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

6 comments:

Permabear Doomster said...
This comment has been removed by the author.
Permabear Doomster said...

QE will continue...forever.

Why do you still believe the market will EVER broadly fall..EVER again?

The bears were rampently bearish about the 1550/75 area, now we're 100pts above that area..and we're STILL in denial of what is happening.

Give it up. Bernanke won.

--

FOUR years..and the bears still have not learnt anything.

Bryan Franco said...

The close today makes any price point from here on out an eligible long term top... a necessary, but not sufficient condition by my work. This is based on the pattern of 3-5% and 5% + declines that have preceded all long term tops in the past. The problem is, I have no idea how high we go, just that the ensuing decline should result in a peak-trough decline in excess of 20%.

Christian Gustafson said...

From the proposed 1740 SPX top, 1330 for "A" down would be both a 23.6% decline in absolute terms, as well as a .382 retrace of the rally from the 666 low.

How does Christmas, 2013, sound to you? I could unwrap that.

Crashes are ABC moves. On this timeline, a year from now we'll be in the depths of 3 of 3 of C.

Bryan Franco said...

CG - So I co-manage a long/short fund. Our investors are throwing eggs at us, wondering why they ever allocated money to something that is supposed to offer them downside protection. I wish I could speed up your timeline! Get them off of our back please!

Christian Gustafson said...

One strategy is to bet 1/2 of the fund on weekly SPY options, calls or puts, each week.

Make sure you keep your passport up-to-date, though, and have some cash on-hand.