This Week's Stock Market Rally Isn’t the Start of Some New Bull Move

My gut feeling is that the market is faking us out and preparing to deliver considerable punishment to the bulls. - What Is That Whistling Sound?, Why The Rally Is Fake, August 31, 2011

Hurricane Irene Foretold by the Illuminati in The Addams Family Movie (Excerpt)

August 28, 2011

reddragonleo.com - Looking at the charts I see the same thing everyone else does… a “pennant” or triangle pattern that’s formed on almost all of the indexes. Which way it breaks is unknown, as the odds of it being a “continuation pennant” (meaning down, as that’s what we’ve been doing for the last month) aren’t that much greater then a breakout to the upside. So, you can’t make a bet based on the odds from a triangle pennant pattern as you had might as well toss a coin in the air and call out heads or tails.

Some important things to note here are the fact that this will be the last week in August and the current price of almost all of the indexes are currently hovering around the 50ma and 20ma on their month charts. It looks like the gangsters are trying really hard to close out the month around these important support levels, which tells me that next week isn’t likely to tank hard like so many people are expecting it to.

The 200ma just happens to be at 1102 spx, which was basically where the market bottomed at earlier this month and bounced back up from. On the weekly chart we have the 200ma at 1152 spx, and again I think that’s why we rallied this last week as they didn’t want 2 weeks in a row closing below that level as that would confirm that it had officially broken down and would turn from support to resistance. Failure to break through this level by the bears gives the bulls a chance to take the helm for awhile and rally back up.

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So, with all the evidence I’m seeing now, I think we will start major wave 2 up next week and try to make a run for that 1260 spx area. Will it get that high, or just fall short around 1240 or so is anyone’s guess? I only believe that the gangsters will do everything in their power to hold the market up above the critical moving average levels I spoke of earlier for the weekly and monthly charts.

Once September starts they can continue to tank the market if they choose to do so? I still see the week of October 23rd as major turn date, and I think it will be to the downside. But I don’t know what the wave count will be, only that I expect it to be multitudes of “wave 3′s”… making it one huge crash period!

If we have that major wave 2 up next week, then we should start the first subwave of major wave 3 down in early September.

Everyone knows that QE2 was the only thing that turned the impossible around last year and stopped it from crashing in April-July 2010 when it should have, but QE3 isn’t going to stop it this time!

Anyway you look at it, this rally isn’t the start of some new bull move that will take out this years’ high… it’s not going to happen folks! Just a “Dead Bull Bounce”… nothing more, nothing less!

This Irene thing will likely divert attention away from the stock market this week and many traders could simply not show up to trade… leaving the market with light volume and allowing the PPT (what’s left of them… LOL) to use the remaining funny money (stolen from the public through massive printing by uncle Bernanke of course) to push this market up all week long.

Ok, that’s about enough reasons to support the forecast that we will rally some next week before turning back down again. While we could sell off some on Monday or Tuesday to reset the short term charts, I think the bottom level of the triangle pennant will hold, bounce and we’ll eventually breakout of it on the upside. Possibly the bull flag on the 60 minute chart plays out and we hit the upper trendline on the triangle Monday morning, and then roll back down into Tuesday to the lower trendline to bounce from?

The only thing that would lead me to believe we are going back down in a 5th wave to take out the 1101 spx low at this point is some surprise event. Right now I don’t think they are planning one for this week. Maybe the have something planned for this coming 9-11-11? Seems to obvious too me, but you know how evil they are… and they really don’t care if it’s obvious or not. This is the last throws of a dying evil empire and in the end they will do things that they wouldn’t have done in the past.

If so, then we could rally up into the 11th or so, and then come back down in another large wave of selling? It would line up nicely with the charts, as the daily will be nice and overbought by then and the weekly will be ready to put in that positive divergence. Of course that’s all speculation and nothing more. For now let’s just focus on next week. Simply put I expect the light volume to lead to a rally… how high it unknown, but an upside breakout of the triangle is expected before the week ends.

But, make no mistake… I’m not bullish by any means! This rally isn’t likely to last long… 1-2 weeks max! Could be only a few days, but I doubt that because the end of the month is this week and they need to close it above those support levels I spoke of at the beginning of this post. Once next month [September] starts, the market is free to continue the sell off again. They just aren’t likely to make it easy for us bears to catch the real move down… which is why I expect this rally to carry on into the following week, and not just this coming week.

There should be wild swings up and down too, but each time the bulls should push it a little higher. If it stretches out for 2 weeks, then the 1260 level could be broken and a move for 1300 could happen. While I don’t know if that’s the case or not, I’ve learned to expect the unexpected now. I think most traders are expecting more selling next week, so I’m taking the opposite side and expecting the opposite.

Good luck everyone…