You Should Be Dancing

Not seeing anything in the futures overnight session to suggest a trend reversal, only a modest pullback, if that.

Remember the channel posted yesterday which replaced the wedge?

Here's a wave count for what could be the final fifth wave of the sequence. I'm even leaning toward the "top" being merely a wave three "top" which would suggest a decline into the 1737 area in a larger fourth wave before a larger fifth wave to even higher highs (possibly 2050+). Got that?

Elsewhere, things are getting surreal. Marketwatch ran an excellent story about the sudden 20% decline in stock buybacks (you know, it's what makes EPS look so juicy) only to end the piece with an a classic quote by the infamous Chuck Prince, former CEO of Citigroup, in 2007:

Uh-oh: Stock buybacks are on the decline

"But don’t worry about that," the article said, soothingly. "As Chuck Prince once said, so long as the music keeps playing, you gotta keep dancing."

It's all one big bump and grind now.

And the DJ? The Federal Reserve, of course. The chart below is not the 50 day moving average of the S&P 500. As Jim Quinn showed in This Is Your Recovery, And This Is Your Recovery Without Drugs, courtesy of Zero Hedge, if it wasn't for the Fed's balance sheet, there would be no stock market recovery.

So if buybacks slow down and the Fed trims its balance sheet, what's next? 2500?

Shake your moneymaker.