Wednesday, May 27, 2015

Charts 05-27 am: One more high! and 3PDH update

We've still got the daily and weekly SPX Bollingers to visit, and we could come within a few points of the monthly Bollinger Band as well.

I noticed that the May 6th low actually was right at the .382 retrace of what we have been counting as "wave 3" in the ending-diagonal that is now terminating the reflation rally effort since the 2009 lows.  So let's call May 6th, "wave 4" and be done with it.  That would put us in the final wave 5 now, with (a) of 5 complete and (b) either complete now, or finishing up soon.  (c) of 5 will be an impulse wave to a top, ideally a touch of the top trendline that defines the wedge.

I'd like to see a steep, peaked, castellated structure up here for our domed-top, something volatile like this with deep retraces that shakes out all of the sissies.  It's a series of drops with retraces to visit and reject old channels. 

SPX 05-26 Domed-top structure

The pattern defines a head and shoulders top with an initial target below 1500 SPX.

SPX 05-26 3PDH resolution

This reaches a climax this fall, whereupon the Fed is very likely to do something bold again at the December FOMC meeting.  The short-squeeze will be epic.

Ben Jones's invaluable Housing Bubble Blog reports that idiots are waiving inspections again to get in before they are priced out forever again.

CNBC on Colorado. “When Christopher Simmons began shopping for a home in Denver six months ago, he had no idea the risk and the frustration it would take to get one. The 27-year-old had good credit and cash to put down, but that was not enough in this red-hot market. Finally, Simmons went under contract on a small home in a transitional neighborhood, but only after beating out five other bidders. He wrote a letter to the owners, describing how he had grown up in the neighborhood, and then he added a risky tactic.”
“‘I waived the inspection and the appraisal contingencies on all of the offers I made and on this one as well,’ said Simmons.”
“‘Prices are going crazy. Multiple offers, love letters, videos, all kinds of things to appeal to a seller in order to make yours stand above all the others,’ said Denver real estate agent Jill Schafer.”

For all the greater-fools out there laundering Chinese graft-fiats or desperately buying real estate sight-unseen, let me introduce you to Michelle:


T.Berry said...

sorry cg but i think "one more high" is going to get used alot over next few years. this mkrt still looks good for long term holders. i keep looking for reasons to sell but still don't see any. granted i'm in for the long haul. in 15 years the dow very reasonably at 60k+ and that is only getting about 8%/year return which is well within historic averages. yes, i agree to some degree the fed is behind it but who cares as long as you make $$$$.

Christian Gustafson said...

Well, Mr. Berry, we are fortunate in that the ending-diagonal is based on two contracting trendlines, limiting the time we have to mull this over. We should have an answer fairly soon, eh?

If the E-D blows out to the north, more than just a little overthrow, and market Bears are going to make poor Michelle in the video look perfectly rational.

The hoarding shows are fascinating voyeurism, but also highly disturbing, since they tread right on the edge of serious mental illness. Some of these people are truly disfunctional and broken.

Permabear Doomster said...

If Michelle was a trader.. she'd be the ultimate buyer.

She would NEVER sell anything.

Gods help her.

Bicycle said...

spreads widening on IL muni debt. lol ZIRP

Christian Gustafson said...

"Escape to Wisconsin", Bicycle.

Bryan Franco said...

Our latest from HT Trading. A low-risk way to play defense:


Bicycle said...

Up on monday?

Christian Gustafson said...

It's Friday night, so I guess I'll go troll the mooks at Zero Hedge.

Turning in, got some Fritz Leiber to read. Always worthwhile.