Thursday, May 25, 2017

At this point we're just waiting for the June FOMC

Market should be dullsville until then, slight drift up and to the right.  We're actually in a little channel that takes us up to ~2428 on the S&P 500 by the June FOMC meeting.

Go outside, watch the grass grow instead.

S&P 500 stairstep back to the 1040 level

Sunday, May 21, 2017

Is it time to test the 200 DMA?

I think so.  It has been a while since we have visited it -- the November election.  Now that it looks like supply-side tax-cut stimulus is dead, maybe we need to test it again.

The problem is, visiting the 200 DMA on the S&P 500 will have us break through a key support channel, a trendline from the 1810 low through the Trump election low.  This is a very big deal.

S&P 500
Something I noticed this week -- the all-time high at 2405 SPX is precisely the same distance from the Brexit lows last June as the Brexit lows are from the 2007 highs (@1576 SPX).  This suggests to me that the Brexit spike lows at 1991 might serve as a support for a true head-and-shoulders top, drawn above, which targets the 1576 level as a technical target and support for a sharp market bounce (the B-wave) late this year.

That made me think, What if the Fed actually keeps their word, and raises rates three more times this year?  They have given us plenty of warning, so why shouldn't they follow through on their promise?  After all, it's on Trump's watch, and he foolishly adopted the market rally as a sign of his Mandate from Heaven.

So fuck it, how will he like it when the $VIX is over 40?  He asked for it.  And he would get it, as rate hikes, in June, again in September, and lastly, in December.

By then the damage will have been done, to bring out the specter of deflation, and a test of 666 on the S&P in 2018.

An ominous wedge pattern on $AMZN since early 2015 looks complete, with the stock starting to break out of a really tight wedge at its peak.

$AMZN topping
This unfolds as a serious crisis for the mega-company, heading to support at $300 and, eventually, much lower.

$AMZN breakdown
I worked for Nordstrom ($JWN) for a decade, and noticed that they just put up another death-cross on the $JWN daily chart.  The last time they did this, they tumbled hard from their all-time highs.  Now the only thing going for this chart are the two unfilled gaps up above.  Otherwise, if it breaks the $35 level, we start to look at $18 or so as the next support.

This channel is brutal and suggests that the company may have serious decisions facing it next year.  That's all I will say about them for now.

$JWN channel of Doom

Wednesday, May 17, 2017

Little C or Big C?

How much angst will we see from the Trump instability this week (and potential scotching of any idea of tax reform)?  Here are two scenarios.

1. Little C: market sell-off returns to support at 2340 SPX into May opex, where we find support and continue to grind sideways in a long W4 that has another month to go.  It's an ascending/barrier triangle with a technical target of 2480 SPX.  The final (we shall see) W5 up begins with the June FOMC, where the Fed holds the discount rate steady.

2. Big C: a Brexxit-like panic sell-off of 120 handles SPX, all the way to the full .382 retrace at 2280 SPX.  Critical support for the rally -- a trendline from the 1810 low -- lives down here.  This capitulation move would exhaust the selling and end the larger W4.  W5 would begin in earnest on Monday.

Both scenarios wrap up for a candidate top in mid-July, 2480 SPX.

SPX wave 4 scenarios

Tuesday, May 2, 2017

It has already started

Incredibly, we have set the lower bound of the crash channel.

"big things have small beginnings"

Check this out.


Here's the larger picture with more count and detail on the failed 5th wave.


Now look where this same pink line ends up in six weeks, on June FOMC -- SPX 1622.  By September, the larger rout will force the Fed to announce a fresh policy of the Quantitative Easing.


The story of 2017 is of a financial crash which only the most crazy, irresponsible, depraved tinfoil internet cranks could possibly foretell, one which forces the hand of the Federal Reserve to abandon its stated program of regular rate hikes and shrinking the balance sheet, to return to extraordinary monetary policy and direct intervention and support of deflating asset prices in the wider economy.  

This will be the death knell for the $USD, although this process, too, may take several years to work itself out.