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


Christian Gustafson said...

Netanyahu looks like Brando there. But with an Uzi.

Bicycle said...

the Hebrew calendar is lunar based

The next two lunar eclipses in the current tetrad are April 4 and September 28

numbers 3 and 4 in a tetrad of 4 blood red moon lunar eclipses

The next Hebrew lunar new year starts on 13 September 2015

5776 it's the apocalypse

5776 x 38.2% = 2206

September 16-17 = FOMC

Christian Gustafson said...

Once upon a time, Bicycle, I did bookkeeping work for a Reform synagogue in the Chicago.

Part of my job was sending out Yahrzeits, an annual Jewish remembrance of the dead. We had Mac software that handled the date conversion to the lunar calendar. Not something you want to bungle.

Lakefront condos on the building site now.

But, head over to Jesse Jackson's Operation P.U.S.H. headquarters at 50th St & Drexel Ave. Notice the nice Hebrew date on the cornerstone of the edifice. That was a synagogue, too.

Hyde Park Jews are a fine lot. I miss them.

Bicycle said...

Here we have the native Californians, recreating on top of what will soon become the very last vestiges of their groundwater.

They should be spending their time figuring out how they are going to stop the saline intrusion into the emptying wells of the central valley.

Permabear Doomster said...

Shark. Jumped.... again.

I refer you to everything you said last year.

Month after month.... each month.. just upgrading your starting point for the 'collapse'.

When we're sp'2200s... what then? Ohh yeah... you'll upgrade it again.

Honestly... what the hell ?

I've just raised the probability that you are some kind of Govt' disinfo agent from 1% to 3%. Congrats.

Bicycle said...

The targets change because the waves keep extending on huge bearish patterns that have rising top trendlines. Frankly I think most that spend any time here have the comprehension to understand that.

Christian Gustafson said...

We're actually being very careful with this thing; I've listed the conditions for which I am looking for a significant top, the most important of which is of course at least a touch of the upper daily Bollinger.

We've had numerous cycles since last fall when other bearish bloggers got all excited with a few scary red candles and then forced TERRIBLE "impulsive" downward counts on the charts. I've been all over these guys.

Daneric, Pretzel, all of them did this. But I have been patient.

I've also been making coin on the long side. I have plenty of dry powder to accomplish what I intend to do when it is time. Plenty.

The big question is of course, when this will start, and how far and fast she will move. My opinion is that 2015 will be to 2008 what 2008 was to 2002, faster, more vicious, and far more damaging.

Everyone's got a thesis. Yours, Doomster, may be that the CBs are in full control and we have reached a permanently high plateau.

I disagree, but I am wiser now, and more patient.

Phat Repat said...

Yep, limbo land again. The current end to the bull leg tripped at 2095.08 and even fell below tomorrow's 2094.22 projection. But the long and short of it, at least for me, would be (with slight mods daily):

Long above 2112.78 Stop 2087.79 with Target 2207.03 (cluster)

Short below 2078.25 Stop 2103.21 with Target 1984.16 (cluster)

Patiently waiting on the sidelines... ;-)

Christian Gustafson said...

I'm actually interested in that 2078 level, Phat. I was wondering if we don't just headfake down through the current trendline support (we closed right on it) into the close on Thursday.

Friday's GDP print would then be some sort of red recessionary mess, that would of course pop the S&P 500 40 handles straight up again.

Phat Repat said...

Yeah, looks interesting CG. I'm not too confident about getting down there at this time. The numbers change slightly each day, and that's a good thing since it leads to a higher degree of confidence when the trade is actually put on. But I like your scenario; certainly plausible.

T.Berry said...

going to 1820 is almost 13% off. yowww.not doubting it but mkts haven't experienced that in over 6 years, no? would be happy to see a 5% correction to buy.

Bryan Franco said...

Still need a new All Time Closing high for there to be a 20% + crash. We can fall UP to 20%. But not more. I love and hate these days. I love them for the tactical opportunities, but I hate the fact that there is no precedent for a 20% + decline based on the sequence of declines leading to the last ATH. And why, by the way, hope for such a massive decline? No politics involved on my front. Just that bear markets are more fun to trade. Still a patriot.

Anonymous said...

"This month’s MIP is also projecting a major decline well into deflation territory for March. It will be interesting to see how the media reacts to this. The one interesting thing in this chart is the year end which appears to rebound sharply due to all the deflationary months from year-end 2014 falling out of the equation. But, of course, if they are replaced by equally deflationary months this year the rise won’t happen."

Phat Repat said...

Hmmm... Looking for continued down based on numbers and action so far. Right now, system is giving me the following:

Short from 2078.25 with an ideal target of 2025. The target beyond this range is 1984.16.

IF ideal is hit, I will seriously consider extending the position. Tick Tock