A-Waves

Sorry I haven't posted much this summer,
but as you can see...we've had time to wait out our right shoulder.

Let's look at the A-waves from both the 1929-1932 bear market
and our current 2007-?? bear.

Again, they match.

1929:



2007-2009:

Following the tops of Sept. '29 and Oct. '07,
both A-waves occur in 5 waves.

1:
The market sells off to support (see previous blog post).
The selling climaxes in a panic, either Bear Stearns in March '08,
or a similar incident but with the exchange firms in beginning Oct. '29.

2:
First attempts at intervention hold support.
The market rallies back to resistance,
and everyone believes "whew, we dodged a recession".

3:
The rally fails at resistance and selling returns with a vengeance.
The market first falls to support and breaks it.
This massive technical breakdown leads to major panic and then intervention.
(see Wall St. banker bailout of Oct. '29 and TARP bailout of Fall '08).
The market trades sideways around support,
but ultimately forced selling enters the equation and the powers that be
are unable to prevent a full scale crash.

4:
A dead-cat bounce follows.
Bargain shoppers buy up oversold stocks en masse.
The height of the dead cat bounce occurs near
what would eventually become the 38.2% fibonacci retrace.

5:
Intentional short-selling of the market.
First, profit taking enters the equation....
and the market falls back to its organic lows (230 and 8,000 respectively).
The government and the banks then drive the market up
to what would eventually become the 23.6% fibonacci retrace,
then they intentionally short the market to the bottom.

They do this in order force the public to sell its positions,
so the banks can buy up the cheap stocks and profit from the next rally.
The government and the banks work together to steal money from the public,
in order to recapitalize the ponzi banking system.

The proof can be seen by the bottom forming a head on and inverse H&S.
Negative distribution.

Next time I'll compare the corrective B waves of the two markets.
You should already see the first aborted h&s formations,
which followed the bottoms and had neckline at the 23.6% fib retrace.

But more on those next time.

For now, enjoy the rest of our right shoulder and
short-lived V-shaped recovery.

Also notice that I've updated the market forecast
at the bottom of the page.