Wednesday, January 7, 2015

The case of the Bollinger Bulls

A Bollinger Bull isn't especially bullish equities because of the growth or the various recoveries.  No, a Bollinger Bull is bullish here because he knows that all of the significant tops since (the year) 2000 have involved a touch or at least a flirtation with the top daily Bollinger Band on the S&P 500.  It's like the chart still has unfinished business up here, until we can mark it oversold and start selling off in earnest.

If you like what the weeklies and monthlies are doing, that's great, too.  And if you think this whole structure looks a lot like a giant domed-top formation, I would agree with you.

I upgraded my copy of Thomas Hobbes's Leviathan for Christmas this year, with a nice 1940s copy from Oxford Clarendon Press.  I knew a professor who taught at Roosevelt University in Chicago who liked to attend Social Thought seminars, who has a 1st ed of Leviathan.  At the time it was worth some $20K, and he let me hold it briefly.  At any rate, this whole juncture we are at historically has me thinking a lot about modernity and about Hobbes, so I think I'll give him a fresh read.

SPX 01-06


Christian Gustafson said...

BTW, the UVXY hand-grenade ETF did touch its upper daily BB yesterday. Its lower BB is down around $17.

Phat Repat said...

Let's see if this will hold. I'm short and still up on the position, though I would stop out at 2034.70 on confirmation.

A reversal comes at 2047.28.

Aside from your BB observations. Given the jawboning by the Germans and the 'terrorist' attack in France; this 'bounce' is the work of the PPT/FOMC and does not represent reality.

I will make money on this trade, even if stopped out, just as I did with TLT and GLD; but I'm being profit-blocked once too often and it's starting to pi$$ me off. Continued intervention will only compound the end result. And it won't be pretty. ;-)

Christian Gustafson said...

We have a wicked little short-term setup here into Fed minutes, Phat.

If the Fed disappoints, we sell-off to new lows and call this bounce a "4", right?

But if it doesn't, well, we're already up 20+ handles on the day, so do we rally to a +60 day? Something sick and wild like that, with more follow-through tomorrow.

Short-term SPX tape looks very inverse H&S-ish, cup-n-handle-ish.

Or it's not. Nasty inflection point ahead for us.

Bicycle said...

How about this one?

Christian Gustafson said...

Hey, Bicycle!

Looks like you've been picked up and syndicated by McVerry.

You should see that in your referrer traffic stats.


T.Berry said...

call it crazy but we may have '15 bottom in @1992. we bottomed 1st week in '13 so it is possible! will get another 5% correct but at much higher levels.

Bicycle said...

And here I was thinking I was just talking to myself. I guess I should add some analytics code to the page...

Well on our way to our failed 5th this morning...

benjoyce said...

failed 5ths are rare? Why do you think it will fail?

Christian Gustafson said...

Can we get an extreme move today? I'm thinking like 2081 SPX at the close. Total bear capitulation.

Bicycle said...

benjoyce - the count in the current rising wedge will run up against a larger bear pattern (megaphone from early '14) and not exceed its upper bound, causing the wave to fail early in the rising wedge. See chart in my first post in this thread. We'll be at new highs on the Dow at that point and a great place to load the boat.

Christian Gustafson said...

K, now here's where it could get ugly ugly for the bears. The SPX is now over the .618 retrace of the drop, AND the last bearish trendline you could draw from it.

There's nothing but old highs holding us back now.

Today could be an historic, sickening rally.

Phat Repat said...


I'm rooting for you! If that's the case, then tomorrow, with more good/bad news, we could likely hit the target shown on your chart.

Interestingly, my numbers show 2115.57 (cluster) for a target. That would be awesome given my counter position in options would return a nice profit. ;-)

benjoyce said...

Wow. Quite a nosebleed to the upside. I'm glad I bailed on by bearish lower BB touch. Now I can tout an upper BB touch! With the NFProlls out tomorrow why not a green light to 2100 SPX tomorrow!

I've had it with exclusive tech analysis. I think its a deception. Or maybe I should keep my friggin mouth shut until I become a profitable trader.

If we do hit 2100 soon than I'll have a 10 bagger on options. But started out with $350

Christian Gustafson said...

Good work, benjoyce.

Leverage is your friend, until the whole thing blows up in your face.

A touch of the top BB would be sweet. So would 2100 SPX this week.

Christian Gustafson said...

Whew! Unloaded a few passels of SPY calls, this week and next, for a nice profit.

A very very nice week here.

Still holding 50 contracts of Jan wk2 SPY 208 calls for sheer entertainment value for NFP tomorrow.

Heroes or zeroes! They were only 3 cents. Pray for me.

Phat Repat said...


Hope it works out for you. I understand your frustration; given the artificial nature of these markets. However, from my experience, TA is just about the only thing that works in these types of markets.

Beyond that, CG and Bicycle seem to have a very good handle on the markets and appreciate them sharing their perspectives.

T.Berry said...
This comment has been removed by the author.
benjoyce said...

This wage drop really soured the NFP. If they havn't put in a rally by now 10:30 am ....I sold my calls. Signs of deflation continue to surface. Now I learn that wage gains is a much more important factor for inflation than Commodity prices. If wages keep going down than (will a big trigger be the NEXT NFP out in Feb?) a "Crashette" gets going a month from now?

Alcoa earnings On Monday. two articles on Yahoofinance. One is positive the other is negative

Alcoa earning drop big when Al price drops and it has bigtime

I may have to wait for the 1/22 ECB meeting for a boost and then the Fomc late Jan. I'll keep figuring