Reflections of Reality SPECIAL: WEEKLY UPDATE 2 & Exhaustion Watch

Pls find the Charts of some of the Highlights this week...

Below pls have a quick looks at our Exhaustion Grid. Pls notice that we've improved the Filters and Indicators significantly. In order for you to better understand our methodolgy we added our EXPLANATIONs further below

Here you will see commentary to the above Exhaustion grid. We numbered our comment for you to follow our flow of the Analysis. There is a bit of everything in here from the leading levered ETF (SDS) that leads the SPY to the clear cut high probability case with the DUG and the EEM up to the potential Rocket candidate in the form of GLD.

The next opportunity for Mr. Market to turn is around NOW.

Bottom Line:

• The market is SUPER extended
• the high could be in or taking place next week
• leading emerging markets & Gold hint at a change in Sentiment
• bear in mind that we deal here with decades kind of extremes

Potential Scenarios for the next couple of months:

A)

1. we will see a correction, sharp, deep, brutal that can run for some time (weeks)
2. expect 10-20% fall
3. March 2009 lows will hold (S&P500: 850 ?? )
4. another Bull attack will follow that reaches higher Prices but lower degrees of Exhaustion and thus forms an Exhaustion divergence
5. ....return of the bear with prices falling below March2009
   

1. B)
2. we skip 1-4 and go straight to 5 because we already have a first degree Divergence in the levels of Exhaustion...