9/7/11

It baffles me that people are discarding this count as a potential wave (ii) just because there's so much upward momentum.  In a wave 2, especially a sharp wave 2, there should be a lot of upward momentum!

Now, obviously I'm slightly miffed at both myself and the market because I am still long SDS from SPX 1158 (no, you did not misread that, and yes, I am bleeding badly), but:

1. There were a lot of gaps down to fill.  They fill at 1204.
2. Just because something "doesn't 'look' like a wave 3" doesn't mean it isn't a wave 3, especially if it's in a 2 of 1 of 3. There seems to be a perception, especially among perma-bulls, that it "can't" be P[3] because the market isn't down 5% every day.
3. The 78.6% correction is at 1211.
4. Does anyone really think Bernanke is going to talk about any upcoming QE3 with stocks at or near 1200?

It should also be pointed out that KRAP was up today by less than the market (1.93% vs. 2.too many% for the SPX).

My count still stands.