Monday Pre Open (Sunday Eve.)

There are few new words that can be applied to the current stock market's historically overbought, risk-complacent, and over-leveraged condition that I have not already linked, so I thought I'd let someone else say it in a slightly different way, with the same forecasted outcome.  Check out John Hussman's wording and interesting charts in this article.

Notice the lower highs in the M.O.'s, which just turned back down and are headed lower.

TWTR's balloon may have burst Friday, as it fell 15% in one day, after a possible 5th wave up completed from the IPO day, not too long ago.  If so, 50 is the target, with the lower 40's possible.

Gold and silver likely ended their small 4th wave  bounces, and can now fall in small 5th's to complete their entire declines from their '11 peaks.  THAT will be the buying opportunities of this coming year, if not much longer, as potential is high for a very big rally from near current levels.  1100 +/-75 remains the zone of highest confidence and support.

Crude has wiggles higher for several weeks, but this 101 level has been the target since the DSE's buy signal near 91, and that oversold condition has become overbought.  Longs should exit here, and shorts be considered.

Tbonds are about to bottom with the metals, but don't look for a fundamental justification for why they should nearly simultaneously.  It's better to view them as independent trades, and let the DSE signal their in's and out's without explanation.  Remember, 125 +/-1 has been the DSE's target since June '12, when prices were above 151.  Now, only a few points from bullseye, the short trade needs relief, and a bounce toward the upper 130's is the next big trade.  We'll be buying, per our ladder.

Last week and this week are seasonally positive, meaning little chance of meaningful declines beginning.  However, the next Bradley Turn date is January 1st +/- a few days, and there is little room for anything but perfection.  We can't tell what the spark is about to be, but are sure that it's nearby, and that the ramifications are going to be epic.

Investment advisers are now at their most bullish plurality since 1987, as the public is at its similar extreme in at least seven years.  The media continues to raise the question if "it's different this time?"  Of course it's not, but it is elongated by the Fed's stimulus.  Yet, even that has ended, or is about to.

This reminds me of late '99, not '07, but should be of one degree higher scale than either of those peaks.

The best play this week is to do just that; play.  Step away from the machines, TV's, and markets, and play.  2014 won't look anything like 2013.  I'm back in the office Thursday morning, with charts and more.  Until then, little should change.

Monday Pre Open (Sunday Eve.) by

About twwadmin

Ken Goldberg is a Registered Investment Adviser, and is the president and chief market strategist at Trading With Waves. Connect with me on Google+
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