S+P 500, strike 2

Despite the extended 5th wave which is a throwover of an ending diagonal, my "topping watch" for the S+P 500 is still on.  There are still other model possibilities for how the S+P is going to turn down but the recent extension after extension has used up a lot of energy.  I think the herd is looking for a reason to turn south now.  The recent break down of November support is strike 2 IMO.  Strike 3 will be the breakdown back into the channel somewhere in the area of the red oblong.  Once that happens we should see increasing panic.

As expected, the VXX is swinging up coincident with the southward tilt of the S+P.  It recently suffered a final throw under and has since put on the buy signal by breaking back up above the trend line "with gaps and gusto".  Traders will make fat percentage gains off of this over the next month IMO.

The chart for metals and the VIX have looked similar: both down while the S+P continued to ramp up.  I suspect that yesterday's metals raid was a capitulation bottom but that has not been verified yet.  I will say this though: usually these raids/smackdowns result in a market which is in shock and awe and fear.  I do NOT see that happening for metals right now.  Go look at the ebay price of a bullion silver coin.  Look at successful complete listings only such as the one below.  Silver 1oz phils are still going for $24!  The smackdown in paper silver prices seems to be getting ignored by ebay sellers.  They are not lowering their prices and buyers are not demanding lower prices.  These are signs that the metals manipulators are losing control over their game. 












The silver chart could support one more small smack down before being called the final 5th or it could have already bottomed.  These final stages of the 5th wave are always tricky, by design.  But the key here is that lower prices are only increasing interest in the metals, not instilling fear in the herd about them.  When the lions can no longer growl and have the water buffalo scatter in chaos, the lions (who by the way like to refer to themselves as "dragons" these days) are in big trouble.  At the end of the day, the herd is always stronger and once the herd has had enough the dragons find out the hard way.  I hope for lower silver prices from here.  If it happens it would be good fortune as I would be able to load up at lower prices.  Some day in the next few years people will look at $20 silver and wonder why they put money in a 401k instead of buying physical metals.