Wednesday, September 3, 2014

Charts 09-01

Favoring the ending-diagonal scenario from early this past weekend.  Bryan's model indicates that we could still have one more high after an initial large drop back to the 200 DMA.  McHugh has some similar ideas in his charts and analysis in his newsletter.  A bounce off the 200 will certainly be a good bounce to ride.

Yesterday's dip did something important -- it went just deep enough to establish a clear trendline between waves 2 and 4 of the larger structure.  SPX 1994 is significant, too, because adding 40 pts to it (wave 1 from 1904 to 1944), gives us 2034 SPX as a target for W5.

Draghi probably disappoints tomorrow, but not enough to crash the markets just yet.  The conventional market wisdom from the financial media will then shift to ask what the Fed has to say in two weeks.  

SPX 09-01

Can VIX droop down to the low 10s?  This would be an awful 2 weeks of a market drifting slowly upward in this range.

VIX 09-01


Permabear Doomster said...

Time frame looks good.

Maybe a brief spike of 10/15pts in FOMC week to 2045/50 or so... and then a strong intraday reversal.

Yes..that is something I will be VERY mindful of in FOMC/opex week.

Still..the bears are going to need a real catalyst in Q4 to break the primary trend. There will be a total lack of QE fuel of course.

Christian Gustafson said...

Hehe, the megaphone may be in play after all.

We have to visit the 200 DMA SPX at some point. Let's see what happens after that.

pb said...

Christian - you propose a drop to the 200 dma then a retest or new high into October before the massive rug pull /
as Mr. Burns of the Simpsons would say

Bryan Franco said...

All aboard!

Christian Gustafson said...

Yeah, pb, I think that would be just tits.

NDX and RUT have visited their 200s recently, DJIA not too long before that. SPX is still hanging out there.

Let's see if /ES rolls over tonight. It's OK for us to gap down here on the theory that we will fill it.

Christian Gustafson said...

By the way, I don't want to get too far ahead of this until we get some confirmation here, but the final top target would be up around 2030. First let's see some bloodletting here.

This drop needs to be a short, sharp version of July-Aug 2007.