I noticed that the May 6th low actually was right at the .382 retrace of what we have been counting as "wave 3" in the ending-diagonal that is now terminating the reflation rally effort since the 2009 lows. So let's call May 6th, "wave 4" and be done with it. That would put us in the final wave 5 now, with (a) of 5 complete and (b) either complete now, or finishing up soon. (c) of 5 will be an impulse wave to a top, ideally a touch of the top trendline that defines the wedge.
I'd like to see a steep, peaked, castellated structure up here for our domed-top, something volatile like this with deep retraces that shakes out all of the sissies. It's a series of drops with retraces to visit and reject old channels.
|SPX 05-26 Domed-top structure|
The pattern defines a head and shoulders top with an initial target below 1500 SPX.
|SPX 05-26 3PDH resolution|
This reaches a climax this fall, whereupon the Fed is very likely to do something bold again at the December FOMC meeting. The short-squeeze will be epic.
Ben Jones's invaluable Housing Bubble Blog reports that idiots are waiving inspections again to get in before they are priced out forever again.
CNBC on Colorado. “When Christopher Simmons began shopping for a home in Denver six months ago, he had no idea the risk and the frustration it would take to get one. The 27-year-old had good credit and cash to put down, but that was not enough in this red-hot market. Finally, Simmons went under contract on a small home in a transitional neighborhood, but only after beating out five other bidders. He wrote a letter to the owners, describing how he had grown up in the neighborhood, and then he added a risky tactic.”
“‘I waived the inspection and the appraisal contingencies on all of the offers I made and on this one as well,’ said Simmons.”
“‘Prices are going crazy. Multiple offers, love letters, videos, all kinds of things to appeal to a seller in order to make yours stand above all the others,’ said Denver real estate agent Jill Schafer.”
For all the greater-fools out there laundering Chinese graft-fiats or desperately buying real estate sight-unseen, let me introduce you to Michelle: