Saturday, November 9, 2013

Charts 11-08: Most bearish case possible from this crazy tape

My good friend Matt_Bear suggested that this manic Friday rally was a leg of a triangle.  So even though we have blown a perfectly good key reversal daily candle on the SPX, we still may be setting up for another exhaustion move.

Here's how the triangle here would work:

SPX 11-08 with 4th wave tri

An impulse follows the completion of a symmetrical triangle; I'll propose that it will target 1798, where we will rollover again:

SPX 11-08 6M

You could count these final waves as an ABC from 1560, or as an ending-diagonal that started at 1627, either way -- they both point to 1798.

Which sets up the larger catastrophe, the 2008 tape x about 1.35:

SPX 11-08 5Y

Which looks like this on the really long timeline:

SPX ALL

So the first order of business is to finish the rest of this proposed triangle this week.

4 comments:

Christian Gustafson said...

Of course, you could probably also count Thursday's low as the end of green 4, with Friday's bounce being i of the final green 5. It will need to kill some time if the target is 1798 next Wednesday -- only 28 handles away.

Permabear Doomster said...

I know a few are looking at 1780/90 within the near term..as a top.
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None of that makes any sense though. Why would it stop?

It remains bizarre that we faced a zombie apocalypse..and the market only dropped to sp'1646.

How can people be more bearish now, than last month?
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Only another 4-6 months to wait.

Orhan Onaran said...

Seems it's going to be 1780/1790. We are probably here at the top this week around 1785 in a blow-off - blow-up top. Still looks like a an expanding megaphone topping pattern over the last month on the 60 minute chart. I can see much going wrong in Yellen's testimony, the next govt. stand-off, & these extreme bubble stock prices. There can't be many bears left to cushion the impending collapse? ooo

Orhan Onaran said...

Well, it hit your 1798 (Nice call & charting), a bit early though. Not sure what to make of it?