Thursday, December 18, 2014

How this all ends

Assuming we don't blow through overhead resistance and head for the stars, I'm still willing to entertain equity market-apocalypse here.  Keep an eye out for the 12/26 Bradley turn, could be a real doozy.

My SPY calls are up 300% so far, but I think they can be true 30-baggers.  Will let them ride.

Merry Christmas, enjoy the rally.

when the S&P finally dies

43 comments:

Christian Gustafson said...

I love the idea of everyone front-running the actual rate hike by the Fed (and then they do it!)

Not a huge hike, just one to keep face, maybe 50 bips.

Permabear Doomster said...

With respect, you need to go take a few economics classes.

Higher rates are BULLISH.. especially for financial sector.

With lower oil prices due for the entireity of 2015.. the market is set for massively higher levels.
-

At least you are making some $ on long-index.

Christian Gustafson said...

OMG

T.Berry said...

wtg on those calls cg! stocks finally getting the decoupling from oil. cheap oil should be a strong driver for us growth in '15. the number of jobs lost in the oil patch will be made up in other industries which will benefit from cheap oil and there are plenty. still 100% long and still see no reason to sell anytime in foreseeable future.

Christian Gustafson said...

Thanks, T.Berry. The calls just went ITM, and are 10-baggers so far.

With 1955 out of the way, this has further to go, and they will be 30-40x baggers if we reach my 2105 SPX target on Christmas Eve.

After that ... we will see. That channel wall up there on my long-term chart may be the line-in-the-sand for the bearish case.

I'm just a perma-bear who knows when to buy the dip. I did this in October with nickel-calls, too.

T.Berry said...

buying dips has worked pretty darn well (as in every time) over past 6 years. someday it won't but that day is a ways a way and almost impossible to call. multi-year secular bull mkts can last up 20+ years

Bryan Franco said...

WTG CG... i have never had anything remotely close to a 10-bagger in such a short time frame. Then again, I don't do options. But that was great instinct.

Phat Repat said...

Great job CG. I got stopped out and reversed though the volatility is brutal. ;-)

Unfortunately, my system would never provide returns like that since it is highly conservative. But then again, I also don't have any significant drawdowns which is good for my psyche. :-)

Christian Gustafson said...

DecWk4 SPY 207 calls: in @ .10, out @ 1.02

Exited the position when we rammed the channel wall just now. With quad-witch and a weekend ahead, I don't need to hold these any longer.

I may re-enter if we get the wave (iv) per the chart link above.

Thanks, Janet!

Christian Gustafson said...

Update: the calls are already .89/.91. Sweet.

Bicycle said...

Check out these charts of crude in gold terms...

So much better to see these triangle and wedge bull patterns resolve correctly on these charts than the broken crude pennants on the currency charts...

Bicycle said...

Crude oil price in USD vs. Crude oil price in RUB

Bicycle said...

Crude Oil Price in RUB vs. Gold Price in RUB

hnnngggggg... do you see what happens larry

Bicycle said...

S&P 500 vs. Gold / Brent Crude Oil Price Ratio

ZOMG

benjoyce said...

Hello Consistant with the huge wave down is a prophecy from the Blessed Virgin Mary. see below. This comes from Mons. Esseff who is the spiritual director of Sr. Teresa of Calcutta's Order and sister T. herself. A very good source.

In 2015 "the economic structures collapse."

let me know what you think

ben

http://www.locutions.org/2014/12/1-the-crisis-of-2015/

http://www.locutions.org/category/the-year-ahead/

Bicycle said...

Lots of people calling for a new beginning. And I will resolutely call for the end.

Christian Gustafson said...

Yessir, Mr. Bicycle. There's that pesky 200DMA showing up on your RADAR once again.

Patiently waiting again, dry powder at the ready.

Bicycle said...

I really can't wait for the bulls to get the beat down at 17500 after we bounce off the 200 again.

T.Berry said...

wow 5% gdp---fed likely to raise sooner than later or us econ may begin to overheat. given the econ strength mkts may actually rally on a hike. my 2300ish for snp in '15 could end up being very conservative. gl & happy holidays to all

Bicycle said...

Short on xmas eve and walk away??

I can't believe how perfectly this is setting up!!!

Christian Gustafson said...

Little channel on the SPX chart points to 2100 by about that timeframe, yes.

Grr, I wish the OX charts would handle trading holidays properly in advance. It shows them as market days until they have passed.

The top SPX daily Bollinger is way up there as 2113; seems impossibly out of reach.

Wondering if the Greece situation and the Future of the Europe may liven things up next week.

Bradley turn date this Friday.

Phat Repat said...

Happy Holidays all.

Bicycle
Wish it were that easy!

CG
The US has far greater problems than the EU. Though anything could happen, I worry more about our union (or the lack thereof). ;-)

The target for this run is 2094.46 with the next cluster forming at 2193.35. Would be happy with some more downside after the first target. :-)

Christian Gustafson said...

Counting from the 1972 low, wave 1 is 40 handles.

Add 40 to 2070 for 2110 SPX final target high here? Up near our treasured daily Bollinger Band.

Can we make it this week? I'm out of my longs, looking for the southbound entry.

T.Berry said...

big round numbers like 18000 usually don't seem to hold on 1st attempt,,,impressive day for sure. for average investors psyche 18k much more important than 2100 snp. 20k should put up more resistance next year.

overall dec has been less than impressive so far----snp up <1% on just 15 points. only plus is another new ath hit and still a few day left

Christian Gustafson said...

Short on Christmas Eve, Bicycle? Maybe, sure, but be careful here.

The upper Bollinger on the daily SPX is waaay up at 2115 this morning. It's highly unlikely that we tag it.

IMHO we need to touch it or come within a couple of points of it. Review the S&P tape, look at the significant tops. We're just not there.

Likewise, the vol ETFs are nowhere near there lower BBs. UVXY should be bombed out around new all-time lows for a significant top.

Best guess from here is, pullback, sure, but more time on the clock. Maybe something like this into a rate hike January FOMC.

We need to see this market overbought and hanging there like a mildewy pinata.

Christian Gustafson said...

Here are some retrace levels. You can also see that we are out of the old channel from the 1872 low.

Christian Gustafson said...

We could get up there into EOY as well.

Or 2070 SPX was "wave (iv)" on the short-term count, and we have a 40-handle (v) left to go to get us here.

Just can't / won't put on any short positions in the absence of an overbought signal from the Bollinger Bands -- daily and probably weekly.

Phat Repat said...

CG
If that hike were to materialize, would one expect TLT to decrease in price? At least for the initial hike.

Currently have TLT short with 118.40 target. Should have solid reversal thereafter to fill prior gaps.

Christian Gustafson said...

Nah, my hike idea makes no sense. They just told us it would be April at the earliest, OK.

I just got excited re the 5% GDP print this week.

Hanging in here ... nothing interesting until next week, need to get nice & overbought again.

Until then ... drift ...

saahilcap said...

UVXY's positive divergence and relative strength vs SPX could be an extremely bearish "tell" imo

Phat Repat said...

Okay, doesn't seem possible to me either but stranger things...

Yeah, nothing much going on except perhaps the PM markets. GLD on a short down to the 108.66 level with current stops at the 113.96 level. IF that hits, will look to pick up more phys. And thanks for the gift. ;-)

Christian Gustafson said...

Agreed re UVXY. Its lower BB could also rise a bit to meet it in the 18s.

There's a short-term count on the SPX that puts 2110 within reach. Mebbe we drift up there on vapors into EOY.

Bicycle said...

And ma in her kerchief, and I in my cap, had just settled down for a long winter's nap...

When out on the lawn there arose such a clatter... I sprang out of bed to see what was the matter...


I didn't pay any attention to the "market" today, but maybe I should have...

Not a terrible place to go short, especially if you jumped in before that closing dump...

Hope that Bradley turn doesn't gap us down Friday morn'.

Count your blessings, bulls.

pb said...

Great Chart Bicycle but this Market has been relentless - I guess we'll know pretty soon what's going to happen - the corrupt fed has juiced these markets so much - I'm starting to beome a Bull - Maybe that's the sign of a reversal-let's hope so

benjoyce said...

How come no one mentions oil? The oil chart does not look like a bottom. It's forming a shelf and then falls of the edge- down.

If this Brad. turn date works for the downside. Oil will be seen a the canary in the coal mine, JNK too.

http://www.caseyresearch.com/articles/make-no-mistake-the-oil-slump-is-going-to-hurt-the-us-too

benjoyce said...

BTW, that article sited above says, if oil goes down to 40$, then we will see another 2008 meltdown.

Phat Repat said...

Well, GLD as a short obviously got blown out. Flag on the 5-minute points to about 116.85. We'll see. And if that goes, expect move to about 119.36.

TLT still on short for now. Target 118.40.

SPX still up, for now with target to 2094.47. Next target would be 2124.68; though lower confidence in that one. ;-)

Phat Repat said...

Too much holiday cheer around here? ;-)

So far Bradley turn seems to be a fizzle?

And of course, TLT reversed to long with target of 130.53.

Is this not the goofiest of markets lately? Of course we're aware of all the shenanigans with the FED and the holidays aside; it's getting to the point where nothing is as it seems and the constant reliance on the dribble from the FED is becoming tiresome and somewhat nauseating. Having been in this game for a while, I can't remember such influence being played out since the Tech bubble (where all this likely started). Am I off?

Wish a Happy New Year to all and hope we can get back to some semblance of normality. ;-)

Christian Gustafson said...

SPX upper Bollinger waaay up at 2123 today. For a useful top & trade, it needs to come in, we need to go and get it, or a little of both. More boring again.

benjoyce said...

But the snp is down today so far. Some talk about USD/JPY is down so lets watch Japan for a drop.

Reminds me of the Herman's Hermit song. "I think I'm into something good"

https://www.youtube.com/watch?v=FFvXvfUF-Co

Oil storage on the plate Wed, ?could oil tank continue?

Phat Repat said...

In order for me to enter on the downside, I would need to see the following:

Sell below 2066.92. So, not gonna happen. ;-) Of course, with that proclamation...

Buy above 2101.27 with target of 2198.89 (cluster).

Permabear Doomster said...

CG... and others....

I'm still taking submissions for end 2015 'best guesses'.

see: http://permabeardoomster.blogspot.co.uk/2014/12/submit-your-target-for-end-2015.html

--
Regardless... good wishes for 2015

Phat Repat said...

PBD

I'll take a (hyper?)inflated target of 3100 on the SPX.

I have a short on the SPX from 2054.82, Stop at 2090.96 and T1 of 1964.17 (cluster).