Download | Duration: 00:25:55

Download | Duration: 00:27:45

After close consultations with the venerable "Mr. S", I feel the need to issue an alert for an upside surprise.

I'm not going to get into details, but there is a surprise Elliott count and measurements that could take the markets to new highs from here. Friday could have been the reversal. The new count would take the S&P up to near 1250 before the final top.

This is not a primary count, but an alternate one. SO, be on alert for a possible continuation of the reversal.

Also note the weekly interview is in the entry below this one.

Download | Duration: 00:30:48

Tonight the market finds itself in deep trouble. The only question tonight is how deep? The answer is probably "real deep".

My take all along during this advance from the March lows was that it was a B wave, a wave correcting the steep drop from November 2007 to March 2009. Once it finished, the dreaded C wave of the bear market would show up, devastating an unsuspecting public once again with a vicious downside move to, or below the March lows.

There is a good chance tonight that that process has begun. If so, it's going to be an unbelievable ride...sort of like today, only again and again and again and again and...you get the picture.

The signs are all around. Gold and silver being pummeled. Credit spreads widening rapidly. The dollar rising. Stocks getting pounded like a tied up goat. And throw in a global sovereign debt crisis just for good measure.

Whatever the cause or trigger, it doesn't matter. What does matter is that there are more sellers than buyers. A lot more. Liquidation has begun again. When that happens prices go down...potentially a lot.

So be alert tonight. This could be the beginning of the Big One.

http://www.youtube.com/watch?v=d0nERTFo-Sk

Do you want to know how bad the economy REALLY is? Today your Fed Chairman, Ben Bernanke, spent part of his day phoning Senators trying to drum up support for HIS OWN confirmation vote. Why on earth would he do that?

Is it because he loves the pressure cooker he's been deposited in to? Maybe he loves going before Senator Bunning and Congressman Ron Paul in those pesky hearings and getting insulted to his face. Perhaps he enjoys going to bed every night wondering if he's going to be awaken from his sleep by some new financial crisis that he can claim (again) he didn't foresee.

Wouldn't it be easier if he just said "The heck with them. If they don't want me, I'll just go back to the classroom. I've paid MY dues".
It sure seems like that's what most people would do. So why work so hard to keep this seemingly thankless job?

To me it's simple. He understands how serious our (and by extension the worlds) financial problems really are. He believes he has a handle on it and that things are under control. He believes if he relinquishes his grip, voluntarily or by force, everything he worked for will be lost in a moment and the world will spiral out of control....again.

As  result he feels like he NEEDS to be in that chair, and he's willing to campaign to stay there. I can almost hear the exchange now:

Senator Bunning: "Did you order the QE?"

Bernanke's counsel: "You don't have to answer that."

Bernanke: "I'll answer the question. You want answers?"

Senator Bunning: "I think I'm entitled"

Bernanke: "You want answers?"

Senator Bunning: "I want the truth!" 

Bernanke: "You can't handle the truth! Son, we live in a world that has a System, and that System has to be guarded by men with a printing press. Who's gonna do it?  You, Senator Bunning? I have a greater responsibility than you can possibly fathom. You weep for Lehman and you curse the Fed. You have that luxury. You have the luxury of not knowing what I know: that Lehman's death, while tragic, probably saved AIG. And my existence, while grotesque and incomprehensible to you, saved the System! You don't want the truth because deep down in places you don't talk about at parties, you want me guarding the System! You need me guarding the system! We use words like PCE price deflator, reverse repos, aggregate demand. We use these words as the backbone of a life spent inflating something. You use them as a punchline! I have neither the time nor the inclination to explain myself to a man who rises and sleeps under the blanket of the very prosperity that I provide, and then questions the manner in which I provide it! I would rather you just said "Thank you" and went on your way. Otherwise, I suggest you pick up a loan application and borrow some more money. Either way, I don't give a damn what you think you are entitled to!"

Senator Bunning: (voice rising) "Did you order the QE?"

Bernanke: "I did my job."

Senator Bunning: (screaming) "Did you order the QE?"

Bernanke: (screaming back)"You're dadgum right I did!!!"

Now you know what he really wants to say.

Download | Duration: 00:46:30

The S&P once again finds itself range bound. Late last year it was a 30 point range that frustrated most market participants, between 1085 and 1115. Today it's a 20 point range, between 1130 and 1150.

The market tried to break the lower boundary today, but there just wasn't enough sellers to get the job done. So the technical buyers came in looking for another profitable trip back towards 1150, and it appears they may get it.

So the light volume gyrations continue, and the trend is still up....for now. But that could change very soon. So be alert.

The dollar is showing strength, which is what I've been looking for. It closed above it's 200 day ema for the first time since May 2009. We're about to find out if dollar strength is going to translate into stock weakness. It certainly helped hammer gold and silver today. A trip back to the 200 day for the metals could actually be a welcome rest after the blistering run they've seen.

I personally feel like, regardless of how far the metals correct, much, much higher prices are in their future as long as the "Keynesian's" are in charge at the Central Bank. And just know that they are currently in charge.

The election of Scott Brown yesterday in Massachusetts will change the political landscape as self serving politicians scramble to save their own hide. This will bring the Obama administration back to the center and lead to more market friendly legislation than might otherwise have developed. Will it matter? Probably not that much.  But it might boost the sales of pickup trucks. Don't laugh, I drive one!  

Download | Duration: 00:30:40