Friday, October 3, 2014

A chart for Mr. Bicycle

How about they run this thing straight up to SPX 2030 into mid-next week?

Shorts will be scattered about like Varro's legions at Cannae.  And [only?] after that, big red candles, finally a real impulsive [scary] decline.

The blow-off megaphone leg scenario

Megaphones on several different scales, a larger diamond-top pattern, etc.


Bryan Franco said...

That's the one! And remember, the January and first 5-day of year effect are still in play. Statistically significant probability of a down year based on those two timeframes being down. In fact, there is an 8% spread in the full-year return based on first 5 days net down, and January down, as compared to neither happening. The standard deviation around that spread is also much smaller than the standard deviation of the market itself.

Christian Gustafson said...

Yeah, the timing on this chart would have us start selling off HARD on the Bradley turn date 12/26.

It starts off as "EOY profit-taking", right? Only it doesn't stop. It keeps going the entire month of January, only finding a bottom at SPX 1560 into the January FOMC.

The Fed would hold rates steady to avoid a market crash.

When they raise them at the next FOMC March 18, we get the last leg back down to SPX 1074, the old point #10 on the big big 3PDH.

That's what this chart "means".

Phat Repat said...

Very interesting chart. Current numbers are 1960.62/1963.80. If they are breached and held then short will be stopped out and will need a value above 1973.27 to reverse position. Target 1 for long would be 2045.06. Can they do it? ;-)

Christian Gustafson said...

To reach 2030 SPX in a week, it's such an extreme move from here, that I believe it would scare even the market bulls to death.

I think they would recognize the danger it represents.

Bicycle said...

I like this chart very much! Very interesting to note that your key turns are 1) right around turkey day / black friday and 2) right after the xmas season. I can't wait for Howard Davidowitz to come out of his cave again and calling for the end of retail civilization live on TV.

I hope that the hot items under the tree this year are not CDC approved gear and other prep supplies, that would be awful. Christian, you need to start blogging about your library again, if I have to pull the kids out of school and home school them for 18 months, my own library needs some work!

Phat Repat said...

Still about 60/70 points from here so, unless it's a moonshot, a nice short-term play. I'll take it.

Christian Gustafson said...

You're right -- a book post might be a good idea about now.

I picked up one last gem from Wessel & Lieberman's closing sale here in Seattle. A real gem.

And I haven't yet told my story of meeting (yet another) real live feline cougar on the trail last weekend, and my experiences picking alpine blueberries with a family of ptarmigan.

I'll get on it.

Bicycle said...

Hey, did you know what else happens in history on October 8?

1871 - Start of the Great Chicago Fire
1941 – World War II: In their invasion of the Soviet Union, Germany reaches the Sea of Azov with the capture of Mariupol. (I bet Vladimir Putin knows his history here...)
1967 – Guerrilla leader Che Guevara and his men are captured in Bolivia.
1969 – The opening rally of the Days of Rage occurs, organized by the Weather Underground in Chicago, Illinois.
1974 – Franklin National Bank collapses due to fraud and mismanagement; at the time it is the largest bank failure in the history of the United States.
2001 – U.S. President George W. Bush announces the establishment of the Office of Homeland Security.

Bicycle said...

Total Lunar Eclipse Next Week Will Turn the Moon Blood Red

Christian Gustafson said...

12 And I beheld when he had opened the sixth seal, and, lo, there was a great earthquake; and the sun became black as sackcloth of hair, and the moon became as blood;

13 And the stars of heaven fell unto the earth, even as a fig tree casteth her untimely figs, when she is shaken of a mighty wind.

14 And the heaven departed as a scroll when it is rolled together; and every mountain and island were moved out of their places.

15 And the kings of the earth, and the great men, and the rich men, and the chief captains, and the mighty men, and every bondman, and every free man, hid themselves in the dens and in the rocks of the mountains;

16 And said to the mountains and rocks, Fall on us, and hide us from the face of him that sitteth on the throne, and from the wrath of the Lamb:

17 For the great day of his wrath is come; and who shall be able to stand?