and bad enough steps up to the plate to reinstate the will and discipline to redirect the nation toward prudence and sanity, the result and outcome of such folly is a "system as a whole" that either will implode on its own perverse malfeasance, or be overthrown by the majority of its victimized citizenry.

Voices of prudential reason
Relative to the rescue of our "system as a whole," there are few on the planet more fit in speaking truth to power than William Black, former bank regulator, and associate professor of Economics and Law at the University of Missouri. His arguments are concise, empirically validated, and downright impossible to refute. You will be shocked and duly impressed after viewing his one-on-one interview with Bill Moyers in the link below.

Also a Must-View: C-Span Hearing; October 28, 2009
Executive Pay and Tarp-Funded Companies - Nailing It Cold in Panel-II is William Black associate professor of Economics and Law at the University of Missouri, and Russell Roberts, professor of Economics at George Mason University. The testimony from both witnesses on the second panel are spot-on, compelling, and incontestable. Despite their collective lucidity, it is likely that mainstream media and the relevant legislative authorities will discard their straightforward, no-nonsense testimony as though it were coming from an enemy within. The integrity of testimony from both of these men gives us hope, and makes each of us whom concur, proud of being American.

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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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