Monday, August 31, 2015

Lee Marvin on Combat

If you need a bearish count on SPX

This works.  It even includes a "leading diagonal", which has been an elusive unicorn in the tape for years.

Either SPX or the UVXY volatility ETF has got to break right here, right now.

The bearish count needs a new low this week, or else the recent drop was just some degree of a "wave 4", yet again, we know the drill, etc etc.

SPX proposed bear channel

Monday, August 24, 2015

Three Peaks and a Domed House may complete by Christmas

This week is all about banging out the margin calls and completing our descent to support (?) at 1820 SPX.

September FOMC will hike rates and initiate the next plunge to the 1530 area, by the October 9 Bradley turn date.

A final crash from the next Bradley turn in mid-November brings us down to 1074 SPX, just in time for the Fed to announce its next package of Quantitative Easing.  We will then be running on faith and fumes the rest of the way.

The descending trendline here is so steep, that this cycle may finish entirely by Christmas.

SPX 5Y 08-24 3PDH

VIX only 28 on a 100-handle S&P gap down?  Is that weirdly bullish?  Margin calls coming.  Edit:  VIX quotes bad on my end this morning.  UVXY!  OMG.

Friday, August 21, 2015

Well here's my guess

If the 1971 low holds over the weekend, we have a chance to finish up a domed-top here.

The market would rally 100 handles SPX from here into September opex (rate hike coming), kissing back the old support from below, as well as the bearish overhead trendline.

SPX 3PDH domed-top & drop

Monday, August 17, 2015

Charts 08-17: Tidy-up that channel

The drop at the open today made a mess of my short-term channel for SPX, but what we're left with is much cleaner.  I'd like to see us set a new high early in the session on Thursday, before reversing intraday and ending this op-ex week right at 2125 SPX.

Then we can finish up next week.  Anyone for 2162 SPX?  We may have to drag the daily SPX Bollinger along for the ride.

SPX 08-17

The larger waves for the initial panic crash this fall, "A" down.

SPX 08-17 1Y

Saturday, August 15, 2015

Charts 08-14: More rally, please, yes

With the huge hammer reversal off the lows this week, we may finally have our setup for that last touch of the upper daily Bollinger SPX and a hard breakdown of the indexes.

The tape counts reasonably well on the S&P 500, so I'd like to see us back up at 2134 by August opex this Friday.  The bottom is there, so is the new channel (for now).

SPX 08-14

Here is the initial breakdown to support at 1820.  Extrapolating the 50 and 200 looks like the death-cross on the SPX arrives around the start of September.  Super!

SPX 08-14 1Y

And of course the VIX forms a decent mirror-image of the SPX, grinding lower in its own ending-diagonal.  A sub-10 VIX in two weeks would be a gift from God for market skeptics and aspiring index shorts.  I do think the next GDP print on 8/27 will be very important.

VIX 08-14 1Y

Yes, that's a 1-2 move I'm expecting on the VIX.  The "W3" from that should be pretty amazing.

Hang in there.  Respect reversal candles like the hammer this week.  Be patient, stay in school, and don't smoke crack -- it's a ghetto drug.  (With election season warming up, it's time to see the fine "Bob Roberts" movie again soon.)

Wednesday, August 5, 2015

Charts 08-04: We still need that last touch of the SPX Bollinger

New highs over the next week or two would give us a chance finally to reach the upper Bollinger Bands on the daily and weekly SPX, to put in a proper top like 2007.  The /ES looked great overnight!

Some analysts counted the swoon in late June as a "failed 5th", but this conclusion is highly unlikely, since such an event would have taken us much further south by now, certainly under the 2000 SPX level.  UVXY would have spiked 30% or more in a day, and kept going.  That's what a wave "failure" means -- the tape breaks and we reverse hard and fast while everyone watches. 

The ending-diagonal count off the October 2014 lows is still very much in play, we will have another good opportunity to complete the darned thing and exit the eternal chop zone before August opex.

SPX 08-04 5th wave count

You can also see that the above tape may count as a triangle; either way, more rally is still ahead.

Then we'll see what great deflationary fun this Fall will bring.


Monday, August 3, 2015

Because deflation. Because Nicole.

The Nicole Foss put together an outstanding summary of the credit bubble known as modern finance, and how a severe deflationary depression will inevitably result.

I'm glad to see her writing again, that baby-killer Ilargi has been too vocal and too annoying with his screeds against The Hun throughout the entire deadbeat-Greek crisis.