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

19 comments:

Christian Gustafson said...

First!

Phat Repat said...

Okay, straddles have worked incredibly well with gains more than covering losses and targets still haven't been fully hit, yet. ;-)

As to a rate hike, well, if anything, it would be a token hike and I'm not sure that would move the markets for any duration. However, and putting on my tinfoil hat, with the continued advance of the USD we just might be inching towards the perfect storm of a system so stressed that it finally ruptures. And that would be most unpleasant, for all of us. For that case, being long books, edibles, and defense is probably not a bad prep step.

The system says... 2084.27 (confirmed, EOD) would be a short entry with a T1 of 1988.60. I kinda doubt it, but, it is what it is and the trend is def down as of now. A long could be entered above 2118.83.

Bicycle said...

Speaking of guns and ammo...

Bicycle said...

So I guess we're going to go have a touch of the lower BB... geez...

Christian Gustafson said...

You probably figured this out, but the pullback from today is too deep to count as a likely "wave 4", and is much more likely a "B".

So, assuming still that our final top is not in (Bollingers), that would mean that this pullback can eat some more time and go a bit deeper. If 1980->2119 was an "A" wave up, then the 50% retrace is down at 2050 SPX, and the .618 at 2033.

Finishing "B" and putting in a final "C" could take us through EOM March. The top trendline on the larger megaphone is up at 2150 SPX in this window.

Permabear Doomster said...

Hmm, its a great chart CG
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As I was saying since late 2014, I see a Fed rate rise sometime between April/June. Clearly.. that now seems likely... this June.

Of course, a 25bps rise is not so much the issue, but that a new up cycle in rates has begun.
--

Best doomer case by mid/late summer are the 1700s. Under NO situation does a move under there look viable. I wish it were... but it just doesn't... based on decades of price action.
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With ECB QE-pomo... there is even the threat of just continued upside melt across the summer... to Sept/Oct.... sp'2300s or so... and then a sig' drop.
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I wish I didn't believe it, but from there, it looks like a hyper-ramp for two years into 2017.... and then the paper/QE bubble shall burst.

In any case... have a good weekend.

Bicycle said...

Personal consumption expenditures: Durable goods: Jewelry and watches, Bear Ascending Broadening Wedge

Christian Gustafson said...

No way, Bicycle. A breakout is coming!

Add to cart.

Bicycle said...

So here we are, at the bottom Dow BB, and a bull descending broadening wedge having formed since the beginning of the month.

It can't be that easy, can it? New highs and a spike through the top BB next, to put in the 5th? Or is it a trick?

Christian Gustafson said...

There is a Bradley turn due this weekend. Maybe this weakness lasts the rest of the week and we reach support around 2040 SPX on Friday.

Then it's up to 2150 to finish this business.

Bicycle said...

Or now that we are through the lower BB, it is possible that we just keep going all the way to the bottom of the rising wedge at DJIA 17500. 17500 by the end of the week, Bradley turn this weekend, and then yet another march higher to try and put in a 5th. Bleh.

Bryan Franco said...

The last three swoons from close to close went -7.45%, -4.95%, and -4.65%. This argues, once again, for another closing high before we are allowed to have a 20% + crash. Again, the sequence of drawdowns that goes 5%+, 3-5%, and 3-5% is the only such sequence that requires a new closing high before a 20% + crash. Never in history has it happened. This argues in favor of CGs additional high. So funny how TPTB can so conveniently have all the assets that they want to go up... go up (stocks and bonds), and all the assets they want to go down... go down (gold, copper, oil).

Phat Repat said...

Another nice thing, though obviously without guarantee, is the ability to peer ahead with the system and see potential turning points.

And while the week is not over, assuming the downtrend continues and we can close out in the 2060's or so, then next week could mark a turn with buys coming in above 2060/70's. The target being shown at this time is 2163.74 (clustered).

Other than that, I remain short while making some spare change for my Guinness Stout fund. ;-)

Depriv said...

Hi,

A target around 1800 with a corrective wave seems OK for me: that that area is already marked for a fourth wave support. One more 4-5 for a bigger TF makes sense.

But anything below that with corrective? It seems difficult and indicates a new, big-big ATH afterwards. Or a diagonal-like motive f*ckup instead of a clean, nice fall.

Bicycle said...

Dow is in the late stages of setting up for a bull stampede to 18500+. Room is starting to run out in the wedge for this to happen, so it shouldn't be long now.

With the top BB curling up again, a big move is coming.

Bryan Franco said...

Long EWJ short IWM... Nice low risk entry here?

Phat Repat said...

What a day, what a day... :-)

Short not stopped out, but quite close. A long signal wouldn't happen for me until 2078.40 (confirmed) with a Target of 2165.74 (clustered). Tomorrow/Monday will help to clear things up. And doesn't the FED meet next week? Hmmm... ;-)

Bryan
Is EWJ/IWM a long term play? Seems EWJ is quite the slow mover. And though IWM could reverse, or pause, it has a long target of 127.24 (clustered) with stop 121.06. Coin toss until next week?

Bryan Franco said...

Phat - I like the ratio chart of it .. go into Stockcharts and type EWJ:IWM for the ticker. Just my subjective eyeballs though. "Cup and handlish" on the daily. Also have a natural hedge via long yen in EWJ. If Small caps top out before Large Caps (as is usually the case), and you want exposure to Japanese insanity while also being hedged in high beta small caps. Seems right. Chart seems right.

Phat Repat said...

Bryan
Okay, wasn't quite sure of the dynamics of that but now that you describe it I see what you're doing. Thanks.

Not sure if you're in the US, or perhaps you're trading a tax-deferred account, but I stick mostly to SPX futures/options in a liquid account for tax benefits.

I do follow numerous stocks/indexes since my system is automated (graphic and numeric) but don't really venture outside the SPX unless there are some really good setups (such as FXC, FXE, GLD, and TLT recently). Straddles seem to work best when a change in trend is detected.

Early on, I need to see > 2077.60 in order to initiate a long. Like the action so far. Tick Tock