Competing counts

We're at one of those junctures where we have plausible setups for both bullish and bearish outcomes, on different scales.

can't beat the Chow Yun-fat

The reason is the impulse wave the S&P 500 has drawn since the 2630 low around Thanksgiving (Full Moon).  Is it the c-wave of a long-in-tooth wave 2 up?  Or is it the initial leg of a larger five-wave structure to new all-time highs by EOY? 

Northy thinks the Santa Rally hypothesis is very plausible here and very dangerous (to bears).  The next two days of this week may clarify things: IMO bearish if the market runs higher, and bullish into Christmas if she pulls back sharply.

With POTUS 41 passing, Powell's testimony Wednesday now falls on a day with closed markets.  This adds to the uncertainty.

S&P 500 hourly

Bearish alt

Probably where we are really headed, is a close in the Friday trading session back at 2630, a big gap down Sunday night, and a 400 pt minor crash in the S&P 500 next week.

In that case, the massive gap at 2630 becomes the target for a rally from mid-January into mid-March, ending with the March FOMC.

The 2900s will be done on the S&P 500, as well as the 2800s and the 2700s.  This then becomes a theme throughout 2019.

There are cheap cheap crash puts available on the SPY if you need to hedge, or, God forbid, speculate on the future.  Good luck to all.

S&P 500 daily

Thanksgiving count

Just wanted to post an updated count before we adjourn for the Thanksgiving.

The weather in western WA will be pretty lousy -- thunderstorms! -- this weekend, so I'm set with reading Murray Rothbard's America's Great Depression.  He applies the Austrian analysis of the business cycle to understand the causes of the 1920s credit bubble as well as the extended pain it caused by the various market interventions and policy nonsense in the 1930s.  Very relevant book for where we are today.

Proposing here that the wave alternation between waves 2 and 4 is a flat 2 and a sharp, spikey wave 4, which finishes our first larger leg down in the first week of February.

Of course, the bounce from that only forces the Fed to hike again in March.  Have a happy Thanksgiving, friends.

S&P 500 daily

Point of recognition

Just fell out of the c of 2 channel.

please read this - even if you are pleb-tier and can't get my 1934 GA&U edition

Now the candles get scary -- 500 pts down in 2 weeks -- and a formally-declared Bear.  

Here's the general idea, sketch I made a couple of days ago:

S&P 500 sketch

The Fed will NOT hike at the December FOMC, and this will bounce us back up in "B" for a final kissback visit to the rally channel since the 2009 lows.

Then we get a bond event or similar dislocation in January.  Sorry.  The market visits the 1360 area SPX by the March FOMC, for reasons I will explain to you next week.

This weekend I'll be out on Six Ridge in Olympic NP looking for my fellow bears.

also read this