Wednesday, May 28, 2014

Charts 05-28: 3PDH adjustments, final low 550 SPX

Readers of this blog will recognize this as the moment where I begin to adjust a large proposed pattern, while we really haven't yet confirmed any part of it -- in this case the point #23 high we are looking for next week.

So far, so good on the bond call, though, yes?  I am very pleased to see the "short bonds" crowd getting crucified lately.  HAHA.

The core waves of the big move to point 28, completing the 3PDH pattern, get underway right after Christmas.  A very scary zig-zag gives us a proposed final low of 550 SPX in spring of 2016.

SPX 05-28
Tick tick tick tick tick ....

VIX 05-28
SPX 05-28 5Y
SPX 05-28 10Y

Tuesday, May 27, 2014

Charts 05-27: 3PDH point #23 approaching?

We are pressing north this morning in what looks like another touch of the top wedge trendline at about 1927 SPX on June 3rd.

If that move completes a very bearish ending-diagonal wedge, then the "Three Peaks and a Domed House" model suggests that we look for the neckline for a big head and shoulders that will cement this as a long-term top.  The 1737 low works better for this than the 1814 low.  This would allow us to retrace back up to the critical level of 1850 before rolling over again.

If we don't try to force a fall crash into the current timeline, the 11/20 major Bradley model turn could give us a B-wave high instead of a low.  It certainly looks more proportional per the 3PDH model.

SPX 05-27

VIX is headed for a 10-handle, which is a good thing.

VIX 05-27

Tuesday, May 20, 2014

Charts 05-20: Three Peaks and a Domed House

Presented with a final high (point #23) at SPX 1950 on the July 16 major Bradley turn.

It would be a real doozy.

3PDH 1950 top

Monday, May 19, 2014

Thank you, Wessel & Lieberman

Sad, sad news today as Wessel & Lieberman Booksellers, here in Seattle for 22 years, announced via their customer email list that they are closing down their business and liquidating their stock.

This is a huge loss for bibliophiles in the Pacific Northwest, as Wessel & Lieberman is probably our finest storefront bookshop, a real Seattle institution.  They are especially strong in PNW books, natural history, mountaineering books, and all sorts of 19th Century arcana.

They simply have no lousy books, none at all.  Everything is worth seeing, reading, and owning.

They promise to be open at their store in Pioneer Square through June, so I will make numerous forays over my lunch hour down to see them.  They have a copy of Rousseau's Confessions I need to snag, and definitely a few more, once I sort through the stacks slowly and methodically.

I can't think of any better way to say "thank you" for their very existence, than to post the best I can remember of what I have bought from them over the years.  This list is not complete -- I know I'm overlooking a lot of pulp here.

See them before they are gone ... Thank you so much, Mark Wessel and Michael Lieberman.

Edmund Burke, Conciliation with the Colonies, Allyn & Bacon, 1920  
Robert L. Wood, Trail Country: Olympic National Park
(signed 1st ed), Mountaineers, 1968 
Oswald Spengler, Man and Technics (1st ed), Knopf, 1932 
alberto giacometti, Museum of Modern Art, 1965
Robert L. Wood, Men, Mules and Mountains: Lieutenant O'Neill's 
Olympic Expeditions (signed 1st ed), Mountaineers, 1976
John McPhee, La Place de la Concorde Suisse (1st ed), FSG, 1984
Alan Moorehead, A Late Education (1st US ed), Harper & Row, 1970
Robert L. Wood, Across the Olympic Mountains, the Press Expedition, 1889-90 
(signed 1st ed), Univ. of Washington Press, 1967
Washington Irving, Rip Van Winkle, Lippincott
Ben Franklin, Autobiography, Modern Library, 1944
H. L. Mencken, A Book of Burlesques, Knopf, 1925
H. L. Mencken, Christmas Story (1st ed), Knopf, 1946
George Orwell, Animal Farm (1st US ed), Harcourt Brace & Co, 1946 
M. ClĂ©ry,  A Journal of The Terror, The Folio Society, 1955
William H. McNeill, Hutchins' University: A Memoir of the
University of Chicago, 1929-1950
, Chicago, 1991

Charts 05-19: Anniversary eve

As I noted the other day, tomorrow is the 6-year anniversary of the 1440 "B" wave high on the SPX, which kicked off the "crash season" of the big nasty waves in late 2008.

We have a setup for an early pop and hard reversal, where the SPX would count as a "failed" 5th here for not setting a new high.  We would then reach the 200 DMA in a week or so.

Good luck to all (bears)!

SPX 05-19

Thursday, May 15, 2014

Shaky foundations

Rod posted an ominous photo of the Enchanted Valley Chalet in Olympic National Park, taken by Ben Durrant. 

Enchanted Valley Chalet -- doomed

You can see the effect of the winter storms since I was out there in January.

On a similar note, we have a little VIX breakout today that bears watching (by bears).

VIX uh oh ...

If you subscribe to Bob McHugh's technical newsletter, you know that he had one of his handy phi mate turn dates scheduled for this past Monday, 5/13 -- when we made the high on SPX.  The next few weeks will tell us how significant this high may be.

Wednesday, May 14, 2014

Did anyone notice the Bradley model 2014 dates?

At this point we are just waiting for one more touch of the top line of a larger ending-diagonal wedge, likely right after May opex.  Our target on the SPX remains at 1920 ... patience required here, guys.

With a low tide in the morning, I can do the long walk that takes me from Golden Gardens park in north Seattle all the way up to Carkeek Park further north.  The entire loop back home is maybe 4 or 5 miles, a very nice walk.

Mt. Constance (Olympic Range) over Puget Sound

So we're just waiting for that last tag of the top.  It looks like 5/19 or 5/20 ought to do it.

From there, 1650 and even 1560 are targets for a sharp break south.

SPX 05-13

Work continues on one last batch of skinny townhouses around the corner from me, on the site of the old Crown Hill Lutheran Church.

Chip-board townhouses!

Better buy one now ...

so you aren't

priced out forever!

Reviewing the 2008 crash tape again, I noticed something very strange.  I took Manfred Zimmel's 2014 Bradley model cycle turn dates and applied them to the 2008 chart -- see the orange lines.

2008 crash tape with 2014 Bradley cycle turn overlay

Now Bradleys are dodgy astro-market stuff and may not be your cup of tea, that's fine.  However, they have been spot-on with the current tape for a while now, nailing some very important turns.

And for some odd reason, the 2014 Bradleys absolutely nail some key turns from 2008.  We have to be careful not to conclude too much from this, but for now I want to suggest that the order of the downlegs in the upcoming cycle may be reversed.

In 2007, we topped in the fall, and put in a 5-wave stair-step "A" down.  "B" corrected this, and we topped again on Monday, May 19, right after opex.  By the way, there is another Monday, May 19, coming up next week, right after opex.  The truly vicious, destructive cycle began off this May high at 1440 SPX.  The seasonality is such that we are lined up again for another fall crash.

This is how I am suggesting the ABC down to the lower edge of the Jaws of Death megaphone would look, with the crash coming first this time around:

Jaws of Death completion to SPX 560

From a 1920 high, the "E" wave of the megaphone would be about 1.5x the magnitude of the 2007-2009 cycle, which was 910 pts on the SPX.

Of course, any good walk in the north end of Seattle requires a stop at Caffe Fiore on 85th Street.

Caffe Fiore

Friday, May 2, 2014

Charts 05-02 a.m.: Miscellany

Just a few spare ideas I'm kicking around.

The first is, the market is so jacked-up here that we actually could have TWO 2008-style episodes ahead of us.  I had sketched out yesterday how a Fall 2014 could break down a few chart supports and return us to the starting point of SPX 1040 this fall.  The magnitude of such a move is comparable to the entire 2008 cycle.

After the crash, we still have time and room to retrace and crash again!  Maybe a giant zig-zag to finish the Jaws of Death:

SPX twin-crashes concept car

OX finally fixed their historical DJIA chart data, so I can now do a long-term log chart of the Jaws of Death, like so.

DJIA Jaws of Death, log scale

Remember, each leg of this monster is a three-wave sequence.  In Bulkowski we trust!

Here's the VIX, a few trendlines pointing to 5/20 and a sub-12 VIX.

VIX daily

That's it.  I'll post some bubble RE pix over the weekend.  While I was away in the Arizona, I think I may have found this cycle's Queen Creek.  No, really.

Thursday, May 1, 2014

Fall 2014 crash scenario

I want to sketch this out and post it now in order to avoid the rush.  No guts no glory, ladies!

It combines a number of irresponsible, entirely speculative ideas:

1. We are still completing an ending-diagonal, a terminal pattern, that began at the SPX 1646 lows.

2. Upon completion of the E-D, the first natural target is to retrace the entire thing, returning to 1646, very possibly with lows into the 7/16 Bradley turn date, chopping through some chart supports along the way, for "a" down.

3. The 9/17 FOMC is situated right at the 50% retrace of this drop, and a kissback to a critical bull trendline up from the 2011 lows.

4. The Fed will raise short-term rates at the 9/17 FOMC, either to follow market short-term rates, or to shore up the ailing $USD (it has been selling off with the market, very bad!).

5. We crash, with "c" down a rough 2.618x multiple of "a", reaching the projection of "a" on or around the 11/20 Bradley turn.  This date also corresponds to the spike lows of the scary days of 2008.

6. This will complete a larger "A" wave down.  At ~880 pts on the SPX, this is only 30 handles off from the entire 2008 crash cycle.  An even deeper dive to SPX 1010 would actually equal the entire 2008 crash.

7. The market will stabilize for a few months for "B" up, probably retracing to test the 200 DMA from underneath.

8. "C" down begins in 2015, reaching the trendline of the 2002-2009 lows, in the neighborhood of SPX 560.  It will be a 5-wave impulse.

9. A crisis and collapse in U.S. Treasurys and the $USD will follow the completion of the "C" wave down.

10. This will complete the historical period of the 20th Century and usher in a new, uncertain, and very dangerous phase of History.

For now, let's just show the structure of the proposed "A" leg down and Fall crash.  Lots of notes on the chart.  Have a nice day!

SPX "A" down Fall 2014 market crash scenario