Hit Me!!! (One more time)
Nothing to do with wave counts per se. I was just doing some reading this weekend, looking at both bearish blogs and bullish blogs. The bullish media and blogs (especially on Caps) are all saying that this is the perfect dip buying opportunity. The market needed a short pullback, GS and Greece issues are overblown, BUY!!!
You are a chump (very conspicuous used of this word in a number of places) if you don't buy. It is a bull market, buy the dip!
We who look at market sentiment and the Elliott Wave Principle realize this is a sign of a top. Sentiment is very one-sided. There is no opposition by the bears (we are all extinct and/or hibernating).
The bulls are doing exactly what the market has trained them to do over the last year. BUY THE DIP!!! The amount of uber-bullishness that accompanies this admonition is the very telling thing.
But to the real point of this post
Again, this is just a gut feeling. I am not going to support it with a wave count, just thinking out loud.
* Friday has the shaping for an impulsive sell-off into next week. It *could* develop ... or it might not
* Bulls are in full hubris mode buying the dip and telling everybody and their grandmother to do the same
* Bears perked up a bit on Friday. Rousing from hibernation?
* We are *near* the critical 62% retrace at 1228 on the SPX, but not quite there (peak ~1214). Many of us (including me) think it is "close enough"
* BUT WHAT IF?
* Next week goes exactly according to plan for the bulls? The dip does get bought and we make a higher high?
* 1. Uber-bullishness will become uber-uber-bullishness
* 2. ISEE sentiment reading *which are already OVER 2007 peak levels* will go even higher
* 3. The bear population, having another correction swept away from them, will feel like cows going to the slaughter in pens pre-Dr. Grandin's curved corrals. And the market will receive another short covering burst
* .... This would then bring us to major resistance with a dead bear population, bulls hopped up on testosterone and hubris (having just beaten another correction by buying the dip), and sentiment readings now rivaling 2000 levels.
I like this spot here for a turn. ... But I would actually prefer the above scenario to play out. I think that would be a lot more fitting. And based on the market behavior the last year, what this is really building up to, my gut is saying something similar might just happen.