Friday, January 1, 2016

We are due for a RYFO rally to start 2016

UVXY was the tell on New Year's Eve -- there is still no fear at all.

I think the market still has a savage burn ready to go comparable to the one we had coming off the August 24 lows.  All shorts must go!

SPX 01-01-2016

A sharp decline over the rest of January will setup a beautiful head-and-shoulders that will send us hurtling toward 1600 into mid-March.

After that, it's every man for himself, and NIRP for all by June.

SPX 01-01 2Y

The Fed will panic and go all-in.

Cheers to a good 2016.

47 comments:

Christian Gustafson said...

First! We'll see if anyone notices this little post buried beneath the book thread.

scott said...

http://www.businessinsider.com/r-investors-look-to-january-effect-at-start-of-2016-2016-1

so now the Post Santa Apologetics begin! lol NEW HIGHS!

Not

Christian Gustafson said...

/ES opens up 7. A good start.

Hugh Jazole said...

How bout them futures?

scott said...

red could be the new green...

observer1357 said...

Hi CG,

I'd be a little cautious about calling for new highs. I've been reading your blog for a while. I don't know if you remember me from Ticker Forum. I posted to your threads on a number of times. I stopped posting before the "purge". Karl disgusts me with his childish behavior.

Anyways I don't really see a new high coming at this point. However, I thought the market high was back around 1400 for the S&P. So take it FWIW. I do want a bit of a rally for the first couple of days the new year. I like my puts to be cheaper to make money on the way down ;). So a small rally to bring the VIX down a bit would be good for me.

observer1357

Christian Gustafson said...

Interesting ... if the lows hold here, this actually looks like a terminal move on the hourly /ES, so I would not be surprised if we are green again in the morning.

Welcome, observer1357! Good to see you.

We leave ol' Karl alone these days.

scott said...

o NOOO mr bill!

2000 is toast tomorrow.

http://stockcharts.com/h-sc/ui?s=%24NYUD&p=D&st=2015-08-06&en=today&id=p13101724459&a=367854604

a mild bounce at 1950 before the fall

scott said...

so let's put the new high mantra to bed?

Hugh Jazole said...

Scott you deserve a round of applause. It does seem like something bigger brewing beneath surface. We really shouldn't be losing 1990 here, but that looks like a done deal.

Bicycle said...

Well we have now broken below trend on the supposed bull flag with the move this morning, at least on the DJIA.

What a surprise, it wasn't going to ever be that simple.

We're also now sharply below the lower bound trend from the late summer '15 lows and thru the lower BB as well. Just an ugly, ugly open.

Also extremely bearish gaps down on anything tied to China. Bearish pattern resolutions on those individual names as well. Woof.

Hugh Jazole said...

Pretzel's latest chart isn't too far removed from yours CG, save for the new high. Looks like our January call that we've had for some time is shaping up nicely.

scott said...

http://stockcharts.com/h-sc/ui?s=%24VIX&p=D&st=2015-10-27&en=today&id=p38108756894&a=428878359

Everyone keeps ignoring the VIX and claiming NO FEAR. Well with the multiple sell signals and the HISTORIC basing NO FEAR = clueless.

There is so much else as well not the least of which is sheer institutional fraud that is now ready to turn to outright rape.

scott said...

http://stockcharts.com/h-sc/ui?s=%24BPSPX&p=D&st=2015-01-24&en=2016-01-04&id=p25132567646&a=408867296

the most ugly set of data since 2007

Huge signals triggered on the Bullish Percent

Hugh Jazole said...

Yeah Scott, the BPSPX is not happy this morning.

scott said...

I see china is the news trigger. lol

scott said...

you know though Hugh, I've been posting that same chart for weeks now saying it was screaming warnings

scott said...

tesla - 8% ha!

what really gets me is how EVERYONE has wanted to participate in the frauds thinking that debt can be wealth and endless war, peace.

narrative fictions of evolutionary brain damage.

of course there is nothing wrong with carrying worthless assets on balance sheets rather than marking them to market. of course there is nothing wrong with front running HFT. of course there is nothing wrong with giving free "money" to corrupt and insolvent TRUSTS that were supposed to protect saving, not promulgate debt.

good god - NEW HIGHS!

Hugh Jazole said...

Scott, do you think there will be a C higher near term? Forget about "new highs," just up from here before heading much lower?

scott said...

I've said that once the panic hits in this initial drop we will probably, not certainly, get a crash below august.

Clearly SOMEONE in the criminal enterprise is defending 2000 but not very successfully or even that aggressively. Just enough to once again unbalance the zero sum seesaw, so the fools fly off with their hope. lol

Technically, the Vol Osc I am always talking about and the MF are conspiring with the Keltners to maybe give a bounce around 1950.

http://stockcharts.com/h-sc/ui?s=%24NYUD&p=D&st=2015-08-06&en=today&id=p76434484999&a=367854604

What is VERY INTERESTING is how the trin is behaving today - the fact that the 5 day trin has yet to fall and price is falling hard foreshadows the true magnitude of the next potential leg down...

now:
http://stockcharts.com/h-sc/ui?s=%24NYHL%3A%24NYTOT&p=D&st=2014-07-16&en=today&id=p89152352355&a=436804668

then:
http://stockcharts.com/h-sc/ui?s=%24NYHL%3A%24NYTOT&p=D&st=2014-07-16&en=today&id=p48191038274&a=436804668

everything that made 07 a disaster is magnified by a factor of 10



Hugh Jazole said...

The reversal on the dollar is pretty incredible. What are the short term implications though?

scott said...

what everyone should be thinking about is the LEVERAGE created by the failing junk bond market, the worthless cdos, LBOs, new multiples of tranche debt...the financed housing market.

Not only have the indexes been kept "alive" by fewer and fewer stocks. The NUMBER of shares of all stocks (or the float) has been reduced by LEVERAGED BUY BACKS.

Once selling starts in earnest, this constricted float also magnifies DOWNSIDE.

This is going to be epic.

scott said...

Ha! even hacks like Futia have given up the new high chant and he has my 1950 target as "support".

SUPPORT! mild speed bump

scott said...

http://stockcharts.com/h-sc/ui?s=%24XJY&p=D&st=2015-07-17&en=today&id=p44459562394&a=438980213

launched above 233ema

scott said...

a nice break of 1989 could bring a close in the 1950 area TODAY.

the fear that might arouse could obviate the speed bump and then let the leverage fly?

6 points and then?

Christian Gustafson said...

Upper BB's weekly and daily SPX make new highs unlikely now ... but ...

I still think SPX 2120-2126 is possible this week into the January New Moon.

It depends on a hard reaction from today's China mess, very similar to the one off the 8/24 mini-crash. This will be our last high, though, and we'll have to count it as a "failed 5th" or some such.

Everyone see the TL we bounced off today? We've smacked it 3 times now. One more high, and I'll be happy to short in force.

scott said...

to be sung to Whitesnake - Here I Go Again

here we go again down that hole
that the fed and Bernie plugged so long ago!

it wasn't fun the first time we know...

but we made up our minds
just to waste all our time

so here we go again!

scott said...

next leg down on tap

http://stockcharts.com/h-sc/ui?s=%24SPX&p=M&yr=20&mn=1&dy=0&id=p16343336346&a=428291868

1950

scott said...

there is a lot of support at 16680 on the INDU so we'll see what happens - more than likely the surprise of downside leverage that I outlined yesterday is going to kick in pretty soon.

scott said...

I haven't completed the math behind this BUT my eyeballed estimates are pretty close so we have a trigger in play that says 80% probability that the INDU goes to 7365
within 17 months and maybe as low a 4973...

http://stockcharts.com/h-sc/ui?s=%24INDU&p=M&yr=20&mn=1&dy=0&id=p63236326080&a=439720352

Sarah Bell said...

Scott - good call on this drop!!

Bicycle said...

Ok scott I can be more bearish than that...

My personal favorite DJIA target is 2666 by year-end '17.

scott said...

ah, but Bicicleta, show your work!

my targets are fractals with firm probabilities

laugh as thou might there are some of us who actually trade for profit

scott said...

futures confirming 1950 tomorrow

left brain narratives will not alter reality

scott said...

http://stockcharts.com/h-sc/ui?s=%24NYA&p=W&st=2012-11-22&en=today&id=p89603520447&a=429428877

Christian Gustafson said...

It's a channel -- and it held this morning.

Bradley turn today. We have a month to make it to new & final highs @ SPX 2138.

We need to bang Bollingers and trigger Hindenburg Omen divergences to get a real top.

Next Bradley turn in a month, Feb 5.

I would wager that February is the next window for the China crisis, per this frightening article Bicycle sent me.

August + 3 mos = November + 3 mos = February

GLTA.

scott said...

CG you keep hope alive! LOL! The evidence is all around you. Now FEBRUARY? WTF? Is accuracy even a consideration? After this post I'll go back to my hole! BUT it is important that people LEARN what is real and what isn't if they are going to visit blogs in hope of guidance. There is TOO MUCH AT STAKE.

Now IF some of the indicators I've been posting turn then I'll go long FOR A VERY SHORT PERIOD but the ROT of shrinking float paid for by leverage and the failing junk and MBS markets is going to trump ANY traditional view of "a real top".

Here is one simple chart I've posted that will keep people on the right side of the trade.

http://stockcharts.com/h-sc/ui?s=%24NYHL%3A%24NYTOT&p=D&st=2015-10-14&en=2016-01-06&id=p99896797241&a=436804668

Now you've told me to "be careful" because new highs were coming. Of course I've stayed 80% SHORT while you waited for new highs. Now you tell me again the channel will hold and Feb will bring NEW HIGHS! WOW. Good luck with that one.

You've ignored or diminished the importance of the huge divergences in the NYA, Trans, Equal Weight SPX, Junk, VIX etc, etc.

I will cover WHEN THE DATA tells me to. I am very happily in profit while you have been waiting for this and that to come to fruition.

This is a real top IMHO. Just watch it slowly grind the narratives to dust. I am fairly certain that all OS bounces will be sold this year. I suggest all learn to read the maps available of stay off the roads.

Peace and good luck chasing the NEW HIGH.

Christian Gustafson said...

It's a simple disagreement here.

I don't think we're in a large "wave 2" move off the 2015 May highs. And if we're not, then we will need to flirt with the weekly upper BB SPX *and* throw up a cluster of Hindenburg Omens *and* some sort of NYA divergence.

Patiently waiting for the real thing. UVXY is up 8% at the moment. If we were facing real peril right NOW, it would be up 33% and relentless.

VIX futures put in a lower high on this lower-low /ES. More rally is ahead. 2138 remains the perfect top, a 1.618x extension UP of the 2008 crash.

ruff times said...

I agree CG. VIX has been very timid given all the turmoil. Looks like it proved correct as I type. If 2000 holds on SPX, I see SPY around 2100.

Christian Gustafson said...

That's not to say that this China swoon wasn't a nasty surprise. It wasted some short-term SPY calls I was holding.

You look ahead to these cycle turn dates and try to figure out where they might fit into a larger pattern. Up until Sunday night, we were close enough for a modest rally to tag Bollingers and make new highs into the turn window this week.

Well now it looks like a bottom instead, so we'll patiently move the goalposts and look for another high in a month.

Hugh Jazole said...

I can't believe how many people haven't caught on, that China is heading into a DEPRESSION! It's likely the Chinese government will become more totalitarian than ever.

scott said...

"Bottom"? "If 2000 holds"? "Move the goalposts"? NEW HIGHS!

Do any of you see why 2007 hit people so hard? Do you even have a glimmer of what I mean when I talk about LEFT BRAIN NARRATIVES?

http://www.powerofstories.com/our-brains-constantly-confabulate-stories-which-builds-a-meaningful-narrative-for-our-life

there is a SERIOUS COGNITIVE PROPLEM BEING PLAYED OUT IN THE MARKETS AND HERE ON THIS BLOG.

I know I said I'd go back to my hole (and I will!) BUT that was before the last posts that are nothing short of BLINDNESS in the face of reality.

holy cow - spx will like hit 1950 today or tomorrow but lets just move the goalpost down the road so we don't have to actually PERCEIVE REALITY! WOW AND WOW AGAIN!

there is a SIGNIFICANT CHANCE OF A FREE FALL COLLASPE HERE and most of you are hanging on to silly EW narratives.

THE DATA IS RIGHT IN FRONT OF YOU!

alright - time to seek shelter in my hole. LOL

Hugh Jazole said...

Ha, OK Scott! Were you hitting the Red Bull and Adderall this morning!? I'm on board with the bear scenario here, it does seem like an odd place for a proper top though. I have a hard time remembering the entire set up in 2007, but weren't we hitting new high after new high for nearly a quarter before the bottom fell out?

scott said...

ok Hugh I was in my hole until you called me out with the Adderall comment!

Futures are BELOW 1950 this morning.

Whatever everyone is doing, IT ISNT ANALYSIS.

As I said yesterday, the data is right in front of your eyes.

I've posted chart after chart that could keep you clued in but everyone is just trapped in their own narratives.

Now I will go to ground for good.

Christian Gustafson said...

Scott should be commended for his 1950 target on the S&P.

But why isn't the VIX above 30? There is something not quite right with this decline.

scott said...

CG - the way you view vix and uvxy is backwards. the mundane correlation of fear to asset prices isn't what people think it is. your assumption that fear has to enter before a fall is fallacious.

in any event the MACD setting 7,4,8 on the vix has been signaling a major top for several months now. You cant just look at commonly accepted correlations - they don't work.

additionally, the actually rot of the system has been well and accurately telegraphed at this point in time by many indicators -

http://stockcharts.com/h-sc/ui?s=%24BPSPX&p=D&st=2015-01-30&en=today&id=p27281695744&a=408867296

note that the unique coppock setting is about to cross the zero line - VERY BAD NEWS. the vix will catch up to this indicator I ASSURE YOU! lol

http://stockcharts.com/h-sc/ui?s=%24NYHL%3A%24NYTOT&p=D&st=2015-10-14&en=today&id=p89993052949&a=436804668

note the unique macd setting just signaled a massive sell today.

these two indicators I've been posting but your narratives just keep repeating on a closed loop, incapable of processing the truth.

oh well. that is again why 2000, 2007 hit people so hard. that is why this probable decline of 70% will fracture and wrap perceptions with unremitting harshness! lol

my hole really does miss me. good luck. I really never intended to offer tutorials in quantitative analysis!

peace

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