We did not expect a 400 point increase yesterday. Clearly we got the count wrong. Having said that we are not (yet) prepared to accept that, once again for the so many-th time, we are going to a new high. Typically an extreme correction would retrace about 76% of the preceding fall, in this case that would be at about 25834.

Today we have the new Fed president talking and also Yellen and Bernanke. If they all use the same song sheet, essentially the same one Greenspan used, we can hope for another 4 years of the same to add to the 20 or so already past. However if there is a false note things can change rapidly.

Always keep in mind Greenspan’s words of wisdom;       I guess I should warn you, if I turn out to be particularly clear, you’ve probably misunderstood what I’ve said.      …. which should apply to all four of them. And, by the way, Greenspan just Friday argued that now BOTH the bond and stock markets are in a bubble!!!! and he is a republican.

The usual, then, late last year, Nov.13, and now charts;

So we expected the stock to peak at about $190 plus. It actually went to $217 and change. This is what “throw-overs” will do but, despite that, the EW count was near perfect. It is a clear 5-wave sequence and there is alternation between waves 2 and 4. Wave 5 is almost equal to 3 which is normal if it is not equal to 1.

So why the difference?  The oracle of Omaha gave one explanation. Notwithstanding the fact that he opposed the recent tax reductions, he made it clear that just in the latest quarter the benefit to him, or more precisely his company was $29 billion. This, according to Trumponomics, will soon trickle down to the little guy as Mr. Buffett buys his next 400 mln. yacht, that is a whole fleet of 60 yachts. The problem is that these yachts are mostly built in the Netherlands or Italy. On top of that Mr. Buffett is reportedly a very frugal man who still lives in his first home. Time will tell as they say.

So far it is a clear 5-waves sequence down for wave 1. Then an equally clear a-b-c corrective wave 2. After that it gets a little fuzzy but my best guess is a small 1-2 to start wave 3 (or C).

I have no idea why but obviously if you fall off a stepladder it doesn’t really matter un less you were close to the top. On nearly all metrics the stock markets in the US are right up there. Then if you watched Dana Loesch’s tirade at the NRA presentation at CPAC, you may well wonder if we are not close to the end of civilization.

With few exceptions the British police is unarmed and it has been that way for almost 200 years. They are intent on keeping it that way as it adds a layer of decency to the dynamics of policing civilians. This is in contrast to the NRA philosophy that the only thing to stop a bad guy with a gun, is a good guy with a gun or a teacher with a concealed gun.

P.S. In 1788 the United States of America had existed for about 10 full years as a union between 13 colonies. Its main enemy was the British Empire but beyond that there were the French and Spanish empires, at least 6 neighbouring native Indian nations, another 13 colonies and, internally, in most places a majority of mainly hostile slaves and no functioning police force. The union had no power to tax – the principle reason for its creation – and consequently “militias”, sort of “do-it-yoursef” armies, those referred to in the 2nd amendment, were used to protect property and life when needed. The cartridge, a device that combines a primer, gunpowder, the bullet itself and casing, would be invented in Paris some 40 years later. If you were very adept at front loading you were lucky to fire one shot a minute! This is what the 2nd amendment was originally based on. The AR 15 standard version fires 45 rounds a minute, technically 800 rounds a minute.

First I was playing with the idea that this might be a 1-2, 1-2 of 3. After procrastinating long enough I prefer the 1-2 scenario which would imply that we are now in 3.

Now that apparently the solution of America’s problems with guns is to have more guns, that is teachers carrying concealed handguns, you have to conclude anything is possible. This should drop fast from here on!