Looking at the Elliott Wave patterns forming after the close yesterday, I found myself mouthing the 1-2 patterns in the style of Lawrence Welk; a-one, an-a-two, a-one, an-a-two. Checking Wikipedia to make sure I had Welk's style correct, I found that the Seattle Post-Intelligencer had eulogized Lawrence Welk on May 19, 1992 as the "Maestro of Bubbly." Ironic that here we are, ready to continue the next leg of the great unwinding of Maestro Greenspan's 'bubbles', being led in the style of (at least in my mind) the 'Maestro of Bubbly'!

A January 16 Missive "I Hear Bells" suggested that the markets were exhausted. The rising wedge completed two days later, and the pattern is a now a clear 1-2, 1-2 down.

After possibly a small push higher on Friday, or Tuesday, this pattern could quickly lead to a drop of 700 points with greater potential. If the pattern unfolds as expected, it will lead to larger drops later.

Alternative Elliott counts may suggest otherwise, but the prudent person stands aside while this pattern unfolds.