Oh my... !

The decline from July 07 top concluded as 3 waves. The next upleg from Aug 07 to Oct 07 was another 3 wave structure. The subsequent decline from Oct 07 is also a 3 wave structure so far. So no impusive action so far from July 07, from either a bullish or bearish perspective. That's why i give the benefit of doubt to a high level consolidation here.

The most striking feature is the irregular top on Oct 11. Irregular tops are bullish e-wave structures and they resolve upwards after the correction is over. The only way a 3-legged wave can be called the ultimate bull market top is if one subscribes to the truncation theory. If one theorizes that Oct 11 ended in a failure, then we could say that it was a major bull market top. But the truncation theory ends up wrong more than 9 out of 10 times. So it's hard to go with the truncation theory. A failure or truncation means the bearish forces were so overwhelming that the market could not reach it's logical conclusion i.e could not complete it's wave pattern. Now if it were true, then the subsequent decline from Oct 07 top should have been more violent than the rally from Aug 07 bottom. This is not the case as seen from the angle of decline or the time taken to retrace the the rally from Aug bottom. So the truncation theory is pretty hollow!

Now here's the "Oh my...." part.




My momentum indicator which demarcates the bull-bear market stopped right near the zero line as of this week's close. Oh my...

That also coincided with a climactic reversal in the form of penentration of the weekly bollinger bands and a reversal out of it. The BB penetration and reversal have market all the IT bottoms since the bull market begun in 2003. Oh my...

The decline from July 07 top to Aug 07 bottom took 5 weeks. The rally from Aug 07 bottom to Oct 07 top took 9 weeks. That's a total of 14 weeks for A+B. The decline from Oct 07 to date has taken 14 weeks. A+B = C. Oh my....

Can you call the bull dead ? You be the judge ! I am just presenting the TA case for a incomplete bull market.

My ST to IT indicators remain on a sell signal. If we get a strong rally accompanied with strong volume and breadth, then we could generate an IT buy signal next week. If we crap out here yet again, then the bear market case will start strengthening again. The market is currently wearing out both the bulls and bears. The violent snapbacks have killed the stubborn bears. The spectacular rally failures have killed the stubborn bulls. If one thing everyone is sure of in this environment is failures - both rallies and declines. Strong trending moves come out of this kind of environment. Be prepared !