Through the Roof of Your Mouth...

Through the mouth of your eye...


The two options I am grappling with for the RUT are shown below.

The Green option has more bullish potential, and [c] = [a] at 794.38.

RUT 10 GREEN

The purple count is somewhat sneakier, and foresees a probably slightly truncated double top, just enough to close the Papandreau referendum gap from late October, near 759.

RUT 10 PURPLE

I think much depends on what happens next in Europe.  The DAX has been really lagging the US indices in this most recent rally phase.  (See this post from SoberLook)  The big question is whether this lag has just been a slow start that is about to explode upwards to catch up, or a very weak rally that will lead to a severely truncated finish to Z of (2).  The black count depicts the former, and the magenta the latter.  Obviously, black DAX corresponds to the green RUT count above, and black DAX up to a double top near 6440 could very well mean the RUT goes to the 794+ level.  Magenta DAX looks for an ugly truncation near the considerable lateral resistance level closer to 6130 (see 60 min chart).

DAX 10

DAX 60 MIN

I want to do a post on the collateral crunch in Europe and the recent LTRO implications, but I am not sure I'll get it done for a bit with the holidays upon us.  So, I'll take this opportunity to wish you all a very Merry Christmas, or whatever holiday you happen to celebrate.

Seid umschlungen, Millionen!

Diesen Kuß der ganzen Welt!