Tuesday, October 7, 2014

In this thread I apologize for making fun of Daneric and his wave count

I took a cheap shot at poor ol' Daneric yesterday, but he gets the last laugh, doesn't he?

What looked like a forced count, another one of those, bear-with-me, it's a leading-diagonal, it's only retraced 98%, it's still a legal wave 2, trust me here ... counts ... well, after all of the broken counts and disappointments of the last 5 years, Daneric just nails it.

The rally -- yes, a wave 4 that retraced almost 70% of its wave 3 on the SPX -- indeed DID stop short of the wave 1 he had counted at 1978, and was thus legal.  And today we got the follow-through.

Well, bully, Daneric!  I only hope that my acknowledgment here doesn't send us to fresh new all-time highs.  Indeed, maybe this count working out (so far) finally confirms a new bear.

I still think we can reach support at the 200 DMA on the SPX this week, if we are in a 5th wave that is set to extend.  The triangle we drew today indicates a wave 4, sure, but we then notice that the wave (i) and (iii) in the series did not extend, so we could see it here in the 5th, with an expected bottom on the Bradley turn Thursday.

SPX 10-07

There is then another Bradley turn next week, which would mark a kissback to an old rally channel and the beginning of the drop to 1737.

19 comments:

Phat Repat said...

Oh, I don't know. That seems a little too predictable. I like Bicycle's view of the Dow. Works for me; let's see if the FOMC will accommodate. ;-)

Numbers so far (still early obviously): Sell below 1934.95 with a stop of 1958.12 while targets remain.

Christian Gustafson said...

We got the new low. Some sort of 5th wave may be in.

200 nowhere in sight, and maybe it doesn't even matter. Look @ the earlier tops, and the 200 was generally something to be sliced through.

Bryan's study-of-tops -- still a big chance of a wild move up again. UVXY did not set new highs on today's low.

Bicycle said...

Just got back in front of a computer. I don't know guys, is this where we are at?

I hate to ignore those pin lows from yesterday morning, though. If I don't ignore them then we're in a much larger descending broadening wedge, and this is going to drag on quite a bit longer.

Phat Repat said...

Not much of a tell so far. Looks like it's gonna be FOMC for resolution. ;-)

Of course, that's just short-term noise, but it has to be respected from a trader's view.

Bicycle said...

And here is our alternate...

Bicycle said...

And remember our larger bearish rising wedge, which means we really can't put in anything lower than our low from today, unless the descending broadening wedge is invalid and we're going to resolve the larger rising wedge.

The low already put in today seems like it should hold. We should keep drifting up our currently little rising wedge today, and resolve that either at EOD or tomorrow morning. But the downmove from that won't last. By the end of the week, we may be rocketing north out of the descending broadening wedge.

Phat Repat said...

Yep, numbers are as follows:

Sell/Stop 1933.59/1956.77

Buy/Stop 1965.69/1942.46

Tick, Tock

Bicycle said...

Holy shit... we either dump back down right here at resistance to stay in the wedge, or we are off to new highs BY THE WEEKEND

Christian Gustafson said...

Did anyone else pick up any lotto calls this morning?

Bicycle said...

There it is.... bullish descending broadening wedge resolving.

New ATH on the Dow possible by the weekend now.

Phat Repat said...

Nope on the lotto calls, but I did take some SPY put profits. Have to stick with the system and that won't allow a buy until 1965.69 (or thereabouts). ;-)

Bicycle said...

Notice the Fed schmeissing is not helping WTI crude...

Phat Repat said...

Yeah, don't like what I see with crude. But they are helping me out with FXE.

Bicycle said...

And if we step back for a bit we see that we have formed an even larger descending broadening wedge since mid-September.

So we can maybe see a little bit of resistance around 17100 or so, or we'll just slice thru it to resolve the wedge and get a new ATH.

This is actually good... any 5th wave failure on the larger rising wedge would probably have to come between 17100 and 17300. If we make it to 17300 we're clearly going to make one more touch of the wedge before crashing.

Truly astonishing. Can we move ~450 Dow points in the next 2 days?

WTI crude still not confirming the Fed's move. We're going to make our final equity top.

Christian Gustafson said...

Yesterday was one of Dr. Bob McHugh's phi mate turn dates.

Tonight is a big blood red moon.

Tomorrow is a Bradley turn date.

And we have another Bradley turn date coming up next week, 10/16.

sooner said...

Seems to me what we saw this afternoon was the bradley turn date.

Bicycle said...

With Columbus Day, the bond market is closed on Monday, but equity markets are open. Maybe we get some kind of bond market dislocation event Tuesday?

13-week and 26-week bills get auctioned on Tuesday.
4-week and 52-week bills are on Wednesday.

30-years are tomorrow, and settle next Wednesday along with the 10years auctioned today.

Bicycle said...

Hey, has anyone been watching the TNX? Look at this horror show...

Phat Repat said...

Interesting view of TNX. I use TLT for trading purposes, and for the moment, it is still showing Bull trend. However, that would be quite a reversal if TNX behaves as you depict. Nice.