Cunning conundrum …

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http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p38955316076&a=266398464

Houston we have a conundrum.  But we may have a cunning way to deal with it.

The market has broken the Basing Point stops.  The mar09 tsrendline is broken.  The Dow Theory has produced a sell signal.  The talking heads and the permabears (polar bears?)  think it’s the beginning of a bear market.  What do we think?  We don’t think.  We analyze.  We view the entire formation, as here:

0908spx

http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=1&mn=0&dy=0&id=p80840456036

As in the first chart the zeta wave has powered over the trendline,  a clear and powerful buy signal.  We are looking at the formation as a massive congestion zone.  The confirmed break of the near low would change our mind, otherwise  we don’t consider that the long strong bull market is over.  This is a rather revolutionary and cunning solution to the conundrum for us.  Meaning we are where we are and we have to deal with it now.

AND expect absurd volatility and bungee marketes.  Contrarians rule and they (and the computers) will drive the market hundreds of points  a day for their amusement and profit.

Using the near low as a Basing Point we will begin to scale in new capital to the market.  Readers should be hyper aware of the cyclonic conditions.

 

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