Sunday, March 2, 2014

Charts 03-02: Quick post on /ES

The overnight /ES futures are sitting right on critical support from the proposed (terminal) ending-diagonal that began on February 13th.  The drop halted tonight precisely in the same place that the SPX  roaching did during RTH on Friday.

/ES 03-02

Once this breaks down, I would look for it to build out a larger impulsive move back to the 1740 SPX area, followed by a strong bounce into March opex on expectations that Yellen will table the taper.

When the March FOMC announces the next $10B cut in QE, well then it really gets exciting, doesn't it?

First we need to see these ending-diagonals break on the chart, both on the /ES and the SPX.


T.Berry said...

cg, is the call for 1646 in march now off?

Christian Gustafson said...

That's pushed out to early April -- say, bottoming around SPX 1623 before the April Full Moon -- to complete 1 of A down.

2nd half of April retraces that move in wave 2.

April 30th FOMC brings a GDP number and the next QE taper announcement.

I'll post a sketch of this idea tonight. It's based on the early waves down in 2007-2008.

Permabear Doomster said...

CG, you're still calling for imminent doom, whilst the primary trend remains strongly bullish.

I agree with the low 1600s, but not in April, that is simply not feasible.

Actually, beat case for the bears is 1750/25 by late April.....and then a bounce.

Just look at this morning....indexes are lower, but not by much.

The daily charts are clear F flags...bullish into the sp'1900s.

Christian Gustafson said...

I'm not calling for doom just yet -- I'm calling for a 5-wave A down through July, which will attack the various support levels on the chart.

2008 was an ABC down -- NOT the 5-wave impulse every dopey vanilla Elliott waver out there counts.

The DJIA and transports never confirmed the last high on SPX, and we have now broken down out of an ending-diagonal pattern on both the SPX and /ES.

The purpose of "A" down is to break down chart support. The summer rally "B" is a hopium bounce off of that, similar to the 2007-2008 tape.

Just as in 2008, the real doom follows with "C", and it should be splendid, giving us SPX 560 next July.

T.Berry said...

thank you cg. i've raised position to 60% cash and will patiently wait to pounce on the upcoming trip to 1623.

Permabear Doomster said...

re: ''Just as in 2008, the real doom follows with "C", and it should be splendid, giving us SPX 560 next July. '

That is crazy talk.

We are still broadly breaking new highs, and you're still calling for a collapse wave even stronger than 2008/09.

What about world capital flows?

What about the current interest rate cycle, which would suggest broader upside at least for another 18/24mths?

What about the fact that the fed are still throwing 65bn a month at the US capital markets?

Sorry, but I am seeing the same nonsense talk that I've seen since summer 2010 when people were touting sp'400 for summer 2011/12...

That never came...and we're now 70% higher.

Permabear Doomster said...

Am I being overly harsh?

I mean, we get one down day..or even few weeks..and many are proclaiming 'here it comes', as even Denniger likes to quote (with a video of Star trek' 2, lol).

Yet...monthly trend is still higher.

No doubt we're going to top out this spring, but..from where then?

That won't be grand top, in which case, why are you looking for much lower levels into next year?

Rather than sp'600s...we could be 2600s!

Bryan Franco said...

Good G-D. Strength where weakness was expected. Must be respected? Looking forward to the next update CG. The good news is that all new all-time highs from here are 'eligible' tops based on the drawdown study, but the key question is from where?

pb said...

This Market's yearly rally is based on QE - nothing more and it's gradually being reduced until it is stopped by year end. This Market, as we have seen in the past, is doomed without QE - the economy sucks and it is not the weather's fault. Maybe they will taper the taper - who knows - but until they do it's a matter of time before it rolls over.

Bicycle said...

The market's rally is based on US oil production growth. They couldn't have QE'd without that. They couldn't have bailed out a thing without that.

It's equally absurd to assert that we will not retest the 2009 lows. They will surely be broken, but not for a few years yet.

After more consolidation this year there is broad upside to 2250 through 2015. Several momos will double/triple in that final rally.

But it stops there.

Asset purchases are winding down now not because of a magic employment target, but because they know US oil production growth is slowing. They know the economy has to shift towards conservation, from consumption.

They will raise rates in 2015/16 for the same reason--conservation becomes more important than consumption. Broad downside to S&P 400s or possibly 210 because of this.

Energy shortfall = forced conservation = savings rewarded over consumption = rate increases from central banks.

Permabear Doomster said...

savings rewarded over consumption

Now that would be a surprise.

Why would the Fed EVER support that?

The system is broken, too many underlying econ-problems. Savings can NOT be enticed.

Not that I agree with that sentiment, I'm just saying what the Fed won't permit.