The spike end of the rally will probably kick off 9/12 with an approval of the ESM by the German Constitutional Court, after which, it really won't matter whether the Fed announces QE3 or not. ESM will be enough to perk up the Euro and the broader indexes.
So my alt is now that we head up immediately to 1440. But I think we first head a bit lower.
The fast-crash model I suggested is of course not happening -- it should have started by now -- but I can certainly see us top soon and begin a series of declines that build into larger waves into 2013. This will culminate in a full-on crash from about the 1200 SPX level to lows well below March 2009, in Fall of 2013. There will be plenty of action between now and then.
With Three Peaks and a Domed House as our guide, I'm looking for the first leg down off the top to target SPX 1260. It just so happens that the rally trendline up from 666 intersects with 1260 right on December FOMC, which makes for a nice target. I'll post this chart tomorrow.
If we get to 1260 well before then, say, in November, then December FOMC could be a top instead, and this thing is going to move very fast. If it's a bottom, then we can speculate for now that we may see a new Administration in the White House this fall, and they will find some way to stall the EOY fiscal cliff. This could be continuing resolutions or Gramm-Rudman XVI or some other clever play for time, possibly involving Fed intervention as well (December FOMC) to calm the waters in the bond markets.
If December FOMC is a top, fedgov drops the ball on this and we have a minor crash in late December.
As far as apocalyptic scenarios go, I don't see this stuff happening until C down is complete and the economy is in ruins. No one is going to cut off Food Stamps as an austerity measure, it's much more likely that they will lose their purchasing power overnight as the result of a [petro]dollar crisis.
Then, yes, we probably have a 3,000 mile wide Yugoslavia on our hands. Make sure you have a farm with fruit trees and some geese by then, OK?
|Completing 4, then 5|