Elliott Wave Analysis :: Robert Prechter

Thursday, June 28, 2012

"HIGH PROBABILITY OF NEXT WAVE BREAKDOWN" http://bit.ly/Mssxcs

Tuesday, June 19, 2012

06/17/12 BullBear Market Report: The Final Rally - BullBear Trading: Stock and Financial Market Technical Analysis http://www.thebullbear.com/group/bullbeartradingservice/forum/topics/06-17-12-bullbear-market-report-the-final-rally

Saturday, June 16, 2012

Value Line Geometic Index Predicts Major Stock Market Top

Here's the latest from Steven Vincent of TheBullBear.com:

Source link: http://www.thebullbear.com/profiles/blogs/value-line-geometic-index-predicts-major-stock-market-top

===================================

Value Line Geometic Index Predicts Major Stock Market Top

Last week I posted analysis showing that the monthly RSI divergence which formed at the 2011 and 2012 highs is a very reliable indicator of a stock market decline of almost 28% lasting 11 months. I continue to see many, many companion signals which confirm this.

The Value Line Geometric Index is showing a technical condition which has also been a strong indicator of major market tops.

The total number of companies in the Value Line Composite Index hovers near 1675, and is composed of the same companies as The Value Line Investment Survey®, excluding closed-end funds. The Value Line Composite Index has two forms, the Value Line Geometric Composite Index or the Value Line Arithmetic Composite Index...

Exchanges in The Value Line Composite Index are:

American Stock Exchange

NASDAQ

New York Stock Exchange

Toronto Stock Exchange

The Value Line Geometric Composite Index is the original index released, and launched on June 30, 1961. It is an equally weighted index using a geometric average.^[1] Because it is based on a geometric average the daily change is closest to the median stock price change.

The daily price change of the Value Line Geometric Composite Index is found by multiplying the ratio of each stock's closing price to its previous closing price, and raising that result to the reciprocal of the total number of stocks.

Value Line Composite Index

The Value Line Geometric registered a divergence from SPX and INDU at the 2011 and 2012 highs:

Also note the bear cross of the 50 EMA below the 200 EMA. We can also see a clear multi-year Head and Shoulders topping pattern which has also formed on NYSE and numerous other world stock, commodity and indicator charts:

Have there been other instances of this technical condition heralding a significant bear market?

In 2007, we saw a virtually identical setup:

Comparing the two charts you will find remarkable similarities. The moment of the bear EMA cross marks about the halfway point of the right shoulder and also marks a period of a small rally and some volatility.

In the period leading up to and involving the top in 2000, $XVG also diverged from SPX:

In this case, since the 200 top was the end to a multi-decade bull market, it took two years for the divergence to play out. There was something roughly akin to a Head and Shoulders formation involved as well.

In all three cases, major divergences and topping patterns formed over an extended period of time and clearly indicated a significant, underlying deterioration of market breadth leading to a major bear market. When taken in conjunction with the plethora of other similar data points that are present today, it would be wise for investors to consider the implications.

===============================

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Friday, June 15, 2012

"BREADTH DETERIORATING RAPIDLY AS MARKET RALLIES" http://bit.ly/MbwOh8

Wednesday, June 13, 2012

"MULTI LEVEL HEAD AND SHOULDERS FRACTAL PATTERN SETS UP BIG GLOBAL DECLINE" http://bit.ly/MAY5Z3

Tuesday, June 12, 2012

"NASDAQ 100 SETUP" I'll be watching this to determine wheteher I need to cover or hold my position for further gains. http://bit.ly/MAY5Z3

Saturday, June 9, 2012

Bearish Monthly RSI Divergence 100% Accuracy Rate; Occurred at 91.6% of Stock Market Tops

href="http://www.thebullbear.com/profiles/blogs/stock-financial-market-crash">style="font-weight: bold; text-decoration: underline;">Bearish
Monthly RSI Divergence 100% Accuracy Rate; Occurred at 91.6%
of Stock Market Tops

Source link: href="Source%20link:%20%20http://www.thebullbear.com/profiles/blogs/stock-financial-market-crash">http://www.thebullbear.com/profiles/blogs/stock-financial-market-crash

Relative Strength Index is one of the most widely recognized and
followed technical indicators. The most common use of RSI is the
identification of divergences:

Developed J. Welles Wilder, the Relative Strength Index (RSI)
is a momentum oscillator that measures the speed and change of
price movements...According to Wilder, divergences signal a
potential reversal point because directional momentum does not
confirm price. A bullish divergence occurs when the underlying
security makes a lower low and RSI forms a higher low. RSI does
not confirm the lower low and this shows strengthening momentum.
A bearish divergence forms when the security records a higher
high and RSI forms a lower high. RSI does not confirm the new
high and this shows weakening momentum. href="http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:relative_strength_index_rsi"
target="_blank">StockCharts.com

The monthly chart of Dow Jones Industrial Average has registered
a bearish divergence at the 2011 and 2012 highs:

href="http://api.ning.com/files/ZPds95lVd797JpxBt3jGIuHSTHAzTomXDVty9CNgoHC1sdzTD4TmqRkCFY1Qv-0dlyNGWcR7e7M4AO6UKyWLvAEKUoH*yWVW/djiamorisdiverg.png"
target="_self">src="http://api.ning.com/files/ZPds95lVd797JpxBt3jGIuHSTHAzTomXDVty9CNgoHC1sdzTD4TmqRkCFY1Qv-0dlyNGWcR7e7M4AO6UKyWLvAEKUoH*yWVW/djiamorisdiverg.png?width=500"
class="align-full" width="500">

I went through the monthly data on INDU going back to 1971. In
100% of occurrences of the signal an average decline of 27.9%
lasting an average period of 10.8 months resulted. Since 1971 in
all 11 occurances of a bearish monthly RSI divergence a
significant decline of at least 16% followed. There was only one
top of significance that did not register this signal and that
occured in 1973. That means that during a forty year period
starting in 1971, 91.6% of all significant tops recorded this
technical signal. That is a period that encompasses two bear
markets and a major bull market as well, which means there is a
firm record of this technical condition resulting in serious bear
markets under a wide range of well identified market conditions.

Here's a list of the tops regsitering a monthly RSI divergence
and the subsequent percentage decline. Click on the link to see a
chart of the occurrence:

YEAR, PERCENT DECLINE, DURATION OF DIVERGENCE, MONTHS OF
DECLINE

href="http://api.ning.com/files/LbUhA-ARJgq2iPTcBVGizkZVXRg*pje0WSA7d8Fl1eARhrmnj5bkcUAxnANpqfwPhUWcnRIZZcspnochV5XqdrFpLckNA0bG/rsimo76.png"
target="_blank">1976, -28%, 5, 19

href="http://api.ning.com/files/ZPds95lVd7-MbCPraJnj*Oo5y56W8LQRzVySC15DtHrR04P8UrOzd0461uyCQ27OVeZNA7kztm3i4I2iqIiage3pIWD6gLXQ/rsimo80.png"
target="_blank">1980, -21%, 5, 2

href="http://api.ning.com/files/4hLA7iif3QWat-IFTytanOjVW7hEmBrcQKGPazaLbq8gM1s16PLFMFesMfuel5IPpeNLRUaua3mwIheg4Jn7ZtbIgStq22oB/rsimo81.png"
target="_blank">1981, -25%, 4, 17

href="http://api.ning.com/files/NWk7EHK2Fi9PAdD7s7dOalahkn8PYs5uSGqj*FzZKKOmj5c3NH1POYsszbiTG4e*Q2y19q7XW7qLnIEo9iWHBmwUNTEashD-/rsimo83.png"
target="_blank">1983, -17%, 6, 8

href="http://api.ning.com/files/41jVQ8sp5GUdIAdtPJEOhNyqbKYJBzqxQK9jJBeFoUIwPAlJyupsljsgSquphJlw-y0RRMVuujPVbuioY0xYyEtwgOZFFLAL/rsimo87.png"
target="_blank">1987, -41%, 16, 3

href="http://api.ning.com/files/*-R64zREQ0GLfvYrMRrEKcHGyeyx6uwDpcl4ng5xdVZu79yBR4LVga9bdhcq3iQA4-J8olAKYjOQkkbf0vhWrGyeFCttQvPC/rsimo90.png"
target="_blank">1990, -22%, 10, 4

href="http://api.ning.com/files/FoxXlW52UKSDNyzTaHVdxnp3eAWTyjcgzJWiuBWzkskH*y9jctnWGwQ0ejAPWAuJ6ySYP3pWX0l9N4i7go1o8GCUs8fya5Pc/rsimo97.png"
target="_blank">1997, -16%, 7, 3

href="http://api.ning.com/files/iQK6dPDq0cdc9Nx5k6dKhEb4CDfi9jyJbF*1cv2gcgn9MlU8tG2eJnwDRSrNUFZbzoky*4O1-XrMiBem*ETiROTvlItg5kUS/rsimo98.png"
target="_blank">1998, -16%, 11, 3

href="http://api.ning.com/files/6nTOrGbaHGwV4P3JFP459ZHlzzvtYBeU7igNb7hhZFgE24byi5lrqCjWXQ6-W8P5rUxVJXw2PFRw-slA6Ais8tbWXOl59PXT/rsimo2000.png"
target="_blank">2000, -39%, 8, 34

href="http://api.ning.com/files/ZPds95lVd7-lgGij-oMJCXTc54jW*I7BnqHISW6YdnGBc2bYZRRw355umQqBf0ZLMHVuuLQj85cqt4Ob0xDNv7blaethkMfI/rsimo2007.png"
target="_blank">2007, -54%, 4, 18

href="http://api.ning.com/files/*K5qtoHSaaGR6LDqK2wN-CWZ0X2VRkTDUG0aPJuanQQdGWPALBb2vZzAbRoiyLyHc4uC8Vzhhf54rBiamPuEFD9WJVrnKP6E/rsimo2012.png"
target="_blank">2012, -??%, 11, ??

The average percentage decline is 27.9%

The average duration of the bearish divergence (difference in
the number of months between each price top) is 7.91 months.

The average numbers of months of the decline is 10.8

The average monthly decline is 3.58%.

Removing the outliers of 54% and 16% the average percent
decline is 26.13%

Removing the outliers of a 16 month divergence in 1987 and a 4
month in 1981, the average duration of divergence is 7.4 months.

Removing the outliers of 34 months and 2 months, the average
length of decline is 7.5 months.

The current bearish monthly divergence took 11 months to develop,
about 3.5 months longer than average. This is the second longest
build to a bearish monthly RSI divergence, the first being the 16
month period leading up to the 1987 top and decline of 41%. The
current market is only 5 weeks off the divergent price top or 38
weeks short of the average and the maxium decline to date is about
9.8% or 18.1% less than the average drop. Altogether this suggests
the probability of considerable more downside in terms of time and
price yet to come in this bear market.

The average percentage retracement following a monthly RSI
divergence is 57.6%.

The nearest Fibonacci retracement percentage level of the prior
wave which it corrected for each signal is shown:

1976-1978
61.8%

href="http://api.ning.com:80/files/WaHBOOEbtoyhsVbXNfrsJjCYoG*ji2Mk-kYmOMVDSLmp3UtfnU7iQpfxEkSNGICwtxT6eYYH7TdZxItI24DcOhgQB4mH6Atw/Fib1976.png"
target="_self">src="http://api.ning.com:80/files/WaHBOOEbtoyhsVbXNfrsJjCYoG*ji2Mk-kYmOMVDSLmp3UtfnU7iQpfxEkSNGICwtxT6eYYH7TdZxItI24DcOhgQB4mH6Atw/Fib1976.png?width=500"
style="padding: 10px;" class="align-full" width="500">

1980 100%

href="http://api.ning.com:80/files/Rc829tkddiSbYMGmjNajlWUKJTR9KAHOLoygUrrzIKMiha0LQgWprod55pXaQkmfrGwsIsrzEpHlQ2ifniSqgk9V4yGPshNj/Fib1980.png"
target="_self">src="http://api.ning.com:80/files/Rc829tkddiSbYMGmjNajlWUKJTR9KAHOLoygUrrzIKMiha0LQgWprod55pXaQkmfrGwsIsrzEpHlQ2ifniSqgk9V4yGPshNj/Fib1980.png?width=500"
style="padding: 10px;" class="align-full" width="500">

1981-1982
78.6%

href="http://api.ning.com:80/files/8zWzi3z-1o9egsp8wH0EeldiErbAUDuJ5OU1DabTV4uPBqGoU3QejQ-METbvLR8zzLAs6x5ss*JQjcCMYAelJdIPTN23MKy-/Fib19811982.png"
target="_self">src="http://api.ning.com:80/files/8zWzi3z-1o9egsp8wH0EeldiErbAUDuJ5OU1DabTV4uPBqGoU3QejQ-METbvLR8zzLAs6x5ss*JQjcCMYAelJdIPTN23MKy-/Fib19811982.png?width=500"
style="padding: 10px;" class="align-full" width="500">

1983-1984
38.2%

href="http://api.ning.com:80/files/DynfYLhfgIx*IApU7AOzitcxklrgmcIuoTsPX8Npko43q09oloT4NxeB9Zk6mfzlK8g9ARPZCYo8SC10HwkwFYjRYwyVhdhU/Fib19831984.png"
target="_self">src="http://api.ning.com:80/files/DynfYLhfgIx*IApU7AOzitcxklrgmcIuoTsPX8Npko43q09oloT4NxeB9Zk6mfzlK8g9ARPZCYo8SC10HwkwFYjRYwyVhdhU/Fib19831984.png?width=500"
style="padding: 10px;" class="align-full" width="500">

1987 61.8%

href="http://api.ning.com:80/files/Y7NQOFl2UN80NLHUsDGloHNlbPtk88vxuKLi6yhoHDKMUEEmfjAcNcLE-eO7YaP76ox6d-8*bp2XiAEwHK1hfYY1N8QysJ*o/Fib1987.png"
target="_self">src="http://api.ning.com:80/files/Y7NQOFl2UN80NLHUsDGloHNlbPtk88vxuKLi6yhoHDKMUEEmfjAcNcLE-eO7YaP76ox6d-8*bp2XiAEwHK1hfYY1N8QysJ*o/Fib1987.png?width=500"
style="padding: 10px;" class="align-full" width="500">

1990 50.0%

href="http://api.ning.com:80/files/o0r1xd3GG*ny8Qil1ROA2rn1D2lB1MzM2U0Dz1TKT1X9*n*PS0ABSHjzLfzIEARrH-ZulEyRpd0wuobfl4kQdND9EaesG1Vh/Fib1990.png"
target="_self">src="http://api.ning.com:80/files/o0r1xd3GG*ny8Qil1ROA2rn1D2lB1MzM2U0Dz1TKT1X9*n*PS0ABSHjzLfzIEARrH-ZulEyRpd0wuobfl4kQdND9EaesG1Vh/Fib1990.png?width=500"
style="padding: 10px;" class="align-full" width="500">

1997 23.6%

href="http://api.ning.com:80/files/WaHBOOEbtoxLmcNubSzaolTFY21uAah*9mXuZ2wOmCq3IQ9Ie4ExiMHEDFEgJ2rSXgI2kb*26xKEX4Knl-Ne4Y8FCG-FrMVI/Fib1997.png"
target="_self">src="http://api.ning.com:80/files/WaHBOOEbtoxLmcNubSzaolTFY21uAah*9mXuZ2wOmCq3IQ9Ie4ExiMHEDFEgJ2rSXgI2kb*26xKEX4Knl-Ne4Y8FCG-FrMVI/Fib1997.png?width=500"
style="padding: 10px;" class="align-full" width="500">

1998 23.6%

href="http://api.ning.com:80/files/uDwW2UwPpmdm76Xcx8y35t79B6uz1G45jXCP*d8EaOPnMUZTonMMCMy*uKiRP-rKPoGwj*uQtUdyJ2WTRhzI6UHSH3iF-SL0/Fib1998.png"
target="_self">src="http://api.ning.com:80/files/uDwW2UwPpmdm76Xcx8y35t79B6uz1G45jXCP*d8EaOPnMUZTonMMCMy*uKiRP-rKPoGwj*uQtUdyJ2WTRhzI6UHSH3iF-SL0/Fib1998.png?width=500"
style="padding: 10px;" class="align-full" width="500">

2000-2003
38.2%

href="http://api.ning.com:80/files/5bE0uCUHNzvpZnyBtuakh*1Q-nxaexie2SyAhIw6WXUffEa5qFsU8MFxgwkOVYaJeNmUP66S7KH7Nzyw23152l8jt2KiTm*1/Fib20002003.png"
target="_self">src="http://api.ning.com:80/files/5bE0uCUHNzvpZnyBtuakh*1Q-nxaexie2SyAhIw6WXUffEa5qFsU8MFxgwkOVYaJeNmUP66S7KH7Nzyw23152l8jt2KiTm*1/Fib20002003.png?width=500"
style="padding: 10px;" class="align-full" width="500">

2007-2009
100%

href="http://api.ning.com:80/files/5bE0uCUHNztdqAQXXuHFPdj7A5sp5Z-36X*kY9FK01xPutTyRbdelBOtPYk*NWynmdN847thTQe5vttFt6xsoHklnV0wHzq7/Fib20072009100.png"
target="_self">src="http://api.ning.com:80/files/5bE0uCUHNztdqAQXXuHFPdj7A5sp5Z-36X*kY9FK01xPutTyRbdelBOtPYk*NWynmdN847thTQe5vttFt6xsoHklnV0wHzq7/Fib20072009100.png?width=500"
style="padding: 10px;" class="align-full" width="500">

If this occurance of the Monthly RSI Divergence results in an
average retracement it would entail a decline to Dow 9380 or a
drop of 26% from current levels and it would bottom in December of
2012 at about 9290.

href="http://api.ning.com:80/files/KetAQX8OVKbx9dj5GHbJmBqI*qGziIMEeTNkm3FLrDcjppNs7uZ75uxZq6AHHdvwWoVhmNNtgOArEcUxVe1X95raLGxDeodA/Fib2012.png"
target="_self">src="http://api.ning.com:80/files/KetAQX8OVKbx9dj5GHbJmBqI*qGziIMEeTNkm3FLrDcjppNs7uZ75uxZq6AHHdvwWoVhmNNtgOArEcUxVe1X95raLGxDeodA/Fib2012.png?width=500"
style="padding: 10px;" class="align-full" width="500">

The usefulness of this signal for identifying major tops which
result in an average bear markets of 27% is evident. On its own it
would be a powerful cause for investors to evaluate their market
position. Since it is accompanied by an extensive raft of other
strongly bearish technical indications, it should be taken as an
actionable signal.

While a short term, news driven bounce is likely, it should be
regarded as the last, best chance for investors to exit the market
before a major decline ensues. Front running the announcement of
"easing" by global monetary authorities may work for a period
ranging from a few days to a month or so but it is likely to be
punished severely in the end.

===============================

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Keeping You on the Right Side of the
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"Bearish Monthly RSI Divergence 100% Accuracy Rate; Occurred at 91.6% of Stock Market Tops" http://bit.ly/KWGAG1

Friday, June 8, 2012

"Murky, Herky, Jerky" http://bit.ly/NXlqGY

Wednesday, June 6, 2012

"IMPORTANT UPDATE: Countertrend Rally Possible Now" http://bit.ly/Kgbc0i

Tuesday, June 5, 2012

"HOLDING SHORT" http://bit.ly/K6Ko4w

Monday, June 4, 2012

"THE BAILOUT ZONE" http://bit.ly/K6Ko4w

Sunday, June 3, 2012

Global Financial Market Panic in Progress

Here's the latest from Steven Vincent of TheBullBear.com:

Source link: http://www.thebullbear.com/profiles/blogs/stock-financial-market-crash

Steven Vincent
BullBear Trading
http://www.TheBullBear.com

================================================

Global Financial Market Panic in Progress

"There is only one side to the stock market; not the bull side or the bear side, but the right side" --Jesse Livermore, Reminiscences of a Stock Operator

One year ago today I detailed to BullBear Traders members my reasons for turning long term bearish on global financial markets.

When I turned bullish in March of 2009 and again in September 2010, I put forward a set of criteria that could both explain the apparent bull market and potentially underly its perpetuation. Evaluating these criteria now I find that they are, at this time, unverified by market action. This, together with the technical action of the markets at their current state of development, forces a reevaluation of my market position.

My set of criteria for a continued bull market at this stage of the game:

Emergence of a leading economic growth sector, most likely Green/Clean Technology and other Tech

Leadership from BRIC and Emerging Market sectors

Re-initiation of currency carry trades, most likely Yen carry trade

Flight of capital from low yielding bonds to risk assets

Eventual, gradual broadening of participation in the bull market from professionals and institutions to the general investor population and eventually the general public.

Technical condition of the market remains healthy

At this time I am not seeing any of these criteria being met. Recently, most of the above were approaching or exceeding levels in keeping with a bullish view or were at least showing signs of moving in a bullish direction. But all have effectively reversed or aborted at this point. June 2011: Recognizing the Start of a Long Term Bear Market

I turned bullish for a countertrend rally at the bottom in October 2011. The following were posted as updates to 09/19/11 BullBear Market Report:

Reply by Steven Vincent on October 4, 2011 at 12:30pm

My current take is that the B of major B is over and we are starting C of B up:

From here we would get a five wave C wave to complete the major B wave pattern. Then the major C crash would begin.

===================

Reply by Steven Vincent on October 4, 2011 at 2:14pm

If my analysis is correct and the major B is NOT complete yet and there will be a rally to complete it, then it should retrace between 50% and 78.6% of the major A wave. Believe it or not, it could even go on to make a higher high! I don't think that it will, but its within the technical bounds of the setup. The fact that the first two legs of this B wave took so long and were so volatile tends to suggest the C of B could go higher than most think possible.

=============================

Reply by Steven Vincent on October 5, 2011 at 2:30pm

I would classify the C of B rally as an intermediate term rally, not short term. Like I said last week, it will probably go "higher than you think". It will have to convince many market participants that the decline is over and it will squeeze almost all the shorts out. And it will reset long term technical indicators to at least a neutral position.

This is exactly what happened. Some markets did rally to a higher high while most did not, convincing market participants that a new bull market was in progress. I waited for the long term technicals to reset from overextended bearish conditions and when I recognized that conditions had turned, I became bearish and started to short. Updates posted to 02/27/11 BullBear Market Report:

Reply by Steven Vincent on March 29, 2012 at 11:57am

WORLD FINANCIAL MARKETS HAVE TOPPED

DAX is showing a lower high and lower low after tapping its broken trendline from below:

The downtrend from the 2011 highs and the upper rail of the purple wedge were also tested at the high. A test of the 200 EMA on this A wave decline looks very likely.

EuroStoxx 50 has broken support and is below all its EMAs, which have started to roll over and turn down together:

I reviewed all world markets and I could post chart after chart after chart which shows similar bearish technical setups. While US markets may possibly rally back for one final minor B wave high before the main body of the C wave decline begins, essentially the B wave rally off the 2011 lows is very likely OVER.

================================

Reply by Steven Vincent on April 4, 2012 at 12:45pm

SIGNIFICANT DECLINE HAS BEGUN

There is now little doubt that a major decline has begun in world risk asset prices. An overall review of global markets including equities, commodities and bonds tends to support the thesis that a MAJOR C WAVEdecline has just begun. Whether the decline will take the shape of A-B-C (1-2-3-4-5) or C (1-2-3-4-5) is not yet clear. in either case yesterday was an ideal entry point for a short position. Rallies are selling opportunities from here forward.

I'm not sure I've ever seen such a glaringly obvious technical setup for a major reversal go so totally unrecognized by virtually the entire market. The one-sided psychology prevalent at this top virtually assures that it will be a swift and dramatic fall. While one could possibly construe some bullish notions if one were to restrict analysis to a box bounded by the charts of SPX, NDX, INDU and APPL, if you look at the rest of the world, commodities and the technical indicators it is virtually impossible to stay bullish on global asset prices. In fact one must conclude that yet another massive deflationary bust is right around the corner.

================================

Since then I have been pounding the table and expounding the evidence supporting a near term major market top and crash to little avail. My efforts have largely been greeted with silence and even scorn. I've taken this reaction as a kind of contrarian confirmation that I'm on the right track. It's important for new readers to know that I am not a permabear. While I turned appropriately bearish in April 2010 and May 2011, I had been bullish since February 2009. As of this writing my analysis is that the currently unfolding crash will end the bear market that started in 2000 (though I reserve the right to revise that as the markets develop) and that at that time a major long term buying opportunity may present itself.

I'm a BullBear. I maintain an awareness of both sides of the market at all times. If I could find any evidence that supports a bullish market positon on any time frame in any risk asset market, I would present it to you. Well, I have looked and I continue to look and my finding is the following: there isn't any.

First let me address the general psychology and methodology embedded in the current bull argument. A great many of the bull proponents were former bears who have been turned over the course of the rally from the October 2011 lows. Once having been turned they are finding it very difficult to entertain any bearish evidence and are instead actively cherry picking data points that support their view. There is a total loss of objectivity and a mental clinging to erroneous views that are proven erroneous every day by market price action. Bulls, many of whom once claimed to know better than to trust this corrupted market, have been suckered and they can't bring themselves to admit it. This is of course the function and purpose of the B wave rally and it has accomplished its ends admirably.

The bear case, which will be exhaustively detailed in this report, has the support of factual, extensive, clear and overwhelming technical, sentiment, psychological and--now increasingly--fundamental evidence. The bull case relies upon the following:

Market is in an uptrend

Stocks are cheap

Bond investors are stupid

There's too much bearishness

Market is oversold

The Fed will bail us out

I'll start this report by conclusively refuting each of these points:

There are no uptrends of any kind on any time frame; global risk asset markets topped in early 2011 and have been in a bear market since then

Readily available data shows stocks are at best only relatively cheap and the 1966-1982 bear market shows they can get even cheaper

Bond market is not an effective sentiment/psychology indicator and the "dumb money" paradigm does not work

There's very little actual bearishness in the current market

The market is UNDERSOLD

The Fed's last efforts failed miserably, it's next effort won't work at all and it's not in a position to even try at this time

CONTINUE READING THE FULL REPORT:

http://www.thebullbear.com/group/bullbeartradingservice/forum/topics/financialmarketpanic

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