[DJIA] update

I think we are about to get some fireworks over the next couple weeks in the markets, especially now that a board member of the fed has come forward on public TV and explained that the stock market is nothing but a puffed up vapor, engineered by the fed which is now out of ammo.  Don't be surprised if Fisher ends up with an engineered heart attack very soon.  I'm still in utter disbelief that this moron would come forward like that and admit that the conspiracy theorists were all correct.  Worse yet, millions of foolish liberals just got a huge wake up call.  They had entrusted their thinking to these con men and now everyone knows it was a pump and dump scam.  Dumb ass Fisher thinks that the markets will possibly go sideways to digest this information? What an IDIOT!!  There are too many retiring boomers in these markets to want to sit there and put up with sideways action where you get no gain but take a new risk of collapse each day.  Fisher is out of touch with investors or he would have just slunk quietly away.

In any case, the charts did see this coming.  Check out this post from Jan 1st of the new year in which I wrote, "I am switching over to the unusual idea that this thing is done with the upside of the 5th wave without reaching a new high.  This is not a violation of EW rules but it is a special case.  EWI and Avi have both been looking for a higher high but I have not been very convinced.  Friday's trade could turn out to be brutal the the count below is correct.  It essentially says that we are now moving into the teeth of a 3rd wave down and it is the job of 3rd waves to make everyone realize that something has changed; something is wrong (or unexpectedly right in the case of a new bull market.

If I'm right about this count, UVXY will be over $100 in less than 2 weeks."

The DJIA was 17422 at that time:



Today's snapshot looks like I got this as close to right as you can get without a crystal ball. 

So here we learn another lesson about Elliott waves: a lot of the success or lack thereof has less to do with the system than with the practitioner.  Both Avi and EWI were both adamant about needing one more wave up.  Check out this post where I accused EWI of flipping to a short term bullish view right at the top.  Most other EWIers like Caldero and many others were in the same boat.  All of these guys know the EWI rules.  So how can we possibly get two completely different reads?

The answer is not difficult to understand.  In short it could have gone either way.  I happened to look at the issue using the UVXY chart as guidance and it helped me this time.  I was somehow in tune with the herd in a subconscious way when considering the data.  As I have mentioned before I have noticed that wave counters phase in and out of synch with the actual moves of the herd.  If one is too arrogant, their time in the sun for a given cycle is likely to be shorter than if one acknowledges the luck aspect of this game which certainly exists.  Of course, that's why I always tell people to use stops.  If the count is correct they won't get taken out.  If the counter zigged when the herd zagged then the gambler will be glad his stops got taken out.

I suspect we are in for a wild ride folks.  If you are short the markets and begin to feel excited about winning, check yourself.  Volatility is to be expected for sure.  The general form of the reversal could easily turn out to be something akin to that shown below: 



The chart below is an example of what we should expect.  It was part of this post.  Does it look similar to the one above?  Click the link one line up to find out how the chart below is related to the one above.  If you have an inquiring mind but have not read that post before it should make you wonder.