Saturday, December 29, 2012

Charts 12-28

I still don't see why we can't have one last burst up toward 1500 -- into January opex.  For all of the drama in the overnight /ES futures this past week, the actual trading during RTH is tepid and full of overlaps.  We closed right on the .382 retrace of where I have got "A" charted.

The pols will work out something stupid in the next couple of days, which ought to get us through a few weeks.  Or ... or ... this POTUS really is out golfing while it's all falling apart.  I can't wait to see this guy when the SPX is making new lows below 666 and his approval rating is about at, I dunno, 13.1 percent.

After the holidays, I'll be back posting regularly.  Long story, involving a little Kunstler-ische happy motoring.


Tuesday, December 18, 2012

Update 12-19 a.m.: To the moon, Alice

If "A" was 95 pts, and "B" ended at 1411, then a 95-pt "C" can reach SPX 1506 by McHugh's turn date on 12/31.

If the good Dr. McHugh is right in his Jaws of Death top call, we will honor him with an extensive tribute in this blog.  Cheers!

SPX borstal breakout!
SPX 1Y

Monday, December 17, 2012

Charts 12-17: Anyone else see the triangle?

This is looking more and more like a "B"-wave triangle.  We would need one more bump down for "e" of B.  But we may not get it.

/ES is up 4.5 pts as I post this, so we may just gap up in the morning and keep going.  I hope we can pull back one more time to the mid-1420s, so I can get a better entry on this.

EOY call for UVXY ... $12?  We will see.


SPX 12-17
VIX 1Y

Friday, December 14, 2012

Charts 12-14: Another day of this

A little more grinding down, a little more sideways, a little higher VIX, still looking for SPX 1405 for a bottom here.

If we rally hard into EOY, how will we reverse course and begin heading down?  Maybe after the initial euphoria of a "fiscal cliff" deal (all based on CBO models) has set in, the grim math of reality will be obvious to everyone, perhaps even the credit rating agencies.

SPX 12-14
SPX 60D
VIX 1Y

Oh, what the hell, why not ...

AAPL 1Y

Thursday, December 13, 2012

Charts 12-13

So far so good on this retrace.  The higher high -- 1500 by year-end? -- will come if we get a deal on the fiscal cliff over the weekend.

Republicans got nothin', and it doesn't matter anyway.  It will all be over when the $USD collapses in 2014.  Enjoy the circus.

SPX 12-13
20D
60D, showing the inverse H&S setup

Hey I forgot to post my VIX chart

We do have room to pop and drop on the VIX. 

Something like this?

VIX 12-13 1Y

SPX 1405 by Friday?

Posting has been thin this week -- very busy lately with the holidays.  I did build a very solid -- and cheap! -- IKEA bunk bed for my daughters.  They love it, and with the additional space, they now have room for a very nice wooden desk that I found in the garbage on 15th in upper Ballard.  The desk was trashed, but I stripped and reconditioned it, and it is now a fine piece of furniture, and a good place for my girls to do their studies.

If A is in at 95 points, then a C wave, similar to A, would take us to 1500 if we find support at 1405.  A carefully controlled B-wave correction -- a thin little channel, no scary giant red candles -- could do that for us by Friday close.

A final top @1500 is then possible with exciting news from the solons in Washington D.C. over the weekend, plus some short-covering, plus the holiday low-volume HFT march up up up.

I remain fascinated with the idea of a 2007-2009 replay in the markets for the coming months.  I'll do my homework on this and post the analysis tonight or tomorrow.

SPX 12-13 a.m.

The 1Y chart gives a better idea of what a blow-off top into EOY 2012 would look like.  You can also see the inverse head & shoulders from SPX 1343.

1Y

Monday, December 10, 2012

Charts 12-10: North to 1500 it is, then

McClellan oscillator for the last 5 days ... 77.87, 70.46, 66.17, 67.62, 69.93 ...

Small changes each day, we're moving sideways in what looks like a B-wave triangle.  She's wired to blow, presumably mid-session Wednesday with the FOMC.

If we make 1500, I'm sticking with the 2007-2009 chart I posted earlier today, until the tape tells us otherwise.

Actually, repeating that cycle would be the most satisfying outcome for all of this.  The mainstream analysts would start to notice the correlation by late May, and mention it with trepidation.  One by one, the financial teevee crowd will go before the cameras, talking of bottoms and generational buys, while they unload their actual positions like there is no tomorrow (because there isn't).

I'll do some more work on the 2007-2009 redux later this week.  For now, the first target ("a" down) would be the .382 fib back to 666 at 1181 in mid-June.  At least, that's what this fringe doomer blogger thinks.

SPX 12-10

Chart experiment

So let's say we get the blow-off top into year's end.  What if we pull back early this week, into Wednesday's FOMC, and the Fed comes out and promises to do whatever it takes to support the market with ample liquidity through the annoying speed bump of the fiscal cliff.  Maybe Ben even throws in a word of advice for removing the debt ceiling altogether.

There are upper bearish wedge trendlines right at SPX 1500 at the end of 2012.  What if we rally furiously into EOY and actually top there?

I went back and took the big picture SPX chart, added a blow-off rally like this, and then pasted the entire 2007-2009 cycle right on top of it, starting at 1500 on January 1.

Yeah, I know history doesn't repeat ... but this chart ... just take a look. 

Thursday, December 6, 2012

Charts 12-06: Danger ...

Days like this are frustrating, until you zoom out and see that we are still fighting over that old trendline up from 1074.

There's an outside chance that a nasty-bad post-election NFP report tomorrow, plus all the tension building up from the fiscal cliff haggling, plus the loss of this trendline, plus AAPL in its own third wave down, could really blow us up tomorrow and all through next week.  The target would be a wave of 1.618x magnitude of what I've been counting as a wave 1 down from 1464, reaching the SPX 1215 area by the end of next week.  VIX would be in the 30s.

It would echo the drop in early August of 2011.  If we get it, and the 1165 low in January, it speeds up the schedule for 2013 dramatically.  We could see the dominoes fall as early as Spring.

Just thought I would mention it.

OMG ONOZ

Wednesday, December 5, 2012

Charts 12-05: Critical point

Tomorrow and Friday are very important.  We put in a small change in the McClellan oscillator today, so we are looking ahead to a big move.

It needs to be down.  I want to see us at 1351 on Friday, and 1343 again on Tuesday.  If we do this, I arrive at a target of 1165 for wave 1 down, in mid-March.  From there, the fib numbers and supports work beautifully, I can get us to bounce off horizontal support at SPX 1010 and (yes) even 666.

The math and proportions of the line we are tracing are truly beautiful.  Combined with the seasonality shown in the 2008-9 cycle, we are primed to repeat the cycle, but with stunning new lows.  I want to trade this market!

If we're headed up ... then we are back to the bullshit limbo of looking for a Yet Another Top ... whenever we get it, and then figuring out where we go from there.  Once again, we bears are a bunch of schnooks, Freieren, assholes.

1351 Friday would be a save us a lot of time and worry, so let's do it.

I posted a chart early in the session this morning, that included an Andrews fork.  The fork is unchanged on tonight's chart, and you can see that it contained the sharp bounce off 1398 from later today.  Assuming 1351 by Friday, I expect a similar bounce on Monday, for a minor (iv) up.

3 of 1 of C down
The precise wave timing on this chart doesn't sync with McHugh's next phi mate turn date, but who knows, maybe it will still line up with an inflection when we get there.  And there's always the fudge factor of a couple of days.

We took the girls to "Zoo Lights" at the Woodland Park Zoo in Seattle tonight, a holiday fundraiser where they keep the zoo open at night with extensive light displays.  The Point Defiance Zoo down near Tacoma is famous for doing this each year, but they are going to miss the bulk of their visitors from up north (us) now.  Even the zoos are getting cutthroat with each other these days!

-4 so far on the overnight /ES and I hope I don't ruin it by typing it here ...

Update 12-05: Sweep the leg!

SPX 1343 is possible as early as this Friday, if this Andrews pitchfork is any good.

Be careful out there!

Orange lines for the pitchfork

Tuesday, December 4, 2012

Charts 12-4: Breakdown

Permabear Doomster mentioned that this may take longer to play out than expected, which sounds good after today.  The next move I'm looking for is a return to 1343 and a sharp bounce.  The full wave 3 down takes the entire month of December, finishing up 12/31.

Today was annoying, never quite getting that breakdown through 1400.  Meanwhile, I'm holding some toxic ETF like UVXY, bumping up my stop a few dimes at a time.  It actually behaves nicely, oscillating gently between Bollinger bands on the 2-min chart, until SPX jerks north and UVXY just dies, taking out my stop and many others.

You can't hold UVXY without a stop.  If the 1500 / blow-off top crowd is right, it's going back below $10.  Hopefully I'll get another nice entry on it soon.

/ES is up 6 points tonight, but it could just be a halfway-back overnight move.  I guess we'll know in the morning where this goes. 

Dropped by Value Village on the way home tonight, found a double DVD copy of John Waters's "Pink Flamingos" and "Female Trouble".  Score!

SPX 12-04
60D

Monday, December 3, 2012

Charts 12-03: Micro-count Monday!

Wave 2 sure looks complete today, both in its form and magnitude.  I also count a clean 5 waves down from the top, one of those mincing, delicate waves that looks like it's stalling, waiting for a headline to save the day.

At some point we will likely get that headline, for a "compromise" or continuing resolution or a Gramm-Rudman XXIII scam to run on us, and we'll get our bounce.  For now, I want to see 2 weeks of serious selling, selling that builds to a white-hot panic.  We've got a lot of air under us.

Micro-count of today
Ending-diagonal triangle C of 2
If we can hit my targets by 12/14

Saturday, December 1, 2012

Charts 11-30: 1200s?

The fiscal cliff issue hits home this week; no surprise, the President is completely useless here.  I'm looking forward to his leadership and management skills when the shit really jumps off next year.

Private Vasquez: "Let's rock!"
I'm really digging Permabear Doomster's work lately; I wish I had discovered his excellent market blog much earlier.  Already he's proposing idea about certain fibs for the days ahead that are making me think about how all of this may play out.

The overall theme of theme of this blog is that we have a stiff bout of deflation and uncontrolled deleveraging dead ahead, resulting in a 5-wave plunge to new market lows.  Upon the completion of this crash and collapse, the petrodollar standard itself may break down, ending in a dramatic hyperinflation of the US dollar, and the end of its reign as world reserve currency.

Any profits made during the collapse, and not lost altogether from bank vaporization or re-re-hypothecated asset swindles, will need to be disposed of before it is complete.  The plan is to trade the collapse, and, if successful, get out of fiat money altogether.

Then, it's time to get some geese and go live the World Made by Hand.

from 1 DM to ... 1 DM

Friday, November 30, 2012

Charts 11-30 a.m.: Wave 2 almost in?

Bumping up against overhead resistance, here's a proposed count for the bounce.

Wave 2 with an EDT C wave
The alt is that They just gap us 10 or 15 or 60 points up and over resistance in the overnight /ES next week, fulfilling everyone's SPX 1500+ Jaws of Death etc models.

I'll post a study of the 2008 cycle over the weekend.  The initial retraces in the "A" wave off the top were deep -- exceeding .618, IIRC. 

By the way, I just noticed that in my larger chart, I have us bouncing up in a wave 4 back to 1260 into the end of 2012.  This would mean that both 2011 and 2012 would be nearly perfect dojis.

Tuesday, November 27, 2012

Charts 11-27: No changes

An exciting gap down in the morning would give us a nice island reversal with the gap up on Black Friday.

Exceedingly bearish!

Monday, November 19, 2012

Charts 11-19: Über-bearish case

We took so long to grind down in that selloff, that we were terribly oversold.  Are we now headed for crazy new highs, or ... are we in a wave 2?

I'll present the Über-bearish case.  If you can find anyone else posting charts on the internet who is this bearish, while making an actual technical case for it, please let me know.  No Yahoo! message board crash calls, please.

We regained the 200 DMA today, but we still have even more important resistance left overhead -- the rally trendline from 1074 through 1266.  The bulls have to retake this one, and soon.  The 50% retrace of the drop from 1464 to 1343 is 1403, which is where I have (i) of my W1 ending, on about November 28.  If you believe in lunar events marking chart turns, there is a full moon that night.

A failure at 1403 gives us 3 weeks of free-fall, to the low 1200s (1202? 1206?) before December opex. This drop would actually take us through the 2009 rally trendline up from 666.

The turn date at EOY would be the end of a 4th wave retrace that attempts to retake the critical rally trendline from SPX 666, giving us our 5th wave down into January.

Late January and all of February is retrace and a final attempt to retake the trendline from 666, this time failing at SPX 1300.  The market collapses to SPX 589 by the end of June (2013).

See the 3Y chart for the trendlines and how these waves would fit them.

mid-term
3Y

Sunday, November 18, 2012

Books: Saving Max Weber

I ran into the classic problem faced by book hounds while out at Magus Books near the University of Washington last week -- what to do when you stumble across something you already have?

In this case, it was a rare edition of Max Weber's very famous, The Protestant Ethic and the Spirit of Capitalism, in what seemed to be very good condition, with the dust jacket, for only $10.

I already had this book, a 1948 2nd printing, a bit worn, with no jacket.  I found it in a bookstore on Clark Street in Chicago many years ago.

The new copy is the 3rd printing of this edition, from 1950, is tighter and far less worn than my older one is, so why would it be priced here for a mere pittance?


There must be something wrong, so I took a closer look.

Folks, this is why you beat your kids.  Beat them, beat them some more, then lock them in the cold garage for a few weeks.


Crayon marks and a torn endpage!  The humanity!

Well of course I picked it up.  $10 ... heck, I would pay that just for the dust jacket.  So far, I tried removing the crayon with an iron and absorptive paper, which did not work.

Here's how it looks on my shelf -- without the dust jacket, next to my 2nd printing and a 1st English edition of Troeltch's classic Social Teachings of the Christian Churches.  The 3rd printing of Protestant Ethic is on the right.  George Allen & Unwin was the great publisher of the Continental scholarship of its day.


Anyone have any suggestions for removing red crayon from 62-year old paper?

Saturday, November 17, 2012

Charts 11-16: Capitulation day?

I've got us in the midst of a wave 3 down that has not extended its wave 1 by the wanted 1.618x magnitude, for which the target was SPX 1334.  I'd like to see that Monday, with one last burst of consistent selling.  The McClellan has already put in a low, so if it can hold steady while SPX takes a dive, it will show a divergence that will help us mark an IT bottom here.

But any bounce from here should only target the 1361 area, before rolling over again into a 61 pt wave 5 that will take us to 1300 or so.  That would set up a 100pt rally into EOY.


Wednesday, November 14, 2012

Charts 11-14: Toasted channel

Well today set things straight on the progress of the wave 3 down.  We broke through the optimistic channel I had drawn, and now it fits much more nicely into an Andrews Fork drawn from the top.

1.618x the 61 pt wave 1 targets the 1334 area.  I could see that move on Monday, but only if they can hold things together Thursday and Friday with some retrace.

If the larger wave only bottoms in the 1300 area (and not down near 1260), it shortens much of the subsequent waves that would build upon it.   Some simple fib math then puts the trendline between the 2002 and 2009 lows back on the table as a possible target for the full fall 2013 wave 3 of C down.  SPX 565?

VIX still below 18 -- no real fear out there yet.  Super congrats to all FB longs!  You beat the "obvious" retail trade.

A rally into the EOY would likely be on delusional optimism that the Fed will figure out how to keep the plates spinning, plus short squeezes on the "obvious" fiscal cliff trade.


Tuesday, November 13, 2012

Charts 11-13: Slow-motion wave 3

Today looked like a and b of a wave 2 up, correcting the drop from 1433 to 1371.  Ideally, c of 2 will loiter and eat the rest of this opex week, leaving us at 1402, well within the confines of the channel.

That's 378K of SPY 140 puts going to Options Heaven!  poof!  Only to resume the decline next week ...

I think I have new (old) music to grind charts by -- Frank Sinatra's deep, dark "Only the Lonely".  Now there's an album that is coherent and complete, a real work of art.

short-term SPX
60D

Charts 11-13: Channel and a Crash Call

Sorry about the dearth of posts, I've been enjoying watching the markets lately, and spending a lot of time with my kids.  My four year-old has made tremendous progress with her reading, so we are spending a lot of time together.  She has now discovered long vowels.

I had a good score on some old books from Grosset & Dunlap over the weekend, but I'll cover that another time.  Remember, I'm the guy in the pulp sci-fi novel Lucifer's Hammer who is feverishly squirreling away books as doom in the form of a comet strike on earth approaches.

I think we're in a nasty little channel, that will likely take us down to the 1270 area into the end of 2012.  If it does, then we can look ahead to early-mid February for the moment where its retrace will rollover into a market crash to the 2010 flash-crash levels.  The channel will also complete the Three Peaks and a Domed House count. 

In February, the 1370 area would be a 50 retrace of this decline, echo the 2011 high, and may even have the 200DMA in the vicinity.  Neat!

We blew a second Hindenburg Omen yesterday, and I'll guess that February 2013 is the first crash event that lies ahead.

If you haven't figured it out already, if wave 1 finishes in June, that gives us the summer to retrace that move, before things get really, really bad in the fall.

the channel
the (first) crash

Thursday, November 8, 2012

Three Peaks and a Domed House update

We closed under the 200.

Tomorrow is a huge test for the Three Peaks and a Domed House I have been tracking off and on.  

If we gap down and plummet tomorrow, heading as low as 1329, then the 3PDH is on and the end-of-year rally scenarios are toast.  Any rally into EOY would then be retrace.

Here's the count with 1464 as THE TOP, everything we have seen since, and how it would fit into a Three Peaks count that completes with the Full Moon at the end of the month.

SPX 1464 top count and W1 down
SPX - Three Peaks and a Domed House

Wednesday, November 7, 2012

Charts 11-7: Three options

I'm still amazed at the tremendous brass balls on the Obama folks for using such an historically-charged slogan as "Forward" for his campaign.  But that's all history, the Presidency is all his now to enjoy as we head into the Long Emergency.  A whole constellation of old GOP stars is now extinguished, bunch of has-been losers, an important step to the dismantling of our current institutions and what remains of their shaky legitimacy in the days ahead.  Both parties are doomed, as is the entire arena where they play.  Good riddance!

We threw a pin into the important lower trendline from 1074 through 1266 today.   Therefore, I think we completed a wave 4 and should rally.  McHugh thinks it could last into the end of the year; I'd like a sharper, shorter rally, jammed up hard into November opex.  This leg would compare to the original rally off 1266 to 1363, and end by reaching the trendline from the 2011 high at 1370.

That would still give us plenty of time, and a route through the various obstacles, almost to reach Goldman Sachs's napkin target of 1250 SPX by EOY.  I'd like to see us land on 1266, for horizontal support as well as a Really Important Trendline up from the 2009 lows.

Here are three options for the rest of the year on one chart ...


Tuesday, November 6, 2012

Chart 11-6: A 1464 top count

Our inability to descend enough in the last few days to touch the trendline I had in mind has me reconsidering the count, and wondering if we did indeed already put in our top at 1464.

The wave action this week would then be that of a wave 2.  1434 is the HWB of the initial drop from 1464 to 1403.  If this is correct, we rally a few more points, roll over again at 1434, and chop our way down to the 1300 area by the full moon at the end of November.  This also fits well with the Three Peaks and a Domed House count I was tracking earlier.

This would be the first leg of a larger drop to 1040 SPX, centered around debt ceiling worries and woes this Winter and into Spring of 2013.  After they paper over the intractable problems for a bit, we will rally through the summer and crash all to hell in the Fall.

Mitt Romney will be gleefully watching along with us, and, hopefully, buying index puts.

IMO Mitt never should have apologized for the 47% remark -- it's the first time a pol has spoken the truth since George W. Bush said, "this sucker's going down".  Oh well, too bad.

Anyway, here's the 1464 top count.  You could probably move the A and B around if you like, and get something else that works.

Monday, November 5, 2012

Chart 11-5: Two trendlines

I'm watching these two ascending trendlines.  The first represents the minimum decline needed for us to finish up the current retrace wave and label it as a "4", because we will then have an unbroken trendline between wave 2 and wave 4.  This trendline is right at 1400 at market close tomorrow.  What a cliffhanger if we close right on it!

The second trendline runs from 1074 up through 1266.  Past this, all we have for one of these supports is the line from 666 through 1074.  We'll test (and break) that one this Spring.

I think Goldman Sachs may have made a great call with their 1250 by year's end.  I like 1262.  But first I'd like to see a crazy round-trip to from 1400 to a top, straight back to 1400, with one last bounce before we roll over.

Sunday, November 4, 2012

Charts 11-2: Romney for teh POTUS

We're still waiting to put in a bottom on a wave 4 move here, before a final rally to new highs.  Tomorrow?  Tuesday?

Either candidate winning could be an excuse for a rally here -- either a continuation of Fed policies with an Obama win, or a business-friendly regime with Romney.

I used to have an apartment about 4 blocks from Obama's house.  I was at 53rd and Drexel; he lives at 51st and Greenwood, across the street from a Reform synagogue.

I've got more in common with Paul Ryan.  He grew up about 20 miles away from me (just over the border in Illinois), we both worked at McDonald's as teens, graduated high school the same year (I'm a year younger).  We both like our Beethoven and our Austrian economics, even dated black girls in college, the works.

I voted Romney/Ryan not because I expect any fixes or solutions to what ails us -- far from it!  I'm a kollapsnik and will continue to be, no matter who holds what office.  We're well past the event horizon on peak debt, and collapse is coming -- and it is deserved.  I simply think Romney would bring a better class of people into the office, compared to the thoroughly corrupts flacks like Eric Holder.  Joe Biden?  You have got to be kidding me.

Also, with Republicans in power, the Press will be immediately hostile to them and may keep them in check from any excessive power grabs on our civil liberties.  The first thing we will see, within weeks, are a torrent of pieces about the economy, the homeless, hunger in America, you know the drill.  But at least the Press won't fawn over the chief executive like it does today.  That's got to count for something.

I'm also curious to see what Ryan's professed Austrianism counts for if he makes it into office.  Austrian economics has a lite version for GOP types who oppose government intervention in the economy, but the real teachings are much more severe.  The entire existing financial sector goes poof in a heartbeat under a real regime of Austrian credit austerity; a lot of conservative pig-men financial types would not appreciate that in the least.

Still looking for our low -- 1396? -- followed by a sharp rally to a final new high.  There's a nice trendline over from the 1370 high that is right about at 1486 on November opex.  That would be a great place for the rally to call it a day.  Techs have topped and led the way down, and would bounce for a partial retrace on this final rally.  What would lead?  Financials?  Homebuilders?  Toll Brothers ... LOL ...

2Y
60D
Short-term