Charts 05-21: one more time

Tomorrow has all kinds of news and fun, giving us a decent chance at a catalyst for this pullback.  The problem is, the channel we are in is so steep, that we don't even think of the 1640s anymore -- we'll be lucky to tag 1654 mid-day before we are off to the races again -- FOMC notes, etc.

Wave (i) from April 18 was about 5 days.  If we drop and bounce off the channel tomorrow, 5 trading days sets us up for a mid-day reversal on May 30th.  Since this is a blow-off move, maybe we can be spared the agony of a series of drawn out 5th wave extensions and diagonals, some sick eternal subdividing fractal top.  Those drive me nuts.

Mencken, bitchez!

SPX 05-21

I'm really enjoying the short-squeeze in Herbalife and think it is symbolic of our whole sham of a waste-based economy and dead-end society.  I sincerely hope that HLF rockets to $300 and that everyone involved, all of the players, end up horrifyingly melted and sucked back into the Ark like the desert Nazis at the end of Raiders.

Maybe HLF can join the S&P 500 ...

Charts 05-20: 1672 hit

On Thursday I mentioned that the 1.618 extension for the presumed "wave 3" we have been in since 1581 or so, that this would take us up to 1672.  We made that today.  We'll see tomorrow if we can pull back now, or if it was just another speed bump.

The shape of the move up, including the strange op-ex surge, sure looks like a thin ending-diagonal to me.  If it was, then it should fail and retrace to its starting point, SPX 1648.  We have chart support on the lower bound of the channel at 1648 at about noon Eastern time tomorrow.

U.S. news is light, so I'd expect some bit of international bad news to hit overnight, something really stinky.  If we make it to support and it holds, then tomorrow would be a big V bounce.  If we even manage to close green, market bulls will be euphoric.  This will power us to the top.

SPX 05-20

The lower Bollinger band on the daily VIX chart has come in considerably in the last few weeks.  I'd like to see this set up for a final plummet on the VIX next week where it closes down in the 11s, under the bottom band.  That would set us up for a possible strong BUY signal on volatility.  

VIX 05-20

Maybe they can even squeeze in one more reverse-split of UVXY before we roll over.

I've got a precious hall-pass for a solo overnight this weekend.  If conditions allow, I'm heading out and up into the shit in the North Cascades, near the U.S.-Canada border.  It should make for some fine photos.

Charts 05-17: op-ex fun

The move up from 1343 has been an uncannily-clean and consistent channel.  Of all of the tape since March 6, 2009, the last six months have been the most impulsive and actually ... well-behaved.

In the current W5 blow-off channel we are in, I think we still need to cross the current channel, to put in a minor 4 and set the stage for the last leg up.  For all of its excitement today ... the shape of things looked corrective, especially with the (b-wave) triangle pattern that ate up the bulk of the session.

Tuesdays have been green for so long because Monday has been good for a surprise and a red daily candle now and then.  So BTFD kicks in the very next day.  I'd like to see something similar happen next week, starting with a stern drop on Monday to SPX 1646.  This would be the last bear trap in this cycle, before we top and the bear traps are actually short-covering rallies off fresh spike lows.

SPX 05-17

5Y

Charts 05-16

The current W3 subwave we are in reaches 1.618x W1 at SPX 1672.

SPX 05-16

Charts 05-15: Channel improvement

The pop today actually fixed the channel I had going.  It's nearly perfect now.  Looking for a touch of the lower trendline for a long entry -- most likely May 31 SPY calls.

Did you see Daneric's post tonight?  He's got the basic chart I posted last night, with a lot more discussion and details.  Neat.

SPX 05-15

This would have us topping into the close May 28 or 29.  May 30 has the next GDP number release.  I can imagine that could cause a stir.  Negative print?

Charts 05-14: Can we do 1703?

Hehe, I was busy all day at work, and just noticed some comments posted today.  I had a couple of short positions, for a couple of reasons, but I pulled them both once we broke above 1641 and held it.  A passel of SPY puts got dinged, but the UVXY held and was taken out with a protective stop.

Besides the larger channel here, I shorted because Monday, 5/13, was a McHugh phi mate turn.  This may be the 2nd dud of these this year, which is too bad.  He had an amazing track record with the phi mates in 2012, mostly nailing the spike lows.

At this point, I don't see any reason why we don't pause for a couple of days before blowing off all the way to SPX 1703 by the end of May.  This would be an "extended" 5th wave, due to the fact that the W3 (if 1651 holds for now) did not extend the W1 from April 18 by 1.618x or more.

A move like this would probably complete McHugh's "Jaws of Death" to his satisfaction, although we'll see what he says if/when we get there.

May 30th would be the ideal place for 1703 for me, because it would line up my tape with most of the FOMC meetings for the rest of 2013.  Those may be our real "turn dates" going forward.

The sight of a permabear like me looking for stoopid new highs probably means you can short with confidence now ... sigh.  But it's what I'm getting from this last channel and a strict wave count.

SPX 05-14

See how SPX 1703 touches the far wall of a much larger channel, for the whole of the rally itself?

5Y