Market Update:

• Captain's log, trade date 9.29.10 The impossible has happened. From the brink of insolvency in 2008, those in power and responsible for a systemic failure of existential proportion seem to have engineered or perhaps imposed, yet another layer of inflationary distortion upon the financial sphere. Will the growing frequency and amplitude of such corrupt rescues quiet the masses? Will Wall Street follow through with its ongoing V-shaped recovery, while Main Street continues to languish, or will 2010 prove to be the elite's final blaze of glory?

  The above clip runs just over five minutes. We have provided charts and transcripts below.

  

  In observing the fives waves of impulsive ascent from the cycle degree IV wave base in 1974, a sudden parabolic anomaly appears to have manifested from 1995 through the year 2000. Following two years of severe corrective decline, a fifth and final wave of primary advance came to a grinding halt in October of 2007.

  Given the fascinating nature and extended amplitude of this nearly 34-year cycle degree run-up, it is reasonable to conclude that its crest has marked a III terminal of supercycle proportion.

  Upon observing nine degrees of Elliott Wave structure across share values spanning back to the 17th Century, our assessments suggest that a terminal of supercycle dimension in 2007 is likely to sport a 50-50 chance of marking a III wave vs. the more ominous V wave terminal.

  In the unfortunate event that 2007 indeed marks the larger supercycle fifth, similar odds and terminal designations would apply to the next and final level of trend residing one degree above, which is that of the grand supercycle.

  

  Upon closer inspection, we observe that the Dow's miraculous V-shaped recovery from the abyss in 2009 has now lasted longer than the 16-17 months of spiraling decline that preceded it.

  The last remaining challenge for a mission accomplished victory celebration would be a move north of the late April high of 11,258.01. Until this is accomplished, it remains plausible that the monstrous 74% bailout advance attained within a time span of 16-months from the March 2009 base may prove to be nothing more than a snap-back bullish reaction within the context of a larger secular down trend.

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