Thursday, November 12, 2015

A wave count for those who refuse to believe the top is in

If you still think we can put in a higher high on SPX, then maybe a giant ending-diagonal count is for you.

SPX 11-12 ending-diagonal finale count

I tilt my head and squint my eyes, and the sharp October rally still looks like two five-wave impulse moves north, joined with a little correction -- i.e. an ABC move.  This would fit an ending-diagonal count that has been lurking since the August 24 mini-crash lows, which began with an initial bounce in 3 waves.

In this scenario, the October FOMC Minutes released next Wednesday are dovish and accommodating once again, sparking another short-squeeze off the .382 retrace at 2022 SPX.

The sharp 5th wave could then terminate either at the wedge boundary on Black Friday, or in the middle of the wedge on the December FOMC announcement itself.  AMZN P/E of 1000?

Or, of course, it never ever ends ...

16 comments:

Christian Gustafson said...

I should also add that we'll find support @ the lower daily BB SPX in the low 2020s next week.

Permabear Doomster said...

You know just how fiercely annoying I can be with you CG.

Lets be clear.. if those maniacs at PRINT HQ do NOT raise int' rates at the Dec' FOMC, it will lead to increasing uncertainty in US and world capital markets.

The Aug' lows will then be under threat.
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For now... your short term outlook looks viable.

yours... awaiting the next FOMC.

Christian Gustafson said...

You're precisely right, Doomie.

There's several layers of game-theory in this onion, and policy moves in either direction could set this off. The Fed is really stuck here.

December FOMC could be a LOW -- and the rate hike actually sparks a rally.

scott said...

the vix isn't buyin it...

http://stockcharts.com/h-sc/ui?s=%24VIX&p=D&st=2015-06-26&en=today&id=p14611290996&a=428878359

again CG, that upper target line is a fractal that has fallen off. Not valid?

Top of the cycle:

http://stockcharts.com/h-sc/ui?s=%24NYA&p=M&yr=20&mn=0&dy=0&id=p89499902460&a=429584544

the broad market top to top annualized return (NYA)= 1.1%!!!!!!!!!!!!!!!!

or a total return of just over 8%! LOL

Christian Gustafson said...

Scott --

I'm always interested in the shape of things, and trying to make sense of these ABCs.

If the Fed punts again next week and sends us north, it will finish off the E-D, a terminal pattern. And maybe then we'll get a proper impulse wave down (like August but much more scary).

Permabear Doomster said...

I can already feel a rampaging rant about the Fed building in me.

The Fed had multiple opportunities to begin normalisation for a good few years.. yet always delayed.

This past May/June was PRIME opportunity. They failed to raise.. market FALLS.

A rally in July.... but then no raise... market IMPLODES in August
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The Fed have built themselves a titanium box.. and have dug a hole for it... 500ft deep. Idiots!

Bicycle said...

it is Friday the 13th and oil is dumping into the 30's, can we leverage this ancient style of turn date knownst to the masses and get a slide through next week, to be stopped only by the usual Thanksgiving rescue

scott said...

Money issued as debt at interest is not money. It is a SECURITY (something with a secured interest) OWNED by private parties. There is nothing normal about that!

Such a monetary system is primarily interested in creating sureties of the users of the "currency" through normal economic activity that otherwise would be free.

This is why earnings aren't secured by labor - the laborer is made the surety on the issue of the currency he is "paid" in. Free exchange of currency is impossible for a surety as he has the financial responsibility for its use and is charged through inflation, taxes, and negative interest rates on savings.

As for the market the sell signals have lined up like wave sets in surfers paradise!

Massive waves on the weekly charts are set to break. May was the market high for a few years to come...

http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&st=2015-07-14&en=today&id=p13192278732&a=422863275

http://stockcharts.com/h-sc/ui?s=%24SPX&p=M&st=2002-11-18&en=today&id=p04648123774&a=429586288

Boggle says a decade of 6%. As the NYA top to top shows it might be a total return of 6% over ten years...lol



Christian Gustafson said...

Well there's 2022 SPX, the .382 retrace of the leg from 1871 to 2116 SPX.

Will it hold? Was that W4?

Can the Yen carry us the rest of the way (up)? To new highs and the Next Bear?

Bill Bober said...

Your best and most probable chart yet. They aren't going to raise.

Bryan Franco said...

The masses want a hike. The Fed knows it shouldn't as there is no inflation or growth, but I could see a paradoxical "relief" rally on a hike. That would be it. But now with Paris, does the Fed have yet another excuse to delay?

benjoyce said...

This Paris tragedy is terrible. I wonder (and I bet) that short term the S&P will bottom on this news Sun nt or just after the NY open. then rally but the options will be too expensive (at least for me) to profit well by buying naked calls. Fed news with the minutes on Wed will be a bullish reaction. Then I hope for a nice correction into the Dec Fed. As above they must tighten some or face a -something is really rotten reaction down. But this won't be that bad of a tightening and accompanied by dovish comments for the future. They want to pretend that all is normal. We have a big rally reaction for the Dec fomc. At the start of the new year market disaster stikes and the big cascade down ensues.

I hope my story is not fiction.

benjoyce said...

As is usually the case. If I can figure it out. It isn't going to happen

Bill Bober said...

"But now with Paris, does the Fed have yet another excuse to delay?" Absolutely, they will use any excuse they can. They now have several convenient reasons not to.

scott said...

Noise and more noise...Fed, Paris burns, rates, Wave 4!

You cannot have a wave 4 if this just went red!

http://stockcharts.com/h-sc/ui?s=%24BPSPX&p=D&st=2015-09-09&en=2015-11-13&id=p71245894922&a=408867296

Rates cannot go up if bonds catch a security premium!

http://stockcharts.com/h-sc/ui?s=HYG%3ATLT&p=W&st=2015-01-12&en=today&id=p26430933447&a=424134683

http://stockcharts.com/h-sc/ui?s=HYG%3ATLT&p=D&st=2014-08-06&en=today&id=p29514807035&a=414686080

AND new bull market highs cannot occur IF the top of the cycle has been confirmed!

http://stockcharts.com/h-sc/ui?s=%24SPX&p=M&st=2006-08-09&en=today&id=p53245718317&a=403532390

Simple regard for solid signals about to trigger is key:

http://stockcharts.com/h-sc/ui?s=%24NYA200R&p=W&st=2014-08-22&en=2015-11-14&id=p69888347554&a=430829316

Read my lips! no new highs! lol

Fantasy football is being banned in New York I hear? Maybe that will affect the Fed!




Christian Gustafson said...

Frank pointed out that my post marking the Pinochet centennial was a couple of weeks early -- geez -- but I'll put one up again when it's finally time.

But I'll try to put him in context of the long-term credit cycle and other figures on the Right, particularly Reagan and Thatcher, and the Autumn-cycle growth from the 1980s.

Time really does inform one's perspective on these matters.