hctv presents life of investors monday, page-4

For the past few weeks I have been of the opinion that we are completing a series of fifth waves on the SPX which has made me somewhat cautious. Interesting that the waves appeared to sub-divide yet again on Friday night. I saw someone refer to this now as nano waves which is a good description as each wave is now down to hours.

But we are starting to see some non confirmations. Chris mentioned the Trannies. While I am not an exponent of Dow Theory, I do like to see the Trannies confirming the trend of the overall market and that isn’t now happening. But the non-confirmation that really worries me is copper. Don’t like that fall last week when the SPX was making new highs for the move.

There is one bullish point that I should mention – the Russell 2000. I follow this index pretty closely as I have always considered it “new America” as distinct from the SPX or the Dow which cover the bluest of bluest or in other words “old America”. For the past couple of weeks while the SPX was going sideways with a slight upward bias, the RUT has been gently consolidating slightly lower suggesting that the market might already have been undergoing the correction I have been looking for – just that it doesn’t show up in the SPX. While it might just be indicating another case of non-confirmation, it is worth watching as it could have bullish ramifications.

Any move now below Friday’s low of 1357.24 on the SPX would be the first warning signal that the correction has arrived.

New moon on Tuesday. While it isn’t a particularly strong one, it just might be enough to tip the balance.

And for everyone that continues to complain about the fact that we have underperformed so badly, keep in mind that the Aussie dollar is partly to blame but in my opinion the main factor is “Operation Twist” which is really just QE3 in drag.