Tuesday Morning August 9, 2011
I remember when I was a very little girl, our house caught on fire.
I'll never forget the look on my father's face as he gathered me up
in his arms and raced through the burning building out to the pavement.
I stood there shivering in my pajamas and watched the whole world go up in flames.
And when it was all over I said to myself, "Is that all there is to a fire?"
Is that all there is, is that all there is
If that's all there is my friends, then let's keep dancing
Let's break out the booze and have a ball
If that's all there is
Peggy Lee Hit Tune, November, 1969
"Is That All There Is?" is a song written by American songwriting team Jerry Leiber and Mike Stoller during the 1960s. It became a hit for American singer Peggy Lee from her recording in November 1969. The song was originally recorded by Dan Daniels in March 1968, then by Leslie Uggams in August 1968, Guy Lombardo in 1969, and Tony Bennett on 22 December 1969.[1
I excerpted the above from Wikipedia to make a point. Some of the biggest names in music recorded this song, during and after the Tet Offensive in VIet Nam as the stock market fell with the then new bear market. The song was recorded by so many luminaries because it r,sonated with the social mood of the public. The mood was down, the lyrics say it all, that's it, that's all, gee what a disappointment.
By the way, the number one box office movie this last weekend was the prequel to 1968's Planet of the Apes. Joe Morgenstern at the WSJ bemoaned the lack of a Chuck Heston to carry the story as he did then, but that is hardly the point. This sci fi flick which had numerous sequels, was in tune with the public mood, the world turned upside down, apes take on the humans, and win. It was a story of reverse
evolution, going backwards in human development. If you think about it, that is what a bear market is, a backwards development in capitalism, which is exactly what is on display right down to the call for more taxes and spending as a solution.
Hollywood Classic Line
Chuck Heston and two other astronauts crash land on a planet centuries in the future. Spotting some obviously barely capable humans foraging for food Heston remarks,
Well if that's the best they have we ought to be running the place in three weeks!
Planet of the Apes Trivia
Rod Serling of Twilight Zone fame co wrote the script
Jerry Goldsmith did the music score. He was set to do the music for Planet of the Apes II but instead got the call for Patton. His Patton march theme song became wildly popular at college and high school football games sending Goldsmith's star into orbit. Good thing he passed on Apes II....
Okay, now to the markets.
I think we have a handle on the wave count. But as we have noted before, there are other letters that specialize in Elliott Wave minutiae, this is not one of them. But the volume spikes lend accuracy to the idea that the third wave, augmented by volume and the 634 point drop, ended yesterday.
SPY the ETF for the S & P
SPY allows us to see volume in the panel below
Under Ralph Elliott's terms, third waves are the most powerful in the series. So it seems reasonable to peg yesterday's close as the end of the third wave. The governmental intervention around the world also bolsters that view. Then it is a matter of counting backwards to reveal the five wave sequence. Note that volume increased all the way down. On the way down, anic set in, stop sells were triggered, the market had a negative reaction to the President's speech, etc. Frankly anticipating this sort of thing, I posted the three stages of a bear market August 7 and August 8. Please understand that these three mental states of
Denial
Panic
Acceptance
all happen in the same sequence but at different degrees of trend. You can see it above, Wave one down, denial, Wave Two up, see no problem, then as Wave Three swooned, panic set in. See the volume increase as the panic spread? The result was the sixth worst day on Wall Street.
Here is an example at a larger degree of trend to help readers understand what is happening. Yes this is an hourly chart. Recall that in the multi month melt down of Fall, 2008, the market had its worst day November 8, 2008. It then rallied into Christmas for a fourth wave up. But the final fifth wave low still lay ahead which would bottom March 9, 2009. It did so on a much lower point drop and volume, but it reeked of 'throw in the towel resignation.'
Above we are not to the final resignation or acceptance stage yet. This is an incredibly weak fourth wave especially given the world wide government intervention. See www.zerohedge.com for details.
So I believe our pre market recommendation was correct, keep the powder dry. Lower prices and more resignation lie ahead.
Thanks for reading TMP, tell your friends who have not been reading, this is the path to peace with the market!
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