Sunday, December 7, 2014

Season's Greetings and Bollinger update

Christmas in Deflation Land

It's the holiday season here in the PNW (and probably where you are, too), but the jury is still out whether we have a new bear market on deck.  We got our "one more higher high" per Bryan's model of serial highs going into historical tops, and now we are sitting up at the top of a parabolic move with no significant corrections.  Commodities and shit speculative credit ("high-yield") are in decline, and it's high time for the indexes to take a dive.

Let's take a quick review of where we are with respect to the Bollinger Bands on the various indexes.  At the moment, the S&P 500 is our lone holdout -- its upper BB was at 2084 SPX on Friday.  A few comments on the charts.

SPX
DJIA
NDX
RUT
VIX

Blog regular and upright Illinois citizen Bicycle has been engaging heavily in fantasy bearishness lately, drawing trendlines to zero and other such nonsense.  OK, I'll play. 

Here's my take on the chart to OMG zero which includes my interpretation of Martin Armstrong's 2015.75 date for style points as well as shits & giggles.  Also, it's got fibs!  Eat that, Bicycle.

SPX chart to ZERO (hint: your brokerage is broke)

36 comments:

christiangustafson said...

Yeah. I can get you to 5; after that, you're on your own.

Trading Sunset said...

My gods, Armstrong mentioned on this site (sorry, maybe you've highlighted him before, I can't remember).
--

A collapse of some kind is of course coming, but probably from much higher levels.

Even if you just roughly consider the previous ECM cycle, the market maxed out six months after.

That'd give us spring 2016.
-

Anyway, its a long... and tough year. Many bloggers/sites have left us... I do sincerely hope you ain't going anyway... even if we first hit Dow 25, 30, or 40k
--
back on Monday.

christiangustafson said...

We bears all understand the insane state of things with respect to fundamentals, and that some sort of collapse is ahead. It could start next year or next week, that's the rub.

My outlook is that there is one good bearish cycle left in this that is still tradable before the banks start shutting down and accounts are frozen. After all, we made it down to 666 and the lights are still on.

But it's also quite possible that we just keep running up in a parabolic move to some crazy, unimaginable top, and what results from it is not tradable at all -- it's just all over.

Trading Sunset said...

re: not tradeable at all?

Urghhh.. that is not a good scenario.

re: banks.. I ain't worried about those. It'll be bail ins.... with fed help... if necessary.
--

Equity bulls have little to be worried about until Q4 of next year, if not spring/summer 2016.
--

Bryan Franco said...

Not bearish enough! All in at 5 is sill all-lost at 0

Unknown said...

Bicycle

I don't understand what you mean by target at 5.00

Thanks

christiangustafson said...

Oh, Sarah, I was just joining with Bicycle in charting us all the way down to dust. The bottom of the huge Jaws of Death megaphone is actually in the mid-500s SPX in this timeframe, would make a more logical target.

The larger concern ahead is that trading accounts will have the same status as savings accounts in a bank -- essentially a liability to you, good luck getting at it. So if things fall apart, and you manage to make money along the way, there will be a point where it will make sense to cash out the chips and walk away from the table entirely.

This morning -- 5 wave impulse off the top, looks complete. Now we need a wave (ii) back up that rejects off the pink line that had been support. That will send us to the 1980 SPX area in a hurry.

Permabear Doomster has his eye on the December FOMC. That timeline works well for my first low, a bounce off the 200DMA, roughly SPX 1951.

christiangustafson said...

Just throwing out an idea here, but the most evil short-term count for the bears here would be that the SPX is putting in one. last. megaphone. top. Here, now, as in we still have the "E" leg up left to go.

It would allow us to inch back up to a final high and touch the SPX upper Bollinger, into either the Abe election or FOMC next week.

It would also piss a lot of people off.

Bryan Franco said...

R2k unch. What a joke.

christiangustafson said...

Exactly, Bryan. And look @ the NDX, too. Is that a 5-wave impulse?

We're at a very dangerous time to pile on shorts.

PayDay said...

If savings and brokerage accts are frozen/rehypothecated during a SHTF scenario, can anyone speculate what happens to mortgage/credit card debt?

Is it frozen? Eliminated/wiped in a deflationary bear crash?

Pay off your debt with a few silver coins? What?

Bryan Franco said...

Mini megaphone within larger megaphone would make Mandelbrot happy.

christiangustafson said...

No, Bryan.

Triple megaphone!

That's the title of tonight's post, probably late -- I promised to read with my girls first.

I am well-supplied with beer in the fridge, which will help.

I'll also take up PayDay's question and concerns. Welcome!

Bryan Franco said...

My daughter will be one in January. I wish I could freeze every version of her. She loves the lift-the-flap type books. Things like "Where is Spot", and "Peekaboo Kisses". She also loves "Mother Goose".

Phat Repat said...

Nice little action here in SPX. Interesting observation yesterday; someone purchased calls with a strike of 2100 at 1.05. That's odd given expiration is 9 days away. Questionable print? Hmmm...

Nothing for me to do right now as we coast into OpEx; at least not yet. ;-)

christiangustafson said...

Price is right on those SPX index calls, which are trading 1.05/1.25 this morning. Always a larger spread on these compared to SPY options.

I don't think they will go ITM, but I bet they can be dumped later this week for a profit, which is all that matters.

Pretzel has a pretty good take on the SPX chart today.

Phat Repat said...

Well, anything is possible, though trading at 0.01/0.29 right now so that's gotta hurt. ;-)

christiangustafson said...

?

What's trading .01 / .29?

I've got the December '14 210 SPY call trading at .15/.17, and the SPX 2100 call at 1.1/1.6.

See what I mean by the spread on these SPX options? Those are European-style, too.

Phat Repat said...

Ah, I meant Dec 19, 2014 SPX 210 calls at 0.01/0.27. Quote I'm seeing right now. Doubtful those will go ITM by next Friday. And yes, European style only for me. ;-)

Phat Repat said...

CG, I see where I might have confused the situation. XSP (mini SPX index). My bad.

Phat Repat said...

Okay, now we're talking. Assuming everything stays the way it is, I have the following numbers showing:

Sell/Stop 2043.04/2067.48 T1 1950.96 (cluster)

Buy 2076.89 (nuff said) ;-)

Phat Repat said...
This comment has been removed by the author.
Phat Repat said...

Never mind; losing my mind. ;-)

T.Berry said...

put remaining cash to work. no sense attempting to catch bottom. long term money and sites on 2300+ snp next year.

Bryan Franco said...

Going short on close today. Have to use mutual funds per new compliance policy at my firm.

christiangustafson said...

RSI divergence with each lower low in the series?

TSE said...

The Crash?

Sure any day now.

Except the Shop can't crank out enough of these Transfer Cases.

Trail Worthy Fab.

https://www.facebook.com/pages/TrailWorthyFab/158049994227980

Approximately 80 of these hand crafted (Racine, WI.) Transfer Cases currently exist in the World.

The Markets will run up to at least 2016 - THEN - it will go dark.

christiangustafson said...

TSE --

I don't know what those shiny things of yours do, but they look really cool. Thanks for actually making something here in the America. We'll see you reflected in the Durables number.

This morning -- a bear count should have had us gapping down in a larger wave 3, right?

But we're back inside the Bollingers again and have another shot at the top one on the SPX.

Abe election this weekend, Fed next week. Incredibly, I could see us as high as 2096 SPX going into the FOMC. That's where I've got long-term chart resistance here (yeah, some trendline I drew).

GLTA

christiangustafson said...

Ful-disclosure, I considered shorting on Monday due to UVXY's banging its Bollinger, but I couldn't pull the trigger. Why not?

1. SPX never reached its upper BB

2. No intraday reversal candle

3. Various indexes not in sync

4. Ho-hum appearance for an impulsive wave "count"

It looks like yesterday's Bradley turn was a bottom. I wish I had picked up a small spec long after-hours there, but I missed the entry, and won't chase. I'm more than happy to wait some more for the setup I'm looking for again.

Phat Repat said...

CG
Wish I had seen your post first. But, the system said otherwise and I did pull the trigger (sell futures) and am looking at 2088 as a stop-loss.

Gap up in this case not seen as a positive, but, I won't fight the tape and will stop out at confirmation. One ugly sell by my system, but of course can be negated. ;-)

christiangustafson said...

See, it sucks, because if we had gapped down 20 handles this morning on /CL concerns, everyone + mom would have seen this as the central wave of a 3 down.

The lower Bollingers would have been pushed lower, etc. And I'd be kicking myself for waiting for the SPX upper BB and totally missing the top.

10/16 and 12/10 are Bradley turns that HIT. Next one is 12/26, right after Christmas.

The upper trendline I mentioned earlier (back to 2011 tape) would have us at 2100 into Christmas, if Santa sticks around. Oh my.

christiangustafson said...

Wow.

Just wow.

So ... are we going to roach to the mid-1900s SPX tomorrow?

Phat Repat said...

Okay then, looks like I can maintain my position for another day. Still have a gap to fill lower and then we'll see.

The earlier target at 1950.96 is in play; for the moment. ;-)

christiangustafson said...

Yes, Phat. Yes, it is.

T.Berry said...

oh the cromnibus drama...ssdd yawn, if it doesn't pass we may have to wait till '15 for 2100. a pass and we could hit within days

Phat Repat said...

Sure looking that way. Or we are starting the sell the news cycle? It's early, but futures aren't supportive,but it's early. ;-)