The market euphoria likely ends this week. [WMT]

Backlink.

Over the weekend I have looked at dozens of charts.  While I don't have time to comment on them all, let me tell you that I have never seen so many topping indicators: declining double tops after 5th wave completions, etc.  The markets have been going up, up, endlessly up.  Any short who has not been smart about using stops has gotten creamed and demoralized.  Hugh Hendry is making a complete fool of himself and so are other famous shorts.  They have given up because the fundamentals that they understand simply have been getting worse and worse and these guys now believe it is a permanent condition.  Roubini says we are due for a crash but the markets have another year of rally first.  He's saying it's OK to party until 2016.

Folks, I have lived as a trader through a good number of serious tops and bottoms and I'm here to tell you that it's always like this.  People build a "market religion", be it short or long based on what's winning at the time.  They get used to winning and lose sight of the cyclical nature of the beast.  Then when the turn comes they don't see it coming and they get creamed.

Again, right now the markets look like a streak eagle.  They are going straight up and seemingly without any resistance.  But the wave count in many majors is done and so I know the bull market is very nearly done.  I think it will be a very, very few days before some really big selling starts.  When the selling begins and picks up momentum it will be just as relentless on the down side as it has been on the upside.  Today people complain about the federal reserve manipulation of markets.  In not too much time, the evil shorts will be blamed even though the shorts have gotten literally destroyed and thrown out of the markets over the past 2-3 years.  Make no mistake, the coming sell off will not be due to shorts.  It will be to selling by leveraged longs who are getting margin calls.

One chart which cannot be ignored is WalMart.  After the 3rd wave peak shown we got the telltale 5 wave bump H.T. 4th with the throw under on the E wave and now 5 very clear waves to the 5th.  In that 5th wave, the 3rd of 3rd had a gap up, 1-3 is parallel to 2-4 and alternation exists.  It is totally classic EW in all ways.

If that is 5 waves up then what does that pull back look like?  Is it the pause that refreshes or the start of the bear?  To be honest, there is no confirmation on anything right now, but this looks motive so far, not corrective.  It could potentially fall back to the 50 fib and fill the gap down in the low 80s and then go for 3/5, 4/5 and 5/5.  In other words, the recent peak might just be 1 of 5. But this is a far, far distant alternative count for me.  The bear will be confirmed when the chart breaks back down into the channel through the top rail of the 4th wave H.T.