This morning I read Elliott Wave International's Short-Term Update, published yesterday afternoon, and I thought I'd share a couple of charts of interest. (Note: I am respectful of the proprietary nature of this work, and I have permission from EWI to republish charts from time to time, but you'll need to click on the banner ad on the right column to check out all their wares.)

The first shows the perverse relationship sentiment has with stocks. In early March, when stocks were a ridiculous bargain and multi-thousand percentage gains were just waiting to be plucked, the sentiment reading was an unheard-of 2% bulls.

Now, however, with stocks at (in my opinion) insanely-overpriced levels, and with all those multi-thousand percent gains already part of financial history, people are ga-ga about stocks.

The other chart of interest to me was particularly poignant. Long-time readers may remember the nasty relationship I had with the spring of 2008. I've mentioned it as something I'd never want to repeat. Well, not only has it repeated itself, but it has done so in slow motion. As the chart below suggests, the fractal form of the move from the low of March to the present is virtually identical to the form of the move from spring of 2008. So it's the same kind of torture, but prolonged by about 300% in terms of time.

Word on the street is that Fujisan will be doing another post on Slope this weekend; let's keep our fingers crossed, because I know how much everyone loved her last contribution!

This is just for fun (well, it's kind of serious too, since I have a huge long position in TWM).

Below is the ultra-bear ETF on the Russell 2000, symbol TWM, flipped upside-down. I've taken a stab at labeling its explosive rise "higher" (that is, lower). Any opinions?

I regularly read a couple of EWI's publications – – Short Term Update and the Financial Forecast – – and I find them very helpful in my own trading. The one which Prechter writes on a monthly basis, the Theorist, is especially enjoyable.

EWI just wrote me to let me know they are giving away the latest Theorist, so I wanted you to know. It's a really good one, too, because Prechter (who, late in February, said it was time to cover shorts) has become bearish again. Here's the link to your free copy. Check it out, if you are at all interested.

I'm always on the lookout for novel ways of looking at and timing the market.

Late last year, the following chart was sent to me:

It was dated November 20, and it called for the NASDAQ's fall to end on that very day.

Well, I've got to say, I'm impressed. Strictly speaking, the NASDAQ made a nominal new low in March (and, were I watching this chart at the time, I would have dismissed it as having failed). But in a broad sense, buying up NASDAQ stocks in November would have worked out quite nicely so far. So, with the benefit of hindsight, I'm intrigued.

Apparently this is the product of something called the Heccis Cycle, and I've tried to buy the book to learn more (the, errr, order page doesn't seem to work as well as the cycle does………I can't for the life of me figure out how to actually buy the thing). I'd be interested in opinions as well as input on other cycle techniques that have worked out for Slopers.

The folks over at Elliott Wave International published a chart on their Friday update which I like quite a lot, shown below:

And this is where the real question for me is – – – will the market (a) not see the highs from June at all again this year, tumbling from these levels, as suggested in yesterday's post?; or (b) stabilize somewhat around 800 or so on the S&P, gain strength (for God Knows What Reasons) and finally push up to the ~1,000 level, and then really fall to pieces.

I really wish I knew, because when the S&P does get to around the ~800 level, nothing's going to matter more to one's trading success than picking the right train! If it's (a) and you choose (b), then you're going to miss out on the fall, and if it's (b) and you choose (a), you're going to get badly damaged, just like the March-June period from 2009 as well as 2008. Grumble.