Below is a weekly chart of the Dow.  Look how beautifully it’s cornering itself into the intersection of the red and yellow lines, which were drawn months ago.  Just two days ago I almost wrote a post stating that the recent 2 day rally would be followed by at least a few down days, into the yellow line.  This was BEFORE the Syria news came out.  (I only didn’t write it because I’ve just been too busy.)  Right now, I suspect that the market will continue to corner itself until it breaks into the clear above the Big Red Line.  I give this a 70% chance.  If it doesn’t, and it falls below, watch out.  The market could tumble precipitously.  But, in a way, this is good news.  Months and months ago, I was predicting another major crash as soon as the charts hit this latest line, thinking that we had another wave to get through in this multi-decade sideways correction.  I was hoping that the flash point for the crash would be a war panic, similar to the panic that ensued during the gulf war, and not some financial calamity.  (An aside: None of my guesses were Syria — that I recall.  But still, Elliot Waves predicted something like this months ago?!  So much for voodoo science.) Why is this good?  Because I believe that what the Fed is doing by printing money to fight deflation will separate our very negative current social mood from balance sheet bankruptcies.  Which generally run hand-in-hand, causing massive unemployment as in the Great Depression.  Net, net, I believe that we are truly learning how to smooth out our economy, and that we’ll never have to go through another Great Depression, as all the doom and gloomers are still predicting.  I believe that we learn as a society.   I can see this in the charts…unfortunately, most Ellioticians are true doom and gloomers…it’s actually hard for me to read their analysis…it just depresses me.  So, if a war panic causes a major stock market slide, it most likely means that we’ve avoided financial calamity, and that we’ll quash a few more crazy dictators along the way for the next decade or so, and we’ll just go along with our happy lives in the good ol’ US of A — without a major impact to our relatively very wealthy lifestyles.

A Beautiful Picture

A Beautiful Picture

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