Monday, February 9, 2015

Charts 02-09: Stretching things out

I don't feel any sense of urgency at this juncture, certainly not to put on any shorts just yet.  Wednesday has a Bradley turn date on the classic model that may time well with a bottom; I'll consider taking a small long with February calls on it.  A little dash of Euro-hope and some fresh USD-JPY carnage can still power us to new highs.

SPX 02-09 60D

I still think that any Elliott count considering 2093 as the final high and the start of a "wave 1" impulse down is foolish and defective.  The awful blogger Daneric continues to push this count, because his analysis is lazy and sloppy and ultimately deceptive and fatal to his readers.  He may actually be some sort of market shill selling puts to the permabears, I dunno.  How are those SPY 195 puts working out for you guys, huh?  Wave 3 down any day now ...

Stretching the larger 3PDH model out a bit across 2015, with a final low at our point #10 target at 1074 SPX in November, which works on so many levels.  The specific turns in this chart are mostly Bradley turn dates based on the classic model.  The largest leg, the crash leg back to 1074 SPX, lands squarely in the Fall crash season. 

SPX 02-09 3PDH model

This entire move back to 1074 SPX counts as "A", with a big bounce "B" into early 2016 and a final destructive "C" to wrap it all up.  We have established important levels of support at 1972, 1820, and 1560 SPX.  This model has us reaching each level and bouncing just enough to kissback the previous channel or support trendline.  Once we get a final high with that Bollinger Band touch and all of the other good stuff, I plan to trade this model both short and long.

Looking for a final high around February opex.  Gotta eat the last of the puts and run the VIX down a bit more.

One more thing.  Speculating about when the Fed will start hiking rates (June FOMC?), has us inevitably looking at the 13-week T-bill for any clues.  The Fed follows the market, right?

If we look at a very long-term Yahoo! chart of ^IRX, we see that it has been flatlined throughout the whole ZIRP experiment, but that RSI has been very slowly building over time.  So what will happen if the RSI for ^IRX breaks out over .5?  Will this see a breakout spike in short-term rates, and a commensurate move by our Fed masters?  I think so.

13-week Treasury Bill

26 comments:

Christian Gustafson said...

Now imagine how much fun it will be to have "C" down off this play out during the 2016 election season!

Hint -- you should already be nestled in a secure location by this time, with plenty of WA red wine, some good books to read, two dozen geese, and a score or two of whole prosciutto hams.

Phat Repat said...

I like it!

Current trend is weakly down and I could see a move back to the 2040'ish/2020 area to close gap(s) before charging higher. Technically, prior short targets of 1964.17 and 1950.96 were not reached so, as an extreme, that could happen; though hard for me to digest on this run.

A secure location? I suppose that depends on the caliber and the people around you. ;-)

Bicycle said...

I found a new triangle of doom...

Christian Gustafson said...

This weekend I re-upped with Bob McHugh's newsletter to see what is on his mind, and I am glad that I did.

I think he's worth looking at again now; I like his outlook and his general timeline on this.

One thing Dr. McHugh provided in his longer weekend newsletter is a very long-term chart of oil, where he puts us in an even larger triangle than the comparatively teeny one Steve Ludlum has owned so well.

I wish I could repost it, but it's not my chart. Pull up a long-term chart (20+ years) of /CL and see if you see it, too.

The back and forth of crude oil prices will lay waste to whatever productive elements remain in the wider economy.

And /CL is in a triangle ... so ... continuation ... meaning at some point in the coming years we will see extreme shortages of the stuff.

Glad I got back in touch with my inner McHugh.

Bicycle said...

Do you mean this?

Christian Gustafson said...

Something like that, yes, but larger and with a final resolution upward.

That's likely the final $USD crisis into the hyperinflations.

What's going on with all of the weird reblogging? You got a new angle?

Bicycle said...

I don't think so, that just looks like some reblog spam. Take note, however. When our economy crumbles into nothing like the Russia, we'll all become spammers like this, hawking sites for penny-clicks to try and make enough money for bicycle tubes and gruel...

Phat Repat said...

Yep, and of course, being the reserve currency, we don't have anything else to fall back on. Truly a significant amount of pain to be meted out, but, given the utter destruction of our social landscape, this may not be such a bad thing (assuming one can survive it). ;-)

Looking at current action, I would be happy with a move to 2020 followed by snap-back Wednesday. Tick Tock.

Bicycle said...

Still not seeing it on the monthlies for WTI, unless he is claiming that it's a massive descending triangle. If it's a pennant then we've already broken under it except for perhaps a quarterly basis.

Christian Gustafson said...

You guys want a peak at the sort of stuff we'll see in the End-Times?

Look at the mess they have made of the ol' burning-coal-to-boil-water process in the South Africa.

Not looking good.

Christian Gustafson said...

sp. "peek" not "peak" ...

Phat Repat said...

Things certainly could spin out of control, but I prefer to consider this a transition period which most Americans are ill-equipped to comprehend let alone deal with.

And that's where the casualties will come from; those who are mentally fragile will succumb by not being able to deal with the new reality. Out of necessity, we will return to a meritocracy with limited Government. On the flip side, if that's not possible, then the US will suffer several generations of harsh winter before spring finally returns. Either way, life goes on it's just the quality and future opportunities that are in question.

Reverend Nihilism said...

Sounds like you're looking for a return of the bear.

http://www.gifbin.com/986476



T.Berry said...

be careful on shorting side....not that there wont' be opportunities (should see 5% or so correction) but that they may not last long this year.

"There hasn't been a down year in the third year of a presidential term since war-torn 1939, when the Dow Jones Industrials (^DJI) fell 2.9%"

Phat Repat said...

T.Berry; that is quite the trend, but there is always that potential anomaly and things are much different now.

I like the little sideshow that Greece is; uncertainty is a good thing, until it isn't.

T.Berry said...

yeah it's impressive phat. plan to stay long for a while. don't think things will get messy until after next years elections. seems every market moving bad event (here or globally) gets worked out relatively soon. i suppose it works until it doesn't which will signal the time to get out for me.

Bicycle said...

Hmm. A YoY % change chart of the Dow Transports does not look very good for bears.

Phat Repat said...

If we break 2062.5 and hold, I believe we will see 2080'ish rather soon. And the next levels are then 2103.32/2110.99/2115.57.

Tick Tock

T.Berry said...

phat , of course 2110! we have to in order to get to 2350 :)

nice to see mkt finally perk up a bit.too bad feb only has 28 days lol

Phat Repat said...

T.Berry
Well, let's not get too far ahead of ourselves. ;-)

2110 would be a profit taking level for me, though I could consider an extension. I'll stick to that; pigs get fat...

Christian Gustafson said...

Mind the Bollinger, gentlemen!

It is rising, yes.

Phat Repat said...

CG

Familiar with but not a tool I use, please expound.

Christian Gustafson said...

My short-term thesis for over a month now is that 2093 was unlikely to be a final high because it did not penetrate the upper Bollinger Band on the SPX.

All important prior tops did this.

It would also help to see VIX and the vol ETFs make new lows through their lower bands. A close back within the band then sets up a "buy" signal on them, i.e. VIX buy means an index SELL.

Phat Repat said...

Thanks CG.

Christian Gustafson said...

Ja, I want to see indices overbought, volatility oversold, maybe some divergence on the A/D line and the McClellan, oh, and McHugh has one of his "phi mate" turns coming up as well. Maybe this time is different.

Bicycle said...

If you believe in the astronomy stuffs having weird coincidences with turn dates then you'll want to check out the current solar prominence...

Maybe if we finally get that bear market we've all being talking about I'll be able to splurge on an H-Alpha filter for my scope... the white light filters just don't cut it for stuff like this.