Thursday, January 21, 2016

A long-term count for that elusive One More High ...

In a nutshell, we stayed within wave 4 territory on this last scary plunge, correcting the W3 that ran from 1266 SPX all the way to 2134 SPX last May!

If we have one more 5th wave left to go, it will confound the bears and take us all the way to about May 10, at SPX 2185, touching the top edge of a megaphone.

Weekly candles with RSI make the case here:

SPX weekly candles

Big-picture, I don't think China has any choice here but to attempt to defend the Yuan, at least until they deplete their foreign currency reserves to the point where it is hopeless and they buckle down.

All supports down to 1820 and even 1814 SPX are now blown, so I would argue that the target of the first true impulse down off new highs will target the 1740 area, with a tepid bounce.

By the way, there are plenty of Elliotticians out there who would suggest that the original bounce from the 2009 lows was wave 1, meaning that we have an enormous wave 5 ahead, reaching 2500+ on the S&P.  Thanks to RSI and fibs, I would argue that the epic rally counts ABC instead of 12345.

65 comments:

Christian Gustafson said...

Turning off comment moderation because I'd rather not have it.

Yes, I understand that collapse is imminent, etc, yes, of course.

I endorse the Austrian school of political economy ... I get it already.

Hugh Jazole said...

"Yes, I understand that collapse is imminent, etc, yes, of course. I endorse the Austrian school of political economy ... I get it already." It does seem odd. I think some people overlook that this is a VERY bearish blog. They're preaching to the choir, and somehow completely unaware of it.

scott said...

Hugh, this is not a bearish OR bullish blog!

IT IS AN INCOMPETENT CLOSED MINDED AND VERY dangerously UNEDUCATED blog.

“If you always do what you’ve always done, you’ll always get what you’ve always got.”

― Henry Ford

I provided CG links to Terry Laundry, Parker Binion, Peter Eliades, etc. so he might get a sense of ACTUAL trading strategies THAT WORK! lol

The goal of investing is increasing and protecting one's wealth. NOT getting stuck in useless
pedagogy that NEVER has a basis is reality.

WHO CARES about the Austrian school - they are as incompetent as the Keynesian meddlers. And I am a trained as a monetarist with credentials from the 8th ranked business school.(1986)

Austrians! my god! Think corrupt monetarist Milton F. who did such a fine job enslaving Chile and, yes, creating the justification for the income tax when he was at Treasury...His confessions in his autobiography are quite astounding.

EW believers are just that - BELIEVERS. Not a one has ever been able to trade correctly with a forward focus. Big picture sometimes but again WHO CARES! It is conceptual pedagogy and keeps you from seeing what is REAL.

Belief is a fictional form of conceptualization - and so traps people into attachment to ridiculous incontrovertible "facts" like "NEW HIGHS"!

Now CG offers a wave 5 certainty - AGAIN! WHO CARES. Trading does not involve such idiocy and a belief system.

Abandon hope all who enter here thinking they can follow CG's yellow brick road.

Christian Gustafson said...

Not looking for followers, scott, ever. Only sharing ideas with a handful of friends.

First order of business is to see if we can claw our way back to 1949 SPX by tomorrow close.

scott said...

But those ideas are so narrow - like your two dimensional VIX assumptions - I waited a couple weeks to see if you could understand your error. I gave you a link showing the extreme backwardation of the vix that is just now starting to remedy itself.

Just another example of you refusing to incorporate reality into your devinations.

http://vixcentral.com/

If I were sharing investment ideas with friends I'd make them as sound as possible by researching as many tested methods as possible. EW is clearly as sound as reading runes...

so many blogs like yours are just vanity press analogs.

Cyclone said...

First post here, and long time reader of CG's ideas.

Hi Scott, I am, for one, happy to get your viewpoints. But chill out man!! We get it.

Hi CG, thanks for sharing your thoughts over the years...

David Does said...

chill is good...graphs are good...explanations of graphs are better

David Does said...

hey scott , do you think the spx can make it over 1880 to 1940, are you still holding short?

Depriv said...

Yes. The right tf and the right caliber for fibos. This might work. Some time ago this (or at least something like this) was my primary. Would I trade on the SP only, maybe it would be still my primary... It just doesn't line up with the other markets, so I switched to an alternative, but that's just me.

Depending on the type of wave down there might be additional 4-5 waves to slow down this fall, but that won't change the overall picture (much).

scott said...

david - I've explained everything or linked to explanations. No one seems to want to do a little work? Like the Vol Osc info from Terry. Posted it AND A HISTORY OF HIS WORK a couple of times.

And whats so great about chilling? If you saw your mechanic taking a hammer to your engine block would you be CHILL? lol If he was teaching auto shop and your kid thought that's how to fix stuff, would you chill?

I closed 80% of my shorts on 1/15 and then the rest yesterday - today I went 25% leveraged long
but I have mixed feelings as the signals are very tenuous and unconfirmed across all of the indicators. You have to follow the data though so I had to take some sort of position. See link below for my positions as of close today.

More down side is coming but this cycle is scheduled to end on 2/3 so a swing trade long possibility.

This chart shows the possible rally high - 1925ish. I doubt any higher but we'll see. One day and data point at a time!

http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&st=2015-07-02&en=today&id=p94149003496&a=406333442

There will not be a sustained rally unless the Vol Osc in this chart (macd 19,39,1) spikes above
the zero line - look at the beginning of Oct for an example. Also the 5 day trin is falling and I would expect equity upside to be limited as it approaches .8.

http://stockcharts.com/h-sc/ui?s=%24NYUD&p=D&st=2015-09-21&en=2016-01-21&id=p39879568012&a=367854604

Positions: https://www.flickr.com/photos/75188609@N07/24418201212/in/dateposted-public/

Bicycle said...

Chicago Fed National Activity Index

Bicycle said...

St. Louis Adjusted Reserves

scott said...
This comment has been removed by the author.
scott said...

yesterdays buy signals confirmed by renko BPSPX -
Short Term! will add to longs today if other indicators look good.

http://stockcharts.com/h-sc/ui?s=%24BPSPX&p=D&st=2015-02-15&en=2016-01-22&id=p50431699302&a=408867296

Hugh Jazole said...

Short term is the key. Anyone long here has a bigger pair than I do, when this turns it will be fast and violent.

scott said...

not looking like this rally has any strength...$NYHL got overbought really fast so this is probably a fake out bottom like Aug 24 but this time we will likely have a lower lower not a dip buy save.

Hugh Jazole said...

Quote of the day. "Once the market beats the buy-the-dip mentality out of every man, woman, and algorithm, we’ll have a shot at higher prices"

Christian Gustafson said...

If we still have a 5th wave ahead and new (final?) high, then we might look at the opening 3 weeks of 2016 as a bluff and pushing back from the CBs outside of China.

The Fed is tightening, the ECB has been standing pat, and even Japan said they were done easing.

So the CNY plummeted and so did Chinese equities. Xi Jinping was put on notice that he would have to tap China's foreign currency reserves, defend the Yuan, or risk losing control of the situation (and vital stability in China).

Since his statement yesterday, reaffirming China's position against devaluation, only now do we get pledges and friendly talk from the other CBs.

They weren't just going to sit by and let China use that pile of cash to buy all the world's gold and San Francisco rowhouses (better than gold).

They must spend it to keep the wheels a turnin', until the situation is truly hopeless and they adopt plan B.

scott said...

Hugh - higher prices in 2020.

much lower prices through 2017

maybe as low as 5000 dow; 600 on spx

bank on it now! buy your PUTs on sale. But wait. If you order now you can LEVERAGE YOUR PUTS FOR FREE! lol

scott said...

The 5th wave bedtime story that will not die!

scott said...

by the way Hugh - when this turns it will be telegraphed and my longs will be in the money the way my shorts were WAY IN THE MONEY all the while I was being warned and warned again by those who will not learn what is real! Feelings, fear and conjucture are not real. Dare I say it? Thoughts are not real!

http://stockcharts.com/h-sc/ui?s=%24NYHL%3A%24NYTOT&p=D&st=2015-01-07&en=today&id=p72498577148&a=436804668

scott said...

another cogent reason for going long yesterday...

Wednesday Odd lot short sales (bets against stocks for fewer than 100 shares) jumped to a new record, exceeding the prior record from August 24.

scott said...

Hour and two hour charts are showing break downs. Got overbought really fast today. Not sound. Stll the trade was good for about 1.5%. Not a bad day's work.

Went to cash. Monday will be an important day.

Bryan Franco said...

Anyone here from the Detroit area that listens to the Paul W. Smith show? Here is a link to a radio interview I did on Thursday morning commenting on the recent market tumult:

https://audioboom.com/boos/4088372-bryan-franco-vp-of-asset-management-for-cig-capital-advisors-on-investing-1-21-16?t=0

Bicycle said...

Existing Home Sales

Bicycle said...

R2K Volatility

scott said...

https://www.flickr.com/photos/75188609@N07/24315913470/in/dateposted-public/

short again 25% with leveraged long 25% gov bonds

revisit or break 1812 by feb 3? we'll see...

Christian Gustafson said...

Today is October 10, 2011.

We are headed back up to resistance @ 2077 SPX.

Hugh Jazole said...

Took my first long position since August this morning. Let's wrap this bull up and put a bow on it.

Christian Gustafson said...

Hugh, if we hold up here and late 2011-2012 is the template for a final rally, things could slow way down here, and this could take until mid-July to finish up.

After all this volatility, it would drive everyone nuts, of course. But it would also give us a tape with volume tapering off to almost nothing, and a cluster of Hindenburg Omen warnings before the event.

Bicycle said...

We can still have plenty of volatility--

1. AAPL beats EPS, but slashes forward guidance = broader market down at the open
2. FOMC goldilocks = back up 30 handles or whatever
3. BABA earnings china proxy Thurs = back down 30 handles
4. It's Friday, let's ramp 30 handles in the morning for no reason then sell it back down into the weekend

Christian Gustafson said...

Jeez, could you be any more jaded, Bicycle? What has following this crazy market done to you?

Many wave-counting types see the decline from 2081 to 1812 as a "wave 3" -- the .382 retrace of that is nearby @ 1914 SPX.

Re the Fed this week, I'll stick with my theory that the CBs have all been waiting for China to dip into their FX reserves, and now that they have started doing so, the CBs can afford to strike a dovish and helpful tone again.

scott said...

animal spirits! "a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities." - Keynes.

As with so much of his analysis, the "animal" has been turned on its head!

Traheron's translation had two other "spirits: Vital and especially, NATURAL?

So, spontaneous (uninformed) urge to buy at this point? or sustainable "natural" calculation taking spx to 2077? (No new high or inevitable 5th CG?)

1909 spx or 190.76 SPY needs to be cleared before an animal frenzy drives a move. INDU looks to be driven by oil and Pharma and those have been unreliable of late...

http://stockcharts.com/h-sc/ui?s=SPY&p=60&st=2015-12-18&en=today&id=p74670129476&a=431491677

yesterday, the reason I hedged my positions with leveraged treasuries was because of the possibility of some "animal" urges today what with the fomc liturgy being uploaded for the fearful.

http://stockcharts.com/h-sc/ui?s=%24VXV%3A%24VIX&p=D&st=2015-09-26&en=today&id=p11212957433&a=429622149

Massive HS still in play on NYA - No weekly buy signals.

http://stockcharts.com/h-sc/ui?s=%24NYA&p=W&st=2012-11-22&en=today&id=p68836180542&a=429428877














scott said...

wait for it...2077, er, I mean 1877...lol

1896 crucial to the faithful here

scott said...

HFT blastoff from 1896! Price has been discovered! can they break 1909!

Hugh Jazole said...

http://iknowfirst.com/stock_market_forecast_chaos_theory_revealing_how_the_stock_market_works


Bicycle said...

I'm not jaded I'm right so far LoL

#1 down, come on Janet

scott said...

zero sum gamers line up for your quota of ZEROS! Futures are beginning the early distribution of allotments...

Hugh Jazole said...

Scott, you're quite the entertaining fellow.

scott said...

man that was a massive Zero sale. who knew there were so many people interested in holding empty space!

humans are suffocating in airless narrative! DAVOS! Kevin Spacey actually said acting is a humanizing profession because he has to be someone else...

HE DOESNT KNOW THAT HE IS PRETENDING!!!

But that's the key to human brain damage. FEW if ANY know they are PRETENDING!

1896 is...well, you know!

Bicycle said...

wow I was really sweating that #3 in premarket, but look at that epic reversal....

scott said...

1868 on our way below 1812

the zeros have been distributed and now comes the summation of the winners and losers!

scott said...

will probably add shorts again - as of now I am still 25% leveraged short and 25% leveraged Treasuries

you know, everyone cries and moans that this market can't be traded. I'll post my actual dollar gains since Nov. Maybe it will open your eyes that there is another way to approach things.

fear is not a strategy

hell, strategies are not strategies! lol

Bicycle said...

the line of defense at 1812

Christian Gustafson said...

Going all the way to SPX 2077 any time soon is way too optimistic.

But ... the topside of this channel is about at 2030 SPX next Friday. That could do as a near term target. That would be a really deep retrace of the swoon since EOY 2015 and throw a lot of wave counts into chaos.

If the W1 from 1074 to 1422 is our rough model, then its 348 pts would target 2160 SPX, again in the mid-July time frame. This would not reach the upper edge of the megaphone shape on SPX, i.e. up around 2185 to 2200.

scott said...

80% chance this "rally" IS OVER - in any case the absolute highest this could have gone was 1928 and there is no hope of that now. Regression data says this move is topped out - have some interesting bottom cycles coming up but those don't mean so much in a developing downtrend of this type.

CG, how many targets of yours have to die in the sunlight before you change your guesswork? Before you actually review strategies that have proven track records?



scott said...

so these mini ramps we've been getting as "saves" are just micro-china manipulations where the exchanges "break" during which buy orders are still filled but sell orders canceled...

http://www.batsglobalmarkets.com/us/equities/notices/80652/status/

free markets freely managed by those that own them

Hugh Jazole said...

Wild swings in my TIP ETF the past week. That is very unusual, somebody knows something.

Hugh Jazole said...

"80% chance this "rally" IS OVER - in any case the absolute highest this could have gone was 1928 and there is no hope of that now" LOL!

Christian Gustafson said...

Again, take a look at the period from October, 2011, through April, 2012. We exited a period of extreme volatility with a big bounce (breaking out now), a drop back to support (this March), and a long slog upwards to a high.

A comparable tape now gives us that slog from March-July. The Fed is spooked and won't hike again, while other CBs play out whatever tricks they still have left.

When this thing is finally out of gas, we get a fall crash back to the long-term trendline up from the 1987 (year) lows.

David Stockman will be apoplectic if we ever break north of 2100 SPX again.

Hugh Jazole said...

It would be nice to see the market in complete shambles around election time.

David Does said...

small stick save care of Bank of Japan, for how long, maybe they can pump it to 1940, maybe more, crazy "markets".

scott said...

lol all you want Hugh, the regression data will crush this little move - my bond hedge at 1.2 leverage is working just as it is suppose to to deal with immature emotional "traders" trailing the HFT's creating this "bottom". The knife is going to be sharp as it falls...

My bond position is up 1.5% today so the offset is as it should be and the fact that bonds are not buying this equity move is important:

(do yourself a favor and actually LOOK at the chart this time! ROFLMAO!)

http://stockcharts.com/h-sc/ui?s=JNK%3ATLT&p=D&st=2015-03-02&en=today&id=p95749395794&a=427439031

this is a version of the "confidence" indicator that Barron's publishes.

Anyway, Hugh, ARE WE ANYWHERE NEAR 1928? I don't get the emotional nature of your senses. What you think is real isn't.

1908 is an algo trigger for longs but only at the close - so watch that today. It will be a miracle if we close above that today. If we do, there might be some carry over to 1928ish but, again, the regression data is not going to allow this to move much more and neither is the 5 day trin.

THERE IS A RISING BOTTOMS PATTERN ON THE NYAD Vol Osc but it comes after a period of NO CASH BUILD UP which means the cycle is forming a short term "T" that will fail (left translated).

http://stockcharts.com/h-sc/ui?s=%24NYUD&p=D&st=2015-09-23&en=today&id=p28268854797&a=367854604

My GDX mechanical system gave a swing buy today - I will probably by-pass all the equity silliness for a few days and move into some mix of Lev bonds and PM stocks. DO YOURSELF A BIG FAVOR AND REVIEW THIS CHART - it can make you 10% or more on short term swing trades! You wont look at it though, will you. Too EMOTIONALLY invested in playing a video game with the masses.

http://stockcharts.com/h-sc/ui?s=%24BPGDM&p=D&st=2013-10-14&en=today&id=p17823416005&a=424527603

Hugh, enjoy your emotional victory. Watch it fade as the day goes on? A trading victory for you, or just more ZEROs being distributed to those who will never learn.

As I said I will post my net dollar gains from November as of today's close. I could go to cash today and still beat the market this year and, of course, you and CG certainly.

Hugh Jazole said...

I also own bonds, though VFISX and TIP as mentioned above. LOL X 2!!

scott said...

SO LAUGH all you want, HUGH, X infinity! Post your returns from November when I started to post my trades.

If you want to point and laugh in the shower room, share the size of your package as well! ROFLMAO with prejudice! LOL

And as for TIPS, well...I wouldn't brag about holding those since NOV. and certainly not since the end of 2012! ouch I say!

5 points away from 1928 now Hugh...can they make it?! HA!

Hugh Jazole said...

The next order of business is to get the VIX under 20. It's holding firm so far.

scott said...

the vix like the Vol Osc and the regression data says this move is almost, if not already finished.

cycles are failing, not improving. the knife is sharp Hugh.

scott said...

dos mas Hugh!

Christian Gustafson said...

Let us know when you cover your shorts, smart guy.

Maybe you'll have your own green candle from it.

scott said...

CG - I covered most and posted when I did it. It is TOO BAD YOU CAN'T READ, smart guy! lol

I posted my current positions the other day when I took them, hedging my 25% remaining shorts with Leveraged Treasuries. You are a silly ass. NET RETURNS are what matter. DO YOU HAVE ANY POSITIONS AT ALL CG or do you just flap your insane unsupported claptrap? One days excitement over NEGATIVE INTEREST RATES in Japland and you get all saucy like a teenage girl! WOW!

I was going to post my dollar returns since November and include my probable small loss today but I'll post them now as of yesterdays close just to shut your ignorant mouth.

https://www.flickr.com/photos/75188609@N07/24666237766/in/dateposted-public/

I believe the attached shows a 14.5% rate of return since Nov 1, 2015! I will probably only be at 14% at the close today. OH WELL! ROFLMAO! During a time when most lost 12-20%! Or worse, followed your blog and stayed long thinking NEW HIGHS WERE COMING!WOW!

I told you when you were censoring me that you are dangerously incompetent and should close this blog. I reiterate that advice.

Hugh Jazole said...

"If you want to be an asshole, Daneric's Elliott Waves may be better suited to you." Who needs Daneric's?!

scott said...

If you want to live in an illusion with nice manners, keep sniffing CG's droppings!

Hugh, I showed you mine, now show me yours!!! LOL X infinity! WOW, human culture is just various reiterations of High School, over and over and over.

Christian Gustafson said...

Hit the road, scott.

You are vulgar and no longer welcome here. Flies of the marketplace.

Hugh Jazole said...

Mental illness is a hell of a drug.

Bicycle said...

<a href="http://thedaydestroysthenight.tumblr.com/post/138296768377/real-disposable-personal-income-percent-change>Real Disposable Personal Income</a>