Not A 3rd Wave

I may be proven wrong at the end of the day, but anyway you look at the intraday squiggles, they do not look like the 3rd wave of an impulse to me. I really only see too possibilities, one more bullish than the other. The first is that wave (b) topped yesterday and this is wave (c) of [ii], which should finish by midday, or this wave b of a flat in wave (b) and wave (b) is still in progress.

Either way, we should fill the 5/7 gap this morning and that may be a positive. The overall action suggests that wide swings will continue for some time, but I am not yet convinced that we have made a bearish turn yet. Or course, a break of the 5/6 lows will change that view.

Can the majority be right about a crash? If this is a crash in the making, it is the most telegraphed crash in the history of the market. The well known Richard Russell of Dow Theory fame is saying that if we break the 5/7 closing low, markets will crash.

The McClellan Oscillator is working on a higher lows pattern at a very deeply oversold level. If a series of higher lows does develop, it would be very bullish.

As bad as it is the Qs keep trading around the January highs, this is bullish - not bearish. Pre-market the Qs are at 46.43. The January high was 46.64. The 2/5 low was 42.12.

They are saying the ban on naked short selling in Germany is in response to a yet to be revealed bank problems, a la Lehman. Isn't naked short selling illegal anyway? I must admit I don't get this one. Anyway, don't be surprised if whatever it is is revealed over the weekend. If it is not as bad as is feared, markets will rocket higher.

Meredith Whitney is calling a top in banks. Can she be right twice in a big way? I pointed out in a previous post that both financials and housing stocks are tracing out a very clear double zigzag. There is almost no ambiguity. That means that at the least we will see a retest of the April highs in these sectors. Can the market crash without these two sectors?

Dennis Gartman is telling his clients to sell gold. The price is falling and the action confirms that the recent move in gold and silver was wave B of a flat correction. We will see a move below the 2/5 lows, but that should be a buying opportunity, not another signal to sell.

I discussed oil last night. We should be coming in on some sort of near term bottom. The following rally will tell the tale.

I must admit that the recent action makes me think I should be daytrading, but in a couple of weeks, I feel confident that I'll be glad I am not.