The Waves

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First off, the folks at Elliott Wave International wrote me today saying they are kicking off a 17-city How to Trade in a Fast-Moving Bear Market tour from September 4, 2009 to February 2, 2010. You might want to click on the link to see if they'll be anywhere near you, since I really like their work and – – assuming this danged bear market fires its engines up sometime again – – I have found Elliott Wave to be helpful as we stairstep our way down.

Second – speaking of the same folks – here is a graph from their Short Term Update tonight (they allow me to occasionally republish graphs from time to time here) which I like:


As usual, click on the graph to see a bigger version – but it does a nice job labeling the past year of market activity. The horizontal line marked as a .382 retracement is the crucial line in the sand. Either the countertrend rally has exhausted itself (which would agree with the "2" labeling), or what we experienced over nearly four months was simply the first phase of a more hefty push higher.

My money is at least oriented toward the notion of a meaningful "B" wave down, but not cracking March's lows yet. What would harm me the most – and this is why I'm relatively lightly positioned right now! – would be a swift rise above that line, prompted either by (1) end-of-quarter window dressing on June 30 or (2) a surprisingly bullish jobs report Thursday morning.

You know what three words are next………..we shall see!

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