Monday, August 27, 2012

Charts 8-24 and 3PDH update

Looking for a small drop at the open tomorrow for a minor wave 2, which is promptly bought and pumped on low volume all week.  It would be superb if we could peak at SPX 1450 right into Bernanke's Jackson Hole address.

I expect him to announce some technical tweak of the current ZIRP regime, maybe lowering the rate the Fed pays for the banks' excess reserves to be kept at the Fed.  No ambitious QE program, though, until the US fedgov has more debt ceiling space in which to play.

Proposed top into Jackson Hole
Topping into Jackson Hole, we would then find support back at 1400 and bounce on expectations into the German Constitutional Court decision re the ESM.  The drop from there shoots us back toward the 1300 area.

Things start rollin' downhill
A final selloff brings us back to 1260, in the neighborhood of point 10 on the Three Peaks and a Domed House model I am tracking.

Speaking of which, I want to propose now that 1426 SPX was point 21 on 3PDH, and the drop back to 1398/1400 this past week was point 22.

Three Peaks and a Domed House
I took the girls hiking at Obstruction Point in Olympic National Park, in the rain shadow of Mt. Olympus and the Bailey Range.  We threw snowballs and I introduced them to a hiker's best friend in the mountains, the trusty ice axe.  I have a small, lightweight model used for speed hiking that actually fits them perfectly.

August snowfields
The air is so dry here that your sandwich bread gets scratchy and rough on the surface while you eat your lunch.
Rain forest?
I got a speeding ticket outside of Port Angeles, which sucks, because it's not worth travelling out there to fight it.  Cop said I was doing 68 in a 55, which is insane, because I had the car pegged at 62 on cruise control.  I consider the $144 ticket my contribution to the police pension fund, LOL.

Mt. Olympus and intervening ridges


Unknown said...

The 3P&DH pattern looks like a fit.

And I agree with your near term move higher, but I have it possibly running into next week as well.

Where we disagree is on the next high being the top.

My weeklies concur that we are topping; my monthlies don't.

So I suspect 88yo Henry at SI has the count correct. We're nearing W3 top, and there's one more push ahead for later this fall.

Would prefer that not be the case, but its kinda outta my hands.

PS -- I'm batting about .300 trying to prove I'm not a robot.
Baseball that would be good; here not so much.

RP said...

Thanks for the updates Christian & Pieter.
Lol...struggling with the same proving not a robot. Can never get it first time.

RP said...

Potential inverted H&S setting up around 1407 area (possibly to open around tomorrow) and 1416 as neckline.

christiangustafson said...

You got it, Rajeev. The scenario I drew last night, just a day late.

The consumer confidence # releases 30 minutes into RTH tomorrow; it may mark an intraday turn and the next leg of the rally.

christiangustafson said...

No post tonight, just looking for this pullback in the morning, and a sharp rally resuming with the consumer confidence number 30 minutes into the session (or earlier, if the dip is bought from 1406-7).

I sketched it out on a chart, but it didn't add much. Nor do we have much to work with for a channel on the move since Friday. Tomorrow will clear things up for us.

christiangustafson said...

Ack, one more quick thing, was thinking about it earlier, and McHugh's update just reminded me.

Small change on the McClellan oscillator today suggests that a big move on the indexes may be coming very soon:

But which way? (I think up.)

rd said...

Carl Futia 3pdh prediction

"I suggested that the peak of the domed house might be expected in early October of 2012. The upper green trend line drawn through the May 2011 and March 2012 tops suggests that the domed house top will occur somewhere in the 1450-1500 range."

RP said...

Potential it's still in wave 2 of 5 from the recent bottom. Might rally into & past Jackson hole and then hit a wall with the ECB on 6-Sep.