Monday, December 21, 2015

Charts 12-21

Updated counts.  Bullish and looking for new highs by the first week of the January.

Monthly SPX Bollinger Band is at 2150; the weekly is near 2145; the daily around 2120.  A lasting and significant high and turn would reach them all and then fall apart.

SPX 12-21
SPX 12-21 1Y

Thursday, December 10, 2015

Rate hikes will be market-bullish events

At the moment, the strength of the $USD correlates very strongly to equities.  When King Dollar is torpedoed like it was yesterday, stocks plummet.

So does this mean that a rate hike next week will be tremendously bullish for stocks?

The argument runs like so:
  1. Fed tightening will shoot the $USD through the roof
  2. Beaten-down currencies like the JPY will crumble again with respect to the Dollar
  3. The Yen carry trade and everyone riding on it will launch equities to new highs
When the market falls off its highs in January, the Fed can then rally equities by ... adding another 25 bps.

And so on, until the correlation shifts again between USDJPY and equities. 

SPX highs into EOY 2015

This of course begs the question -- is the Dollar actually on the brink of collapsing today, with the Fed now forced to defend it with a series of rate hikes?

The conventional wisdom of "one and done" or "no hikes at all, ever", may be completely wrong.

2016 may be about the Fed scrambling to regain control of the monster they have created, where the market bounces at each FOMC (against the overall decline) because they continue to tighten.  Between hikes the market sells off again with increased severity as the market comes to grips with what is happening.

The Fed hand may be forced.

The new game may be for each nation to export deflation to the rest of the world.

Tuesday, December 8, 2015

Let's set our sights a little lower

2138 SPX is mid-wedge this Friday with the New Moon, a new all-time-high, and the 1.618x extension of the 910 point crash in the 2007-2009 cycle.

After-hours /ES has broken free of the triangle; expect a gap and run tomorrow.

sleeping bums on the D-line bus early this morning

And an updated chart.

SPX daily 12-08

Friday, December 4, 2015

At long last, a blow-off top in equities?

Can we make it all the up to 2170 SPX by the New Moon next Friday, December 11?  Since 25 bps from the Fed is priced-in and all?

This would complete the rally off the August 2015 lows and touch the top of a megaphone shape drawn earlier this year.

Let's put a bow on this for the Christmas.

SPX 12-04