The market is attempting a zeta wave here, but we don’t believe it. We don’t think the gamma (C) wave achieved its objective. The reason for this is simple: Barron’s: 16 STOCKS THAT LOOK GOOD AFTER SELLOFF. Barron’s: BET ON THE BULL! We’re betting that you could get your fingers cut up by trying to catch the falling knife here. This putative zeta wave is fueled by just such punditry and hunger to get — ta da–the best prices for future bragging. We prefer to jeer from the sidelines.
And sometimes we get left at the post. But perhaps someone could tell us what is different today from 4 days ago. The economy is still moribund. As are the unemployed. Italy is still suffering a monster hangover from Silvio’s parties with nymphets. France is in a funk because it has to take back DSK. Germany is in a snit because it wasn’t invited to Silvio’s, but has to pay for the party anyway. They should have had a tea party instead. Maybe not. Abstinence policies based on too much tea drinking –as Paul Krugman has pointed out –promise to land us in a revived –bigger, better, more painful!!! — recession.
But…. we digress. On the way to the egress. (P.T. Barnum moved crowds through the circus exhibits by posting big signs which said “This way to the egress!” Eager to see the female egret the crowds surged out the egress.)
Well, we’re not biting on no egresses. As can be seen here the tight downtrend line is being pierced by the ersatz zeta wave. Adventuresome traders might buy the indices here. Less adventuresome might wait till there is a new high above 1208. We will be with them. We think it is entirely possible that a new cataleptic downwave could be in the offing, but only pundits with better crystal balls (or brass) than ours can tell for sure.
We are getting enough adventuresomeness from our gold trade. 58 seconds (New York minute) ticked off and we pitched our metals longs and went short (futures. Don’t try this at home unless you have a parachute on your bungee cord.)
Readers who broke our rule about stops may be looking for what’s left of their heads. Because the metals took up where the indices left off in a catastrophic downwave.
More to come? Analyst’s nostrum: Trend tends to continue.
If you are watching from the sidelines, hedged or out, you are our kind of reader. The only alternative is to ride — and trade –these gnarly waves. (some of which are 1 day long). Get your board. The lemmings are having a picnic at the beach.