Technical Tipping Point Near at Hand

By: Joseph Russo | Tue, Oct 25, 2011
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Freedom versus Fascism

In September, following five months of impulsive decline from its May high, the Dow has reversed abruptly, rallying incessantly after a fleeting 20% roller coaster drop from its secondary QE-2 bailout crest. The Dow is currently on path toward violently reclaiming more than 60% of these recent losses within the extremely short span of 14-sessions.

The price action along with all of its key participants and influencers should be keenly aware that equity markets are nearing a potential tipping point similar to that following the like rally in 2008, which occurred just prior to the implosion and widespread recognition of outright systemic insolvency, which has yet to be resolved.

The Elliott wave rendition and implied bearish outcome below assumes that the recent history of 2008-2009 is drawing toward an imminent tipping point of repeating itself in the not too distant future. Do be advised that there are various alternate paths associated with the unwinding of longer-term bearish forecasts.

Elliott Wave Dow Count

At present there appears to be two realities from which the financial sphere struggles to define daily values. The status-quo rendition of imposed reality courtesy of the monopolistic interventions and kick-the-can short-term band-aid fixes for long-term problems vs. the underlying truths of various mathematical impossibilities caused by blatant fascist interference in markets and the monopolistic micromanagement thereof, which deceitfully aligns itself under the protective guise of free market capitalism.

The first rendition of reality is associated with so-called Cramer-laden fundamentals of company earnings, corporate balance sheets, etc. If you trust and believe the official numbers reported by statist sovereign governments and the bailout-modified accounting standards of various corporations, then trade that version of reality, which would be long-term bullish with a stop loss for good measure beneath the September lows.

The latter and intentionally suppressed rendition of reality is associated with massive unsustainable debts, deficits, and the flawed paradigm of global trade, which is based upon the artificial currency arbitrage of one nations skilled labor and make-believe money vs. another's. Such corrupt and imbalanced trade is by no means "free," and benefits only those relative few who are in a position to profit from global fiat currency arbitrage. As we draw closer and closer to the end of this corrupt charade of "supposedly free" global trade, we are suddenly beginning to see the outline of its endgame effects taking shape. In this latter version of reality, nothing is more revealing or uglier than the underlying truth.

If you embrace the latter, then short the indices with buy-stops to cover above the May highs.

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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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Source: The Contrarian Take http://blogs.forbes.com/michaelpollaro/
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