Thursday, January 29, 2015

Charts 01-29: Updated 3PDH

My chum Matt_bear has sifted through the tea leaves and thinks that the Fed will raise at the June FOMC meeting instead of April.  "Mid-2015", right?

Matt has a remarkable Rain-man sixth sense about these things, so I never take any of his suggestions lightly. 

In the 3PDH model, the last downleg from point #27 to #28 is moment of panic, horror, and capitulation.  Here's my take on the model if we get our last leg up to 2080 over the next 2 weeks, and if the Fed bumps short-term rates at the June FOMC.

So did 2093 SPX mark point #23?

SPX 3PDH

25 comments:

Bicycle said...

I hope you are right, and we can make it back up there, but I am fast losing faith. I know it is possible to make it there in short order, but it sure looks a long way up there after this brutal earnings season.

Christian Gustafson said...

The key is the Japanese Yen, Bicycle, specifically the argument that it has one. more. low. on the chart here.

That said, with GDP printing PM tomorrow, we do have the potential for an INSANE capitulation day to 1972 SPX tomorrow, where the 200 DMA, the lower SPX BB, and the weekend Bradley turn can lend a hand.

Christian Gustafson said...

Of course we could also see the Fed hike rates in both April and June!

Wouldn't that be a sight.

Bicycle said...

Or the Fed cuts...

Bicycle said...

I don't even know where we are anymore...

Save us, Obi-Wan, you're our only hope.

Christian Gustafson said...

FWIW, here's my short-term chart & count, Bicycle.

This would have tomorrow as a capitulation day on the a.m. GDP print and bad AMZN earnings tonight, closing at the lows, with a Bradley turn and moonbeams/fairy dust over the weekend.

T.Berry said...

seems ms yellen told democrats no increase immediately. i can't imagine they would raise this year nor do i think they will.

T.Berry said...

amzn one word, wow. huge beneficiary of cheap gas. good retailers should have an amazing '15.

between no '15 rate hike and cheap gas, it will be hard to derail the bull anytime in foreseeable future. feel a bit better than 2 weeks ago about S&P 2,400+ this year.

pb said...

Yeah TBERRY those low gas prices and that low interest is really going to help people except you have to have a job to pay for a car and gas and you have to have a job to buy things with interest. That is the big problem.

Christian Gustafson said...

Imagine if GDP comes in hot in the morning and we blow north 53 handles tomorrow, similar to the move we did off the 12/16 low.

And then it ends? Bollingers are tighter across the board, on SPX, vol ETFs, the works.

T.Berry said...

agree pb. u/e at 5.8% still needs to be lower but has been going down for 5+ yrs maybe not fast enough. still most are better off today than 5 years ago. prolonged cheap gas helps everyone except some oil and related co's. overall a net positive to the economy

Phat Repat said...

Quite the miss on GDP, and futures reflect that though still early.

These moves are starting to give me pause as to what the systemic risk might be.

Though Cheap Gas/Oil is welcome for those of us with income/wealth, it is actually detrimental to those without (and the economy in general).

And I'm not so sure the UE# is believable given the constant revisions AFTER publication. Caveat emptor.

Either way, looks like we are setting up for the move CG projected. And by selling OTM calls yesterday, I will take my profits today. ;-)

pb said...

TBERRY the labor statistics are - maybe I'm wrong all smoke and mirrors. About 93,000,000
American, if not more, have left the labor force, never to work again. Some retired, a hell of a lot of them have just given up looking for work. These are the people that you need employed to buy things to keep the economy going not the frigging fed printing money.It's all going to implode at some point. just my view.

Phat Repat said...

Well that was nice. Did not close the position and will wait for Monday to decide next action. System indicates downtrend but not a strong trend at this point.

Looking at TLT, where I can see 1940'ish as T2 (T1 was 1935'ish), either bonds or the market are going to give up the ghost. Question is, which one? Or both as the nightmare scenario? ;-)

Phat Repat said...

Whoops, 135'ish and 140'ish. Not sure how the 9 got in there. Sheesh.

Reverend Nihilism said...

Is anyone watching the BPSPX? It's reading a low for today of 4.71, is this a mistake?

Christian Gustafson said...

Well, I dunno, Reverend. I was kinda hoping we might tag the 200 DMA @ SPX 1975 before heading up for a final lower-high here in the 2080 area.

We still could visit 1975 SPX. Look all the way back to the 2011 top, how we touched the 200 DMA twice before rising for a lower high and a violent aftermath.

Here's a site for you, good Reverend.

As a former student of the Allan Bloom, I know that our problems aren't so much with credit ponzis and the long-term credit cycle, as they are with modern relativism and its ultimate result, outright nihilism.

There are solutions for this.

Phat Repat said...

Jumped out, perhaps early, but took my profit on the calls.

Not sure if anyone follows Dennis Gartman, but he appears to be about the best contrarian indicator out there; and he indicated a bearish view of the S&P. Sayonara.

Reverend Nihilism said...

Here is something for you CG.

http://en.wikipedia.org/wiki/Peter_Wessel_Zapffe



Christian Gustafson said...

Thank you, Reverend!

I am always interested in those of us out on the dark Continental side of Western philosophy. Schopenhauer, Nietzsche, Spengler, and I do put Leo Strauss in that camp as well as essentially a Nietzschean.

English translations of his works may prove to be tricky, but I will poke around for them.

My children are technically 1/4 Norwegian, which we enjoy because we live on the north end of Seattle, the historically Scandinavian areas -- which are all overrun today with tech yuppies. The squareheads have been routed from their nests.

We do fly the Norwegian flag on the doorstep of our house.

Phat Repat said...

People are funny about labelism.

Reverend Nihilism said...

I doubt that the lack of English translations of his major work is an accident. That's just me being conspiratorial though. Probably the most thorough look at his work is in the horror writer Thomas Ligotti's non-fiction book, The Conspiracy against the Human Race.

http://www.amazon.com/Conspiracy-against-Human-Race-Contrivance/dp/0984480277/ref=sr_1_1?s=books&ie=UTF8&qid=1422896104&sr=1-1&keywords=thomas+ligotti+the+conspiracy+against+the+human+race

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

CG, et al

For the coming OpEx, do you know the max pain level for calls/puts?

Bicycle said...

How about this?