Tuesday, May 12, 2015

Charts 05-12: Range-bound through May?

We did not get a spike up to the upper daily Bollinger Band on the SPX on Monday, dropping us back in the old range.  It's starting to look like a smaller ending-diagonal 5th wave within the larger pattern since the October lows.  It could easily last to the end of the month and eat the theta of anyone betting hard on a seasonal May sell-off.

Here's a proposed count:

SPX 05-11

The first target of a break would be its point of origin, the 2040 area SPX.  The 200 DMA will be in this range into June FOMC, setting up a bounce back to test the wedge.  A failure turns our attention back to support at 1820 (for the next bounce).

If the Bollinger Band theory holds out -- that we need to reach it on the daily and possibly the weekly SPX band, like we did in the 2000 and 2007 (year) tops -- then we have a very useful signal and guard against shorting this too early, while it is still stuck in this dangerous chop.

And the larger meltdown into the fall, of course, as we roll-over the old supports are all lost (desperate, doomed rallies).

SPX 3PDH

15 comments:

Christian Gustafson said...

And it would still be nice to see a few Hindenburg Omen warnings on a run to a final top. The last ones we had are past their "use by" date.

Reverend Nihilism said...

http://www.thekeystonespeculator.blogspot.com/2015/05/cpc-putcall-ratio-daily-chart-signals.html


Bicycle said...

Can you picture what will be
so limitless and free

Bicycle said...

this is the end
of our old friend
the trend

Depriv said...

I would consider a real ED: 5/a(LD) from the point you marked as green ii to green iii. Then 5/b(flat) to green iv. Now 5/c(impulse) is on the way.

The projected 2150-2200 target range would do as a pretty good owerthrow.

And with no bear left standing, the fall could be conveniently cruel.

Christian Gustafson said...

Yeah, Depriv, the ABC count certainly agrees more with the DJIA, too.

Reverend Nihilism said...

OMG, make it stop.

Christian Gustafson said...

New Moon on Monday

Bicycle said...

Dow's nearing the target but not through the top BB yet on this move

importantly also not yet back in the rising wedge

Bicycle said...

UMich Consumer Sentiment biggest miss to expectations on record this morning... they should have looked at the chart...

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

doubt very much 1820 will be seen again. now happy for a buy entry at 2000 but would settle for 2050 to scale. what happened to may sellers? on strike?

Christian Gustafson said...

SPY volume half its 3mo average today. But can we just get a couple of Hindys now this week?

T.Berry said...

cg, hasn't vol been low for years? not much to make of it. no one it seems is wanting to sell. content holding for the long term here. if this may is like previous 6 it should be 15+% higher next may.

Reverend Nihilism said...

The BPSPX has barely budged for days, very unusual.