Technical Tipping Point Near at Hand

. In September, following five months of impulsive decline from its May high, the Dow has reversed abruptly, rallying incessantly after a fleeting 20% roller coaster drop from its secondary QE-2 bailout crest. The Dow is currently on path toward violently reclaiming more than 60% of these recent losses within the extremely short span of 14-sessions. The price action along with all of its key participants and influencers should be keenly aware that equity markets are nearing a potential tipping point similar to that following the like rally in 2008, which occurred just prior to the implosion and widespread recognition of outright systemic insolvency, which has yet to be resolved. The Elliott wave rendition and implied bearish outcome below assumes that the recent history of 2008-2009 is drawing toward an imminent tipping point of repeating itself in the not too distant future. Do be advised that there are various alternate paths associated with the unwinding of longer-term bearish forecasts. At present there appears to be two realities from which the financial sphere struggles to define daily values. The status-quo rendition of imposed reality courtesy of the monopolistic interventions and kick-the-can short-term band-aid fixes for long-term problems vs. the underlying truths of various mathematical impossibilities caused by blatant fascist interference in markets and the monopolistic micromanagement thereof, which deceitfully aligns itself under the protective guise of free market capitalism. The first rendition of reality is associated with so-called Cramer-laden fundamentals of company earnings, corporate balance sheets, etc. If you trust and believe the official numbers reported by statist sovereign governments and the bailout-modified accounting standards of various corporations, then trade that version of reality, which would be long-term bullish with a stop loss for good measure beneath the September lows. The latter and intentionally suppressed rendition of reality is associated with massive unsustainable debts, deficits, and the flawed paradigm of global trade, which is based upon the artificial currency arbitrage of one nations skilled labor and make-believe money vs. another' s. Such corrupt and imbalanced trade is by no means free, and benefits only those relative few who are in a position to profit from global fiat currency arbitrage. As we draw closer and closer to the end of this corrupt charade of supposedly free global trade, we are suddenly beginning to see the outline of its endgame effects taking shape. In this latter version of reality, nothing is more revealing or uglier than the underlying truth. If you embrace the latter, then short the indices with buy-stops to cover above the May highs. . Trade Better/Invest Smarter Joe Russo Publisher and Chief Market Strategist Elliott Wave Technology . Elliott Wave Technology provides a suite of Winning Solutions designed to assist those who wish to trade better and invest smarter based upon the practice and deployment of proven trading strategies in concert with expert and unbiased chart analysis.

Read More ->>

WHIPSAW: The Song Remains the Same

What Does Whipsaw Mean?  Simply stated, a whipsaw market condition is present when a security's price heads in one direction then reverses sharply and abruptly in the opposite direction. Derived from the push and pull action used by lumberjacks to cut wood with a type of saw with the same name, the term has become synonymous with large fast-moving head-fake-type swings in the financial markets. Whipsaw is an ever-present challenge in the trading and investment arena. According to one of Jack Schwagers original Market Wizards Ed Seykota, the only way to avoid whipsaw losses is stop trading and investing. Disengagement may work for a time however; I do not believe that Seykota intended for people to interpret his quote as a serious solution. Seykota, best known for his extremely successful trend-based strategies, concedes that each is subject to whipsaw drawdowns and losses. In addition to being one of the best-in-class trading systems developers, Seykota has musical talents and a rather keen sense of humor as well. The video below is of Ed Seykota and his blue grass band performing The Whip-Saw Song. Embedded within the artistic levity are numerous pearls of wisdom. Do enjoy. If you want to get insight and exposure to successful trend trading strategies like those used by Ed Seykota, subscribe to the PILOT today.

RELATED NEWS
2008 Financial Crisis Causes and Consequences

John Allison, Retired Chairman and CEO, BB&T Corporation recently spoke to the Harvard Law School Tea Party about the causes and consequences of the 2008 financial crisis.

The hour and a half C-Span coverage of the event is well worth the time. Allison' s talk clarifies succinctly all that is going on in the global financial sphere and its impact on regional economies around the world.

\

Apart from the bounty of illuminating financial and political aspects of Allison' s talk, the one thing that also struck a chord were his thoughts and philosophy regarding individuals sense of purpose and self-esteem relative to their chosen career paths.

Deriving passion from ones chosen field of expertise aligned with a mission to assist others and make the world a better place is the underlying theme of Allison s philosophy.

After soaking in all of the shared wisdom, I asked myself three things:

1. Am I passionate about my work?
2. Am I assisting others?
3. Am I attempting to make the world a better place?

Though there is always room for improvement on every front, to my delight, I was able to answer yes to each of these three essential questions.

Nothing Risked-Nothing Gained

There is no way to avoid regular bouts of occasional and sometimes extended periods of whipsaw.

In a choppy market riddled with whipsaw, the only strategy that may deliver alpha is a successful counter-trend strategy however; they too are subject to their own brand of whipsaw.

.

Trade Better/Invest Smarter
Joe Russo aka ~ the PILOT
Publisher and Chief Tactical Strategist
Elliott Wave Technology

---

Elliott Wave Technology provides a suite of Winning Solutions designed to assist those who wish to trade better and invest smarter based upon the practice and deployment of proven trading strategies in concert with expert and unbiased chart analysis.

---

Read More ->>