Quote from PTVtrader:
Jack, Is the scenario you see playing out something along these lines?
I annotated you chart toshow the saucer as an intermediate term formation as part of gpoing from point 2 to point 3.
Considering Depressions is not within the experience of most people. As usual their are several fractal levels involved.
The complexity of economics and econometrics adds to the circumstance.
This week it is being determined how severe the indirect and induced effects will be by cutting the unemployed loose from the support of the government.
We also see the shift from fed to state many new responsibilites for states.
All of this is on top of the failure to deal with the financial industry crisis that began in mid 2006. It is in many ways a perfect storm.
Volume is the MAJOR 'TELL" as you see.
Here is the scenario for the next several years.
Direct economic improvements will not be possible. Too bad. It would have been helpful to address the direct problems of this Depression.
The indirect effects are mostly off the table still. Mark to market ceased quite a while back and it is not possible to deal with either the "artificial instuments, their tranches or their "insurance". Too bad.
Induced effects are spreadding throughout. What is noticable is the nice productivity increases which stretch out the durriation of this period of suspention (the caucering of going form point 2 to point 3. It is natural for employed people to work harder.
There is no substitution effect in Depressions. The current 2nd generation of "greening" is meagre compared to the first generation where green got put on the table. War has been helping at a fine high level of contribution. Keeping the War(s) going is working out quite well except for the huge portions lost to graft and corruption, neither of which are good multipliers.
I guess what happened was technological inovation in the financial industry has far outpaced the ability of regulators to step in and repace the vanished integrity that was a foundation a century ago.
Teenagers (Fanning, Johansen and Frankel and throw in Cohen too) took over information economics in the last decade so information is free and taxing it will not work after all.
So the saucer makes ending the Bear retrace more murky for most to handle. The black volume will wind down more and more are the fanning of the RTL of this move is finally settled. The puts in point 3 of the Depression within the Bear Retrace.
Coming out od the Bear retrace and having the last move of the Depression begin as a Dominant move is what is NEXT. Increasing red volume will begin this dominant short move.
What happens to all the invested captal in long term arrangements of those who run the financial industry as a sales and marketing effort? This type of business folds and more and more managers will cook the books and fail to mark to market. Clients who are served one way of another by the financial industry get screwed as usual. Wealth will evaporate all over the place.
As we all noticed during the first Depression move from point 1 to point 2 the LTL was broken and a VE allowed the new channel to be drawn. Two short term moves ansued and the end of the move occurred in March of that year. this does set a S level (Support) which is a horizontal in the financial industry.
I do not believe there will only be one VE in the third move of this Depresion. My reasoning is that most moves from point 3 to FTT's have VE's more than once.
To back that up, I would like to not what happens after VE's usually. Usually there is some fanning of the trends caused by prolonged lateral movements which end in further Dominant moves to get to the END of the pattern (in this case the Depression fractal FTT).. (Note: the middle of any inverted saucer(intermediate trend) is a lateral move after which the Dom of the market changes.)
So many years out from now the Depression ENDS with an FTT in a multiyear last short move of the Depression.
A good idea is to use the charts of periodicals to determine all of the econometric tweaks that are going on. Some of the neater ones these days are the "gridlock" of the US Congress. The failure of any commissiion's report to be enacted into timely activities. The huge number of foxes in the various chicken coops. An as much as anything the techilogical game playing of the fox and hounds of terrorism. Four tours of duty are common for some US families in avery town and village of the US. PTSD is rampant within these families.
2011 is the fifth year of this Deprssion vis a vis the leading and lagging econometric effects. I can assure you niether my Congresswoman or my Senators have a clue and the record shows all of them are currently being paid off by short term interests of people who make money on commissions and do not care about the value involved in the trade. (See the current thread on the misunderstanding of dark pools)
and other drivel. 
