Tuesday, July 30, 2013

Charts 07-30

Posting has been and will be light for awhile -- summer is for hiking!  I took a week off work to take my girls backpacking at Mt. Rainier and out in the Olympics.

This week I managed to get 15 miles out of them over two days.  They were real troopers.  Groves of tasty thimbleberries at their peak didn't hurt at all, either.  We ate six different kinds of wild berries over the weekend.

Contouring above Ross Lake, North Cascades

For tomorrow, many are looking for a 5th wave up, to complete the larger set of waves since 1560.  I am still interested in the ending-diagonal count into September, which would have us sell off pretty hard into the end of this week.  The .618 retrace is all the way down there at 1613, and this channel allows for that.

SPX 07-30

Friday, July 26, 2013

The ending-diagonal into the German election scenario

In this scenario, we are looking for a specific terminal pattern such as an ending-diagonal to tell us, once and for all, that this reflation rally is OVER.

The wags on ZeroHedge have suggested for a long time that the German election in September could be such an inflection point.  We can speculate on the game theory re how it could turn out:
  • Merkel loses the election to some wild Young Hegelians?
  • Merkel wins the election and can now dump on Europe?
  • Merkel wins the election and Europe reacts against her and Germany?
  • Other scenarios where the election signals a massive risk-off moment for Europe.
I'm sure there are many more permutations, we can sort this out as the date approaches.

SPX 1768 is the target for a W5 similar to its corresponding W1, which ran 208 pts from 1266 to 1474. 

If this is indeed an ending-diagonal, then the first wave looks complete -- a three-wave move.  Confirmation will be that we continue to drop, possibly in a very steep channel, which would bottom violently into next week's FOMC.

My take on QE and the future is that the Fed will keep not taper, that QE will continue at full speed, while the rest of the world collapses around us.  This will produce frightening drops and violent retraces, in other words, a bear market.

SPX 5th wave E-D into the German election

Monday, July 22, 2013

Charts 07-22: Alt count for a 7/31 top

My friend Permabear Doomster signaled a note of caution today, just the sort of remarks to make one nervous, so I quickly reviewed my chart, looked at the anemic tape, and pulled the ripcord on some weekly SPY 170 calls I was holding.

It is very possible that wave iii of this final (??) move here is in, despite the /ES futures being up 4.5 pts in the overnight session.  The 3rd wave looked balanced and arguably complete, so I did not want to gamble on the overnight session with the calls.

What Doomie made me consider is the possibility that this runs all the way to next week's FOMC and the POMO schedule that will be announced after RTH next Wednesday, giving us a 7/31 top.

If we get a 4th wave here, for a couple of days, and a final rally into FOMC, then we can end up in the neighborhood of 1730.  But first we need to burn off the /ES green overnight.  Maybe Los Angeles can default tonight -- that should be worth 6 or 7 handles.

Here's the proposed alt count.  Wave 3 actually extends when you compare it to the 5th wave, not the 1st.

SPX 07-22

A 7/31 top actually has some really neat aspects to it, when you apply the 2008 crash tape and timeline from there.  I'll explain it all if we ever get our top and a fresh new bear market to enjoy.

Hey, just to make it clear where I stand, I updated the tagline of this blog.  Deflation really is the cure for all that ails us.

Sunday, July 21, 2013

Can we make 1740 this week?

SPX 1740 midweek would be a great place to finish up the rally since the March 2009 lows.  Heck, every day since then has been a great day to finish the rally, but now we approach a decent crossroads technically that may setup the top to this nonsense.  1740 would be terrific!

Saturday we took the girls down to the tunnel borer dedication for the tunnel that will replace the highway 99 viaduct on the waterfront in downtown Seattle.

"Bertha" the tunnel borer
Grind grind grind

I very much enjoyed the carnage in Microsoft stock on Friday, and look forward to MSFT returning to the low teens or even single-digits where it belongs.  BBRY will make it there first, of course, and it is currently sporting an 8-handle.  The world does not need either company.

Oh, here's my updated daily on the S and P 500.

SPX 07-19

We had a low tide this morning, so my 5 year-old and I took the long loop walk along the parks and beaches on the north end of Seattle along Puget Sound.

Great blue herons on Puget Sound
It looks like Crown Hill Lutheran Church is done.  Condos coming soon.

Crown Hill Lutheran Church
The pews stacked outside

"What are these churches now if they are not the tombs and sepulchers of God?"  

One thing you notice reading captain Sig Hansen's book is that not only is it a great portrait of the Old Ballard neighborhood, but that now, Sig and other successful crab-fishing families have since moved away to the suburbs.  This is one consequence of Ballard and north Seattle becoming less Scandinavian lately.

Excited to see how this week works out.  Detroit was worth a full 5-handles on the SPX, but I have a feeling that Portugal and Italy may be worth a little more.

Tuesday, July 16, 2013

Charts 07-16

It certainly looks like wave iii is over -- we broke out of its channel today.  That may be it for wave iv, but there is still plenty of room in the larger channel -- the one up from SPX 1560 -- to bounce around a bit.

Looking for this to finish up next week, with a touch of the top line of the rally channel from the March 2009 lows.

I'm also working on planning a good overnight hike in the North Cascades that won't kill my girls.

SPX 07-16

Thursday, July 11, 2013

Charts 07-11: Channel adjustment

I decided it would be a good idea to sketch the waves with a properly extended 3rd wave, which, at 1.618x wave i, would bring us up to 1701 or even 1702. 

On the chart, you can see a channel line from B of 4 up at 1702 next Tuesday.  As I highlight here in green, we bounced off the lower bound of this channel a couple of times already.

So this is an ideal, Euclidian, zero-gravity five-wave impulse, with perfect 3rd-wave extension and equality of the 1st and 5th waves.

SPX 07-11

Wednesday, July 10, 2013

Charts 07-10: Bear rout

/ES is up 17 pts as I post this; it looks like tomorrow may run 30+ handles on the SPX.

"Top Secret!" - the Anal Intruder

Now it really looks like we will reach my target of 1687 or so by EOW.

Ben should have said today, "We can't taper until we reach point #23 on the Three Peaks!"  Then everyone would understand his actions and even sympathize with him.

July 25th or 26th, we have the upper TL of the current channel intersecting with the upper edge of the Big Rally channel since 2009, right around 1740 SPX.  This would be a great spot for point #23 and the return of the deflationary bear market.

SPX 07-10

Monday, July 8, 2013

Charts 07-08: It would appear W4 is complete

It certainly appears that that 4th wave we were counting ended on a sharp C of 4 at SPX 1560, which is very close to an exact .382 retrace of the long wave 3 that ran from 1343 to 1687.  There was also a "major" Bradley turn on June 22, if you believe in that hocus-pocus.

This morning we exited the W4 channel, and held it into the close.  Tonight we will add to these gains, and we could see 1687 again as early as this Friday.  Looking for us to finish this up with a final touch of the intersection of two major trendlines and channels, toward the very end of the month.

So ... July 25 or 26, SPX 1740 or thereabouts.  We've already chewed up 80 handles on the SnP, so another 100 from here on this timeline should not be a problem.

After having a nice little run, UVXY is making new all-time lows again in the AH tonight.  If we make 1740 by EOM July, expect to see it halved at least.  Nasty!

Updated the near-term count, as well as longer-term ├╝ber-bearish projections.

SPX 07-08

Wednesday, July 3, 2013

Charts 07-03: Denninger likely still very long BBRY

Here is what passes for dissent and discussion on Karl Denninger's dying message board, TickerForum.

Karl's still writing with a peculiar passion about this dead-end company and stock, and not disclosing a position in or out of it.  I interpret this that he may very well not have been flat through BBRY earnings, but that he simply did not add to his position going in, especially with short-term options plays.

Karl is free to correct me if I am wrong, and I will acknowledge it with the grace and humility you have come to expect from this blog.  

Personally, I think Karl is an unstable flake, and I know I am hardly alone here.  Despite his overall bearish stance, he takes up with companies like RIMM from time to time just to boast about how very clever and knowledgeable he is about these things.  I guess today he is an expert on mobile platforms and marketing.  

Underwater TickerForum'ers, at any time did Karl's incessant advocacy of this company and its stock constitute investment advice?  Have fun with this.

Here in Deflation Land, we also see Karl as an unwashed philistine, one of those repulsive libertarian types who feels he has to operate entirely de novo and without a net, so that, like Ayn Rand, he can eventually praise Aristotle for agreeing with him.  

Long-time TF poster EightySixTheBS (or something like this), an articulate and consistent bear, also drew the banhammer for pointing out in The Bar that he was right, and Karl very wrong, about BBRY.  I hope Karl loses his ass on this company.  

OK, done with that for now, I think I need a shower.  Summer is here, and many fine hikes in the wilderness await.

We are still hanging in this range, and the overhead resistance of the decline since 1687 is sitting right above us, just teasing us to bounce hard off of it.

SPX 07-03