Are We There Yet? Are We There Yet??

Calm down Timmy, we're almost there... Have we hit the peak of what I refer to as P2 (Primary wave 2)? The guru's are saying yes. I'm saying I don't think so. Who am I to argue with those that know better than me (in Elliott Wave Theory that is). Well nothing is cast in stone with Elliott Waves so I could very well be right. It'll all boil down to jobless claims tomorrow and unemployment numbers on Friday.

Have you noticed something the last week? Economic news has been "good" but the markets have been going down. For the past 6 months even when the economic news was bad they continued to move up. What we're seeing is exhaustion and a little bit of reality. What's been considered "good" has been a stretch at best.

Topping of a market is a process, it's not an event. We're going thru the process right now. Was 1039 on the S&P it? We'll know next week I believe. I'm looking for one more spike up towards 1044-1050.

There are so many warning signs and red flags out there it's scary. In the meantime the gov't is enticing people to spend money they don't have. Cash for Clunkers and the New Home Buyer tax credit are the two big ones.

Think about this... the gov't is trying to get people to buy a house with only 3.5% down and can use the $8,000 towards that down payment. So guess what... people don't have any "skin in the game". Why will people feel compelled to do everything they can to make payments if they get a little bit behind? Nothing. They have no money in the house, so they won't lose anything other than a big ding on their credit. I can ramble on this forever... It irks the hell out of me. The number of future foreclosures is going to be amazing for a long time to come. Home prices are continuing to decline and they'll really fall once this wonderful gov't program comes to an end and the fake inflated number of buyers dries up.

Speaking of which, if you're in the market for a car, wait about 2 months. After the Cash For Clunkers mad dash, dealers will be twiddling their thumbs for a while since everyone that was even thinking of buying a car within the next 6 months did in July and August. I have a feeling that in October and November dealers will be willing to do just about anything to sell a car.

Here's how I'm seeing things in the near term. S&P at 995 right now. Rally Thur and Fri and maybe into Tuesday (Monday is a holiday). And then the big P3 begins. Slowly or plunge... I don't know. I'm thinking a slow bleed for 2 years with the usual ups and downs. But we won't see S&P 1000 or Dow 10,000 again for a very long time.