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.

51 comments:

Phat Repat said...

I like what you posit CG. Yes, let's make some hay along the way. ;-)

I have closed out short with minor profit and am now neutral. The numbers I have as of now are:

Buy above 2086.14 with stop at 2064.75 and a T1 of 2171.92 (cluster)

Sell below 2051.99 with stop at 2073.32 and a T1 of 1977.38 (non-cluster)

Some potential shorts: GLD, USO, FXE, FXY; to name a few.

Phat Repat said...

And, to while away the time as I wait for a new entry, I take heart knowing the exceptional talent being developed at our institutions of higher learning as evidenced by the 2014 National Debate Championships.

Christian Gustafson said...

I can't wait to see where we end up into Passover.

Next question is, where is support? Some channel line? 1820 SPX? 1740 SPX? If we are completing a very large ending-diagonal shape, it's important to know where it began, because that is our initial target once it breaks down. Yikes!

BBRY is positively dying today! LOL! That low-life Denninger is reduced to hoping, praying for a security breach on the Android or iOS platform.

Karl Denninger is a truly despicable person, a complete piece of human garbage. I hope he has a considerable portion of his wealth tied-up in this turkey.

I toast the death-cross of BBRY!

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

would guess the 1820 april target is off the table given the strength of todays rally.

Christian Gustafson said...

Not necessarily, T Berry.

We could top this week, or we could top into April FOMC, or ... something different altogether.

Suppose we make that new high this week, but just keep going? Some sort of blow-off event, like a Yen crisis that is misunderstood as a buy signal.

It's very dangerous for all involved. Just ask anyone who held short over the weekend.

T.Berry said...

thx cg. i have some cash but want better prices and 1820 would be acceptable :)

Bicycle said...

Personal savings rate YoY% is about to blow a gasket.

Bicycle said...

Personal savings rate YoY% is about to blow a gasket.

Phat Repat said...

I did, per the system, enter on the long side. Not liking the entry and should probably have held off since so close to trigger. But, it is what it is.

For me, that puts the stop at 2071.55 with an ideal exit at 2135, using current numbers.

Permabear Doomster said...

re: riled up.

I've been that way since spring 2009.
-

I'm sure 'wishing' a grand top is under development... but I still can't see it.
--

Most world equity markets are soaring. Even the EU PIIGS are rising. Spainish IBEX about to test 12k. If that is taken out... then 16k.

So many indirect signals.. none of them suggestive of US market weakness.
-

I will go stare at your chart for a few more minutes, but it'll probably just make more annoyed.... and frustrated.

Not so much with you CG, but the overall nonsense of QE, and the endless lies out there.

Phat Repat said...

CG
Though I'm aware of the individual, why the disdain for Denninger?

Early numbers have me holding, for now. ;-)

Bicycle said...

Well it's certainly starting to get interesting.

We have hopefully *just* put in 4. However, I remain fearful that we will make one more run at the 200 (or even slide beneath it like we did with 2), continuing 4, and stretching this out that much further.

The good thing is that as long as we don't put in another touch of that top trendline (and thus 5), we know that any big slide down to the 200 is another bear trap. If we don't put in 5 first... any slide to the 200 or below might be a *really* great place to get long.

Christian Gustafson said...

And we have Bradley turn dates coming up in April and May.

What can they mean?

Well, a Bradley turn can confirm one of 3 things:

1. a market low, for a long entry ...

2. a market high, for a short entry ...

3. that you are a complete schmuck for putting any faith in such market voodoo at all!

Bicycle said...

...and with that, 4 is still not in yet.

It's gonna be a long year.

Phat Repat said...

Ja, Bicycle, meine hosen are on feuer.

I'm leaning towards a green close for the day, however. Let's see after the first hour or so, when the chimps are finished slinging poo everywhere. ;-)

Bryan Franco said...

E of triangle nearing completion?

Phat Repat said...

Bicycle
NBC Breaking News

California orders unprecedented mandatory water-use slashes to deal with drought.

Time to move?

Bicycle said...

California is in such deep trouble.

We'll start to see local and regional bank failures later this year as ag loans go under and the housing market in the central valley, silicon valley, and LA crashes. Just like we'll see bank failures in oil producing regions of the US later this year.

That's why you're seeing more action today. They will let you starve and die of thirst no problem. But ag subsidies and bailouts are all about the banks, always have been. So Moon Beam knows something about the stability of the banking sector in California that we don't yet.

PNW and Great Lakes region will stand to benefit the most from this in terms of ag economy, real estate, capital inflows, etc.

Amazing how this is going to be a reversal of the Dust Bowl. But it was very predictable. There is vast and easily accessible archaeological evidence of civilizations wiped out by lack of access to water in the SW United States.

Christian Gustafson said...

McClellan flat on the day suggests a big move ahead.

Reverend Nihilism said...

"McClellan flat on the day suggests a big move ahead." The move is down.

Phat Repat said...

Bicycle, thanks for sharing; insightful stuff.

Boring day and have such wide range of entries I will set the alerts and start the long weekend early.

Buy above 2083.56 T1 2174.97 (cluster)

Sell below 2049.50 T1 1959.87 (cluster)

Good luck all and enjoy the holiday.

T.Berry said...

someone has confidence tomorrows jobs number is gonna be good. they probably got it already. losing any hope for a pullback anytime soon.

T.Berry said...

wow, whoever bought yesterday might not like monday. what a bad number

Christian Gustafson said...

VIX and the UVXY ETF show a complete lack of worry.

2138 SPX still proposed as the end of it all, the 1.618x fib extension of the 2008 bear cycle.

We need to visit that upper Bollinger Band on the SPX, while putting in similar spike lows in volatility.

T.Berry said...

well monday open wasn't good but nice reversal. earnings season upon us and they're usually good.

cg, agree the vix is not showing any concern but is there any to begin with? fed dudley saying delay rate hike which i firmly believe they will. until zirp begins causing problems no real need to raise.

Bicycle said...

Watching.... waiting...

T.Berry said...

with earnings beginning tomorrow i just can't see a mkt pullback for a while. good follow through today could see new ath's this week.

maybe small pullback comes sometime in may?

Christian Gustafson said...

Count me as bored to tears until we reach the upper Bollinger Band on the SPX.

Again, SPX 2138 is the perfect place to end all of this.

T.Berry said...

cg, can't see how we don't hit 2138 this month with earnings. that's just 2% move. agree, its boring but nice & steady moving higher this month.

Phat Repat said...

Booooorrrriinnnggg is right!

Still out at the moment but will be back in once 2090.38 (long T1 2174.97 cluster) or 2056.15 (short T1 1960.66 non-cluster) is breached. Tick Tock

And here is something interesting from TC's site for you global warming, er I mean climate change believers: Mini Ice Age 2015-2035 | China’s Food Production Strategy for the New Grand Solar Minimum (62)

T.Berry said...

i'm good with .5%+ boring days :)

coupled with earnings are rate hikes getting pushed back (still of belief nothing before 2017), whisper of qe4, and vix on life support, it's going to take some event to get even a 3-4% pullback.

Bicycle said...

OMG. Is this hard evidence of an impending rate increase? Commercial Paper Outstanding, Percent Change from Year Ago, Triangle of Doom.

This is about as apocalyptic chart I can come up with today, folks.

T.Berry said...

until zirp becomes a problem why would they raise? i guess it's possible she could go a token .25. dont see that having much effect on mkts--probably similar reaction as when qe stopped last october.

Christian Gustafson said...

Is there a good insurance company or fixed-income financial whose upcoming earnings could give us a clue on this? They are truly starving for yield.

Bicycle said...

ZH now picking up on the revolving credit issue on twitter, I sent them my chart about an hour ago. Maybe we get an article soon with some more insight.

Christian Gustafson said...

Here's a useful schedule of the upcoming Greek debt obligations.

Just in case you think it could make a difference.

T.Berry said...

the fed sure is a good waffler. next month i think they finally confess no rate hike till later in year which will then turn into next year. clearly stocks aren't pulling back anytime soon especially now that earnings are rolling in.
less than 2% from ath's and the vix is still 40% above 52 week low. lots of upside ahead

Bryan Franco said...

One last closing high

Christian Gustafson said...

Yessir. Followed by a key reversal day.

T.Berry said...

one last closing high?

not fighting fed here. no rate hike in '15 (slim chance of .25 later in year which mkt will initially sell down and provide good entries but rebound rather fast) and qe4 chatter could make that tough but good luck!

Christian Gustafson said...

It sure sounds like the William Dudley has everything under control.

Bicycle said...

Commercial Paper of Nonfinancial Companies, Bear Rising Broadening Wedges.

I am back to ruin the bulls' Cheerios this morning.

Bryan Franco said...

Just to be clear.. not advocating a short position just as we make a new high. Need to then wait for that surprise reversal day or something "shocky". Similar to what CG says. Key reversal days. Yes.

T.Berry said...

so without a reversal day can we have more than one more new all time high? currently closing record high is 2117 . thanks!

Bryan Franco said...

Sure. We simply require at least one more closing high before the next 20% + correction. This is based on research i have done on past corrections leading up to new highs. I am speculating this will be the final push higher.

Christian Gustafson said...

From 2138 SPX (1.618x fib extension of the 2008 bear cycle), 1737 is only an 18% "correction".

Technically, we would not yet be in a new "bear market".

Bryan Franco said...

Oh the days when 400 points was 40%

T.Berry said...

thx bryan. trying to figure out when to put cash i've been building up since dec to work. 20% would be a gift but the plan now is put some at 5% if we get it and save a bit in case it does go down further. this is long term money (12 yrs min) so i'm not worried if we do drop further. in 12 years the stock market will probably be at least twice what it is today or more.

Christian Gustafson said...

2141 SPX next Thursday? What sounds good for you?

A number of bearish analysts who really ought to know better are STILL counting this thing with a March top and the usual 1-2, 1-2 wave count since.

I have nothing but contempt for these people.

T.Berry said...

good with 2141 cg, as long as it's not the last one :) if so, we may not get to my 2400 target this year :(