Wednesday, April 29, 2015

Charts 04-29: Count the wiggles

We had our long-awaited brush with the upper daily Bollinger on the SPX this week, but we did not see a similar oversold move on the VIX and the volatility ETFs that track it, which suggested that we are not yet finished on the upside.  Here's my point re UVXY:

UVXY 04-29 daily -- lower Bollinger under $9

We're still inside a very plausible channel for an ending-diagonal to end it all.  Some more wiggles, more overlap, it will probably make the most sense in retrospect.

This short-term guess would have us bottom again today right into the FOMC minutes, which would not raise short-term rates.  The Fed members may continue to warn of such hikes in the future, but they are unlikely to raise today on the heels of this morning's GDP report.

SPX 04-29

If you're looking for an flashpoint event, it might be the Eurogroup finance ministers' meeting in a couple of weeks, should they decide to stop paying off the Greeks.

It would be nice to have all of our ducks lined-up in a row: the DJIA, SPX, and RUT at new highs and up against a 2-SD daily Bollinger band, comparable lows in the volatility instruments, and a plausibly-complete wave count with a terminal pattern.  Then the markets can go into free-fall.

SPX 04-29 2Y

Reader Reverend Nihilism asked about the move in the 10Y Treasury.  No breakout just yet, we appear to be at a midpoint in the eternal channel of the 35-year bond bull.  Presumably, a scary sell-off in equities bids the 10Y yield under 1%.  If bonds sell off along with equities, however, than that would be even scarier. 

TNX

32 comments:

Christian Gustafson said...

And if we actually break down and out of the proposed E-D channel, well, all bets are off.

But it would be much more pleasant if all the waves crested together.

Bicycle said...

Looking at WTI today, boy, are we ever close. Just need to tag high-60's now and you can turn the lights out on this wretched mess.

Christian Gustafson said...

Bored! Dullsville, even after FOMC announcement today.

The tape since Monday, April 27, looks like a triangle on the SPX -- wave (iv) in our count? That would work.

Consolidation before a final push. Chinese retail daytraders for the win!

Reverend Nihilism said...

I wish this deflation would hurry up, my rent just went up 15%.

Bicycle said...

We are at a very interesting level on the DJIA...

Christian Gustafson said...

Yes. Yessir.

Christian Gustafson said...

Bicycle, it sounds like you are bullish because you are bearish.

Me, too.

Bicycle said...

Yes indeed...

And haha... look at that turn just now!

Reverend Nihilism said...

Def consolidating for a sharp stab higher.

Christian Gustafson said...

I think I'm going to have myself put into a medically-induced coma so I can get through the next 8 or 10 days without losing it.

Has anyone else had experience with this?

Reverend Nihilism said...

Get yourself some Imperial Stout or Double IPA.

Christian Gustafson said...

Yes, I suppose I could induce a near-term coma that will get me through this crisis over at my nearby trauma center.

People are listing houses in the neighborhood these days, claiming proximity to this place as an amenity.

Bryan Franco said...

Russell seems done.

Bryan Franco said...

No more ATH's for RUT for many, many years.

Reverend Nihilism said...

Wowzers!

http://www.barchart.com/quotes/stocks/$TRIN




Bicycle said...

possible pennant forming on the dow today too. wonder if we will launch off before the close or at the open tomorrow...

Bicycle said...

also seeing some bull falling wedges on some tech names that would resolve about the same time...

Christian Gustafson said...

Ja, an ABC correction off the Monday high on the SPX looks pretty good here.

Are we just waiting for the low with a divergent RSI now?

Bicycle said...

...aand we break down out of that pattern. Yikes. Are we still putting in 4 of 5 here??? Could be. If we break down much further it could be over and we just follow the RUT down.

Bryan Franco said...

My guess is that the spx might be finished too

Bicycle said...

We're right on the bottom BB on the Dow right now...

Christian Gustafson said...

Yeah, we have a lot of the components of a top now.

The earlier counts and speculative charts I posted here that had us topping on Monday, 4/28, may actually have been right.

We are well out of that pink channel. Top may very well be in.

Bicycle said...

Dow isn't done. That was either 4 today or we're still putting it in, but the lower BB touch and rejection makes it as good a place as any for 4.

This could realistically drag out for another 1-3 months.

Reverend Nihilism said...

What is up with copper!?

Christian Gustafson said...

IMO SPX 1820 by the 5/11 Eurogroup fin min meeting is now possible.

Would need a red close today first.

Bicycle said...

i think we'll keep melting up... new ATH and 5th in on the DJIA by the close on 5/6!!! Battle!

Bicycle said...

xzibit is feeling bullish

Christian Gustafson said...

Bang! There we go.

Let's see if we can get the DJIA on board this time, Bicycle.

Christian Gustafson said...

Bicycle --

Trace your upper wedge trendline over, towards DJIA 18500, and you'll see it line up well with the May 11 date.

That's when the Eurogroup finance ministers meet and decide whether or not to give the Greeks EUR 7B to pay their bills.

Without it, instant Greek default, and a cliff dive in the markets.

Bicycle said...

Had a look at the DJU. Not sure what to make of it, but something's about to happen there...

Bicycle said...

And if you thought the current wedge and extended 4 was being a pest... zoom out and have a look at this log chart of the inflation-adjusted DJIA... we must exercise extreme caution dudes.

Reverend Nihilism said...

Housing is about to get WHACKED, if rates keep moving up.