Tuesday, March 28, 2017

Late April to complete the bearish wedge

SPX 2322 was about a 24.8% retrace of the leg from 2083 to ~2401 on the S&P 500, enough for a wave 4, which, if completed, is drawing a very bearish wedge up here in the ether.



This week we need to reach resistance at 2390 SPX on Thursday and chop around for another week, back to support, setting up an inverse head & shoulders for the final high.

SPX 30d

Again, once our situation is obvious to all the players, equity markets will quickly go bidless and collapse in a matter of weeks.  Desperate doomed pension funds will pump up the volume.

SPX 2Y

Tuesday, March 21, 2017

Vive Le Pen

It would appear that we are in a larger degree wave 4 than we had suspected, correcting the leg on SPX from 2083 to almost 2401.  This wave should run into next week, roughly toward the end of March, retracing to support near the .382 fib, around the 2280 level SPX.

Marine Le Pen, you're our only hope

Then we can look forward to some sort of political fix with Trump and the GOP, animal spirits, and a rally to finish the mess.

SPX 20D

The shape of the final rally, into the French elections.  Vive la majorit√© silencieuse.

SPX 1Y

Marine Le Pen elected Maximum Leader of the France will of course save that country from demographic peril, at the cost of Europe and the worldwide ponzi credit money system. 

Again, the Fed will CUT in June, as a desperate attempt to staunch the bleeding.  It will only trigger a vicious short-squeeze and halfway-back bounce.  

Then the crash resumes in earnest, and we re-test 666 on the S&P 500.  

New QE rolled out in September.

SPX 2Y

Thursday, March 9, 2017

Beware the Ides of March?

Short-term SPX is looking at an expanding-wedge pattern that could blow-off upward in a very violent fashion.



This would reach resistance at 2440 as soon as late in the session Tuesday, like so:

SPX 60d

The response post-FOMC and renewed fiscal crisis, looks like this:

SPX 2y

And the long term count since the 2009 (year) lows:

SPX 10y

Friday, March 3, 2017

Friday, February 24, 2017

The worst possible situation

Only when you have passed over into chiliastic analysis, can you see the worst outcome that is possible in this world.

In my opinion, this would be complete chaos in Fed monetary policy, including possibly a series of rate hikes and cuts in mad succession, a collapse in confidence and mad panic for hard money that would complete the very-long-term "Jaws of Death" pattern before Thanksgiving.

SPX collapse

Wednesday, February 22, 2017

A large gap down is not out of the question

We have a good setup for an island top here, gapping down overnight on the S&P as low as 2340, bouncing, and continuing south.



UVXY knows something is up.

SPX 2Y

Wednesday, February 15, 2017

UVXY knows ... we have got to test the Election lows

VIX and the volatility ETFs are screaming halt!  Will the market follow?



Yes, it will.  And the Fed will cut rates in June.

SPX megaphone with Trump throwover

Thursday, February 9, 2017

Blog magic is real

I mentioned Larry Niven and Jerry Pournelle's classic cosmic disaster novel Lucifer's Hammer the other day, and what should greet me at my local Value Village last night, but a first edition of the same, with a DJ already protected in vinyl!

Niven and Pournelle, Lucifer's Hammer, 1st ed, Playboy Press, 1977

Abebooks has this at $70 to $100, probably toward the low-end as mine has a couple of chips out of the jacket.  But I paid $2.99, so I am pleased with the exchange.  Bicycle's copy is nicer, but I paid less than he did.

Wedge is looking good up here in the ether -- here's my local count.  Janet speaks a couple of times during RTH next week, could be a good time if she decides to shank the Donald.

SPX 60D

And the larger, doom count for 2017:

SPX 2Y

Saturday, February 4, 2017

Books: Killing time until the next cycle turn

Even while the market bumps along waiting for the next cycle turn window, I'm still busy buying books.  I'm the guy in the pulp disaster novel Lucifer's Hammer who preserves a precious cache of books in his septic tank before Hammerfall, only I'd prefer to skip the tank if I can.

So what's new on the shelves these days?

R.W. Tabor & D.F. Crowder, Routes and Rocks in the
Mt. Challenger Quadrangle
(with map), The Mountaineers, 1968
American Alpine Club (Fred Beckey), Climber's Guide to the Cascade
and Olympic Mountains of Washington
, AAC, 1961

Bob and Ira Spring, Camera Adventuring on
Mr. Rainier
(boxed), Superior Publishing, 1955

Karl M. Herrligkoffer, Nanga Parbat: The Killer Mountain, Knopf, 1954

Colin Fletcher, River: One Man's Journey Down the
Colorado, Source to Sea
, Knopf, 1997

Hiram Bingham, Lost City of the Incas, Folio Society, 2004

James Dickey, Deliverance, Houghton Mifflin, 1970

F. A. Hayek, eds Bartley & Kresge, The Collected Works:
The Trend of Economic Thinking: Essays on Political Economists

 and Economic History, Chicago, 1991

Thorstein Veblen, ed. Max Lerner, The Portable Veblen, Viking, 1950

Michael Lewis, The Money Culture, W.W. Norton, 1991

Alexander Solzhenitsyn et al,  From Under the Rubble,
Little, Brown, 1975

Alexander Solzhenitsyn, Rebuilding Russia: Reflections
and Tentative Proposals
, Farrar, Straus & Giroux, 1991
Oswald Spengler, The Hour of Decision, Part One: Germany
and World-Historical Evolution
, Knopf, 1934 1st ed
Donald R. Dudley, The Romans: 850 B.C.-A.D. 337, Knopf, 1970

Edith Hamilton, The Echo of Greece, W.W. Norton, 1957

Epictetus, Discourses, Fragments, The Encheiridion, Harvard, 1998

Francis Gies, The Knight in History, Harper & Row, 1987

George Ivan Smith, Ghosts of Kampala: The Rise
and Fall of Idi Amin
, St. Martins, NY, 1980

L.H. Whittemore, COP! A Closeup of Violence and Tragedy,
Holt, Rinehart and Winston, 1969

Arnold R. Hirsch, Making the Second Ghetto: Race and Housing
in Chicago 1940-1960
, Cambridge UP, 1983

Charles Moore, Daniel H. Burnham: Architect Planner of Cities,
2 vols 1st ed in slipcase, Houghton, Mifflin, 1921

some sci-fi pulp mags

C.A. Marchaj, Sailing Theory and Practice,
revised ed, Dodd, Mead, 1982

Thursday, February 2, 2017

Coupla' weeks

... until the next window for the market to get interesting again.


The next 4 years are going to see so much crazy winning with the Donald Trump.  Ronald Wilson who?  And then 4 more.

Well, here's the plan for 2017 at any rate, sort of a silhouette of Mt. Redoubt in the North Cascades.

SPX 2017 support & resistance & doom

Tuesday, January 24, 2017

Well we have to post something

More patient waiting, waiting, seeing trendlines converging for another candidate top into February opex.



By the terms of this blog project, we're obligated to make an effort to figure out just where in the hell we are.  An ending-diagonal pattern would take a few more tedious weeks to finish.

SPX 60D

After that, they're serving volatility -- violence, up and down -- for the rest of the Spring season:

SPX 2Y

Friday, January 6, 2017

The real question for equity bears is when the Fed will cut, not hike, rates

The Fed has promised hawkish policy and a series of aggressive rate hikes in 2017, presumably to counteract the inflationary fiscal policy from the Trump Administration.  Never mind that the larger project to dismantle globalism is profoundly and probably permanently deflationary.



We can expect one rate hike at the very least, as well as the very most.  This would be the third hike since December 2015, and arguably the one to tip the precarious balance in the equity markets.  Let's suppose the Fed members take a pass at the next meeting, in a few weeks, agreeing to wait to see what policy initiatives Trump and the GOP Congress can muster.

Let's suppose we see our next hike at the larger FOMC meeting in March.  There's your spark.  Never mind what was said in December -- that's it, we're one and done for 2017.

We're off to the races.  Solid support is at 1620 on the S&P by about mid-June.

SPX 2Y

Equity bears that are still among the living today should be asking when the Fed will next cut rates, i.e. when the members will see the face of raging deflation, the oncoming recession, panic, and reverse course.  I propose that we see this as soon as the June FOMC meeting, a desperate effort to restore confidence, animal spirits, inflationary expectations, credit expansion, earnings multiples, home equity loans, social media start-ups, 10-year auto loans, good vibrations, the works.

We'll get one hell of a surprise, and an epic bounce in equities, that's for sure.  Almost to a .618 retrace.

After that, we can look forward to the 10Y Treasury yield making its final lows at 1% or even below.  Rates have not broken out of the Volcker bond-bull channel just yet.

10Y Treasury since Nixon

Short-term, we're looking to tag the 2300 level next week, before a pull-back into mid-February.

SPX 20D

But it will be the rate cut, not the rate hike, that marks the end of the epic reflation rally and a prelude to a fall market crash that will humble 2008.  That's when the Fed shows how desperate and powerless it is at the end of the long-credit cycle.