Wednesday, September 5, 2012

Charts 9/04: Two paths to a top

Daneric has an interesting Wilshire count of the rally since 1266.  His work is hit and miss, IMO.  He will find new twists on E-W counts and offer up some of the best technical commentary out there, only to turn around and promote yet another leading-diagonal count, which always fails.  Always.  But this one is good.

Apple's announcement of the iPhone 5 on September 12 only adds to the Superbowl atmosphere building around the FOMC and German court decisions.  It could be a top or a bottom, and I'm starting to favor the alt scenario I have here, where FOMC finds us bottoming in the 1388 area.  That is why Daneric's count is useful here, because it saves us from the dreaded wave 1 / wave 4 overlap violation.

Two paths to a top
The pink / alt path here will would rattle call buyers, while not really rewarding put buyers.  Typical wave 4 action.

1388 would also probably mark point 22 on the Three Peaks and a Domed House pattern, too.  The push to a top at 1440+ would give us point 23 and a new season for shorts.

The weekly Bollinger is rising on the SPX.  We will have to chase it, and soon.

SPX since 2000, Weekly Bollingers

Here's the monthly Bollinger, if we really want to blow-off to a top here.

SPX since 2000, Monthly Bollingers


Pieter vL said...

Good post all around.
Definitely seeing Sept 12 timeframe as the low, or perhaps the three wave on the move higher.

I can only be IT bearish on UVXY based on my charts (putting aside the coming split), so we may not see a top til we get nearer to Oct, if then.

My monthlies still aren't offering up much optimism on the seriously bearish stuff.

Rajeev Shah said...

Good post Christian. Makes sense now. A lot of good news has been priced in ahead of ECB by credit mkts especially. Hence a drift down following ECB on Thursday into next week would be more probable scenario.