Monday, February 25, 2013

Charts 02-25: Delays! More delays! Ack

Whenever we approach one of McHugh's phi mate turn date windows, there's always this uncertainty as to whether it's going to be a top or a bottom.  Lately the phi mate turns have all marked bottoms, including the last one on 12/31.

Unfortunately, the decline today was strong enough to suggest that it will continue a few more days.  The McClellan is in bottom territory, but we're in the middle of the wider channel now and still have room to go lower.  

It's more likely that we continue lower for a few more days than that we bottom right now and shoot north for a top into Friday.  The 3/1 phi mate is most likely a bottom.  Ironically, the drop today makes a higher high more likely now!

If that's the case, then we can look at the moves since the November low and make better sense of them.  First, let's propose that W1 ended at 1423, giving us an 80 pt wave, followed by an unusual W2.  Now we can see that W3 extends W1 by a multiple of 1.618x.  

If we can bottom Friday with a spike low to 1474, an 80 pt W5 gets us to 1554 by mid-March, very close to the 2000 high.  SPX 1554 adds a few more questions, but we can worry about them if we get there.

I think the top callers are still early ...

SPX 02-25


Permabear Doomster said...

I agree entirely.
great chart..

Bryan Franco said...

Many thanks for the insights as always. Your thoughts on the lack of pronounced alternation in your proposed waves 2 and 4 ?

Carlos Nibot said...

i agree with your point 4 and 5 but the drop is too low.. i think it will be 1435 which is the 2009 trendline... from there 5 waves to 1266..

thoughts? Why did you choose 1343?

Christian Gustafson said...

Carlos -- everything after the turn, wherever we get it, is just a sketch, based on the idea that our first larger-scale move is back to the start of the bearish wedge at 1158. I'm playing with the 2007 tape as a baseline for this.

I'll post about this in a bit, but this Friday could still be either a top or a bottom (or nothing at all if "turn dates" are bunk). I'll propose two paths tonight. I can't wait to see what Friday brings.

First, I have two girls in the tub to deal with.