Thursday, February 10, 2011

Approaching A Top

It appears that the long awaited for top is near at hand as a (likely) small degree 5th wave is in progress.  This should complete the rally from the July 1 low.  There have been quite a few close calls (apparent tops that weren't) along the way, but the current pattern has all of the characteristics of a final impulse to a top.  It looks like the SP500 will double its 2009 low before it rolls over.

In order to confirm a top, we will have see a break of the January 31 low coupled with a 5 wave decline.  Until then any top will just be a pullback in a still ongoing uptrend.  The level of complacency has reached such an extreme that it is hard to fathom how a correction would not occur soon.  However, this market has fooled just about everyone - even the bulls who have called for minor pullbacks - so who knows if the craziness will continue.

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