Monday, March 30, 2015

How high can we get this week? Triangle count proposed.

There's a Bradley turn coming up at the end of the week, into Passover, and the big question in the short-term is where we will be on the chart when we reach it.

New highs, with a solid slap of the daily and weekly SPX Bollingers?  That would be great.

But if we don't make it quite that high, if we clear 2100 this week but without new highs, then there's a triangle count that may work as well.  It would eat up some more time as the market loiters up here until the 4/27 turn date and the April FOMC, like so:

SPX daily with triangle count

The rationale would be that the market will continue to call the Fed's bluff until it is forced to hike short-term rates to earn back respect.  It would force Yellen's hand by pegging the SPX up near 2150, allowing her to claim victory over the dark forces of deflation and raise us 50 bips in April, and once again in June.

This sort of post really riles my pal Permabear Doomster, who needs to relax and understand what we're trying to do here.  We're war-gaming the end.  These are Soviets-in-the-Ruhr scenarios.  The existing tape gives us a set of targets both north and south, a road map of how we exit the 2009 reflation-rally channel and what may happen next.  You'll notice that I'm drawing the same lines again and again, all waiting for a signal from a plausible overbought top, and that's OK.

The market will tell us when she is ready to implode.  In the meantime, be patient or make hay if you can while the sun still shines.

Looks like the bears are going to get squeezed hard today.  Cool.

Monday, March 23, 2015

The task of April is to return us to 1820 SPX

When the market finally rolls over, it will plummet like it did in August of 2011. 

Then it will bounce, and roll over again, but harder -- a May crash.  But the worst of it comes on the third leg down, a sustained bloodletting that simply refuses to end, as the pension funds unload.  A return to the 1000 level on the S&P 500 by the end of June is very possible.  It looks ridiculous on any long-term chart, a sheer cliff.

But who is seriously going to buy the dip and re-establish any degree of confidence?  All we need to do is get the selling underway, kissback two critical rally trendlines, and the market will implode

When you remove the QE supports, the market returns to its point of origin.  Only now we are laboring under all that debt.  The weakness is there, so are the warnings.

At least this first leg down will be highly tradable.  This may not be so when the real endgame arrives.  So stay frosty, Be like Bibi:

a young Benjamin Netanyahu prepares to trade SPY options
April's task for the S&P 500: steep decline, bounce at support

Saturday, March 21, 2015

BBRY Death-cross imminent

Market up 1% Friday, BBRY down nearly 2%.

This one is about to die.

Karl S. Denninger, future owner of BBRY.PK

So have some fun at Karl's expense.

And the chart.  You might object, noting that BBRY had a death cross roughly a year ago.  She survived that swoon, but she has now lost the channel from that recovery.

Bye-bye BBRY.


Disclosure: I've never traded BBRY or any derivatives thereof.  I only play index options and volatility ETFs.

Edit -- more fun, try your hand at this.

Karl S. Denninger
Karl S. Denninger

Wednesday, March 18, 2015

Will BBRY survive 2015? Probably not ...

BlackBerry is approaching another death cross on her chart.  It looks like it's about time to wind this company down and sell the toner and the remaining sealed, unopened cans of keyboard de-duster.


David Stockman and the ZeroHedge bear chorus are getting all excited lately with crash warnings or other violence on the indices.  I don't see why the current move can't last another week, dragging on toward the end of March.  Plenty of wiggle room on the chart, and we still need that touch of the upper daily and weekly Bollinger Bands.


Friday, March 13, 2015

The Panic of 2015

April - June, gentlemen. 

Or maybe I'm just trying to stay ahead of Bicycle in the bearish arms race.  He is formidable!

SPX 1Y "Panic of 2015" crash

Friday, March 6, 2015

June rate hike, please

Please, pretty please.  Janet, I'll send you a Starbucks gift card, good for a latte or baked goods, or -- what the heck -- why not both!  Treat yourself right.

SPX 1Y head & shoulders top 3PDH etc etc ceteris paribus ad infinitum