Thursday, January 7, 2016

Last call for new highs or any kind of optimism

... would be something like this, I think.  We would bucket this as an ascending broadening wedge.


What I want to see:

  1. Penetration of the SPX daily upper Bollinger Band
  2. A touch or close brush with the SPX weekly upper BB
  3. Divergences -- breadth, volume, etc.
  4. A string of Hindenburg Omens and other signs of market internal instability
  5. VIX and volatility front-running and leading the decline, instead of trailing it
  6. Touches of the lower daily BBs for VIX and volatility ETFs

There's also that 30pt gap overhead in the SPX daily chart.

The surprise China decline, if it is halted here, gives us a lower trendline that sets up perfectly for a kissback in March and a crash to the 1600 level.

GLTA ...


christiangustafson said...

i.e. all we are seeing in this cycle is overnight chaos in USDCNY and USDJPY, with mechanical follow-through on the futures and equities.

I'll change my mind when China is LLD 7% overnight and so is /ES.

Trading Sunset said...

I refer you to the Transports.. or any of the other world equity markets... esp' Spain, UK, Germany, France, Japan. The list could go on.

We're done. Finally.

The only issue in my view is whether this is an 'omg, major collapse <sp'1000'.... or just a correction to 1600/1500.

If you assume at least the latter, then the obvious question is whether the US Fed would launch QE4, and market implications of that.

Regardless.. enjoy the entertainment.

Unknown said...

I remember a certain someone saying, "We're NEVER going below 1500."

Unknown said...

Careful CG, you're going to summon Scott from his dungeon again.

scott said...

hole, Hugh. it's a hole!

yeah, the left brain narrative says: NEW HIGHS!

at least the new fanciful roadmap doesn't have any EW on it (for we all know how that 5th wave worked out).

Human neurology is incapable of seeing what's real. It is in the grip of Evolutionary Brain Damage made worse by epigenetic translations of repeating culture.

Hell humans prefer fictions of every kind. Makes them think there is free will that lead to outcomes.

David Bohm in conversation with Krishnamurti

There is real physical, chemical damage to the
brain cells and those damaged brain cells will produce
thought that is inherently distorted. Therefore, as
thought tries to correct that damage, it does so from
a distorted brain.

Hole is my home or why do I roam in the open?!

the brain damage must be healed from sitting still with your heart and observing the
rising of all the conditional and conditioned aspects of your fictional "mind".

scott said...

so Hugh, I'm curious, since I said yesterday that there was a VERY REAL CHANCE of free fall collapse, what will convince everyone that we are in the throes of such?

watch the leverage unwind! it will be a beautiful thing

Depriv said...

Where we see only two ways, the market will surely find a third one...

38.2 is around ~ 1600 (starting from 700), till that breaks it's still ok for a simple fourth.

It can be even a smaller tf fourth to 1750. Then new high (I admit 2300 looks pretty stupid right now), 1700 again, 2500 (madness, indeed), then 600 to restart.

Would be just an impulse from 700, exactly by the book.

Since it would be a fifth wave on the biggest tf, the followup would be even more devastating than your 'clean' fall :-)

scott said...

More EW! the narrative that keeps on giving!

trust me I am not working off a notion of DUALITY! infinitely dynamic responses are not going to change


your wave 3 is apparently another mans 5th and that is Denaric's wave 2. so forgive me for just following this:

Unknown said...

Scott, I'm a fan of pessimistic philosophy. I'm a huge Lovecraft fan, especially his non-fiction essays. The human animal needs fictions to to justify its existence.

scott said...

Hugh - yes the human brain has "evolved" but that evolution is a genetic mutation of various epigenetic distortions (and dietary perversions) that have built in anxiety such that fiction ,or escape of one kind or another, is the only cultural "fix".

there is healing available but not through cultural attachments or external manipulations

sitting still without intention

as Chuang Tzu says:

Do not try to make things happen. Do not think you know
anything. Let your spirit be vast and walk where there
are no paths. Be grateful for all that heaven has given you,
yet act as though you have attained nothing.
Be empty, that is all.

Unknown said...

So long 1930.

christiangustafson said...

Hugh, please clarify, is that a level on the S&P 500, or a year?

PBOC on deck tonight; rumors out there of a free toaster for opening a passbook savings account with CNY500.

1938 LOD, only need 200 handles now for my 2138 target in a month. Piece of cake.

Unknown said...

Sorry about that, I was referring to the S&P.

Unknown said...

Check out this exchange from Caldero.

miteaswellwin says:

Hi Tony, after PIV ended I think you were originally labeling what you now have as intermediate waves as major waves, then switched when intermediate 5 failed. Any thought that you were correct the first time and it was a major 5/PV failure and we’re now in C2? Thanks

johnnymagicmoney says:

good question Tony………………we readjust after the fact and I get that but can you state why it cant be a failed 5th?

tony caldaro says:

never seen one, of this degree, before

ruff times said...

The right side of my brain is saying I'm losing but my left is saying I'm winning. Bears thrown on to wall and shot by Bull gestapo for seditious attempt at calling Bull rally over. Short the snot out of 2020

christiangustafson said...

2020 won't close the gap on SPX.

I'm serious about 2138 in month. It all fell in place today. First bounce off the true top is at 1820, which sets up the head & shoulders to 1500.

It's going to be great!

Unknown said...


I still can't see a new high. However, I do see a run at the 200 day ma and then a rejection from there. That would be a run to about 2055 on the S&P that would fill the gap on the daily chart.

We are seeing similar things on the chart but, I just don't see as strong of a bounce. A bounce should still bring the VIX down a lot. Our opportunity to pick up puts for cheap before a big move down is likely coming at long last.

Unknown said...

A lot of people are saying we had a failed fifth @ 2116.

scott said...

failed fifth, mushy second or timid

JUST FOLLOW THE DATA and trade in the moment.

Caldaro missed 2000 AND 2007 just as everyone here is missing what is happening because they are hung up on roadmaps (narratives).

You're post saying it all came together for you yesterday is HILARIOUS. I laughed so hard I had to come out of the hole.

try this:

touch the heart-mind and find Zanshin so you can see what is necessary in the momment

Unknown said...

Meditation? Meh, I'd rather take a nap.

Unknown said...

Folks, we're toast. Period!

Unknown said...

scott said...

Nap away Hugh baby as CG rewrites his new high narrative once a week for months on end. Your reality is real regardless of the internal narrative. The sad part is that that reality is for you and you alone and only through direct experience can you have the insight. But naps and cell phones it is!

The myths proliferate in your narrative consciousness and PERCEPTION becomes impossible as a material function of a distorted and disconnected body.

Perception is simple - stories are difficult.

Simple chart says no bottom yet:

scott said...

the unique coppock setting on this simple chart indicates that another break like in Aug 15 is VERY PROBABLE...

Unknown said...

I agree Scott, we've got a flash crash on deck.

Unknown said...

i like your charts scott do you have a public site on

scott said...

this somewhat more noisy chart simply shows that SPX has entered the bear market with virtually every other equity asset class

scott said...

David I come out of hiding every so often and post like this just to shake up the status quo - So no public charts...

scott said...

now this is a more complicated projection using Money Flow highs and lows. A guy named Parker Binion came up with this one in conjunction with a guy named Terry Laundry. Anyone interested in actually understanding Money Flows and asset price cycles should look these guys up! Terry died july 2012.

the money flow indicates a possible tradable SHORT TERM bottom on Feb 3rd

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

Tank into the close, flash crash Monday. BPSPX tells all.

Unknown said...

scott do you have a downside target for this leg down? thanks

christiangustafson said...

Why on earth would we flash crash here, when we haven't even topped?

Now you have forced me to place my top target 44 handles SPX even higher.

Depriv said...

C'mon! It's just a puny C/iii down.
Some 60 points or so and it'll pass.
There wasn't even a decent panic yet.

christiangustafson said...

This tape is screaming now for the 2182 level SPX. Today cleared up all doubts and uncertainty on this.

scott said...

CG - obamacare pays for therapy?

scott said...

I thought yesterday was the for certain uncertainty remover!

New Highs!

It would take a miracle of alien prophets to keep this triggered HS from playing out.

Unknown said...

BPSPX fell over 3% right near the close, 10% for the day. Monday will be quite interesting.