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.

SPX 3D

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

SPX 15D

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.

SPX 3Y

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. 

54 comments:

Christian Gustafson said...

OMG 4x ETFs are headed our way!

Kevin Wilde said...

what ETF or investment vehicle are you using for the expected crash? (FWIW I follow the trend with the bulk of my money - thus will be in PSQ and sometime QID when the trend turns negative - sometimes hedged (like now) with smaller amounts of TZA and UVXY.) What's your plan? Thx

buysilver said...

What's the safest way to bet against the market so that you can set yourself up to ride it down but not have to try guess the exact day it begins? I'm set for QE but not the ride down.

David Does said...

very very bearish view. It is definitely possible. I expect a dip down to 2290 by the end of the month then all the way back up to 2400 for 1-2 months then the end of the summer the action begins...with a slow steady decline to 1800 or even 1600-1300 by end of winter

T.Berry said...

buysilver the big fav around here seems to be uvxy but i wouldn't since i'm not smart enough to time these pullbacks.
good luck though

T.Berry said...

for those keeping score, uvxy the adjusted close a year ago was $394.00. Todays close $13.69. Be careful shorts! it's a bull you're dealing with! LOL!!!!!

T.Berry said...

bullsiver youre best bet is to wait for a pullback and go long. easiest way to make money in a secular bull market is to be long. w're only in the 4th inning!!!!!!!

frank said...

One day your crash call will be correct...

Kevin Wilde said...

On UVXY/TVIX, yes, they are beasts, and one only use very small amounts of money, though very small amounts of money is all one needs when the big one comes. If the next crash follows the magnitude and path of past crashes - which they should - then on can turn 1K into $1 million within a year of the crash playing the swings. That 1K provides an awful lot of hedging to a portfolio in case a big one happens. One has to be willing to lose the 1K though, and have the cojones to place ever larger positions as the crash unfolds, though one would in theory be playing big with house money.

Bryan Franco said...

Kevin. That is the only way to beat the casino!

Kevin Wilde said...

Bryan, yep, that part of my overall plan and strategy, which has three component: one main trend following, hedged with two sometimes contrarian, sometime trend following alternate elements. Allocation to start the year is 94% index (trades QQQ etfs, sometimes leveraged QLD/QID, sometimes pure QQQ/PSQ,) 5% hedge (TNA//TZA contrarian entry at extremes,) 1% VIX (UVXY/SVXY traded in-line with contrarian extremes, adding and removing on VIX swings.) Current allocation is 94% QLD, 5% TZA, 1% UVXY. NASDAQ 6200 is the target where I sell 1/2 the QLD position, rebuy on dips, switch to PSQ/QID if trend changes on dips. CG has a failed 5th in place, though I think we are still in a 4th, with the 5th pushing us to 6200. Then we get to see if the larger pullback at that point is a larger 4th, ahead of one final blow off run to go into a late August top, which is the 1929 and 1987 patterns.

Bryan Franco said...

Kevin. Extremely plausible.

pb said...

Christian

What is supposed to trigger this cascade of doom. Nothing so far has managed to produce a mere dip below the trend line before it back up to support or new highs. Has your Physician prescribed a dose of medical marijuana?

Bryan Franco said...

Pb. A different perspective if I may. Oil, metals, small cyclicals, all crashing. And that this accelerated right after Fed fund futures implied probability of a rate hike surged yesterday, only makes me believe the market can't handle another rate increase. Haven't we seen this movie before? You just have to look under the hood a little bit.

Hugh Jazole said...

"Oil, metals, small cyclicals, all crashing." I'm a huge believer in the power of commodities as a market indicator. Oil might be my favorite indicator, and I think it's grossly underestimated how much it still matters. With that said, my observation has been that rapidly rising commodity prices are far more precarious than falling ones. Falling prices usually find a bottom and stabilize fairly quickly, where rapidly rising ones, can soar to the moon, only to come violently crashing down. IMHO, rapidly rising oil was a MUCH bigger factor in the 2008 downturn than many believe. Of course, it COULD actually be different this time.

sooner said...

Hindy's today.... https://twitter.com/sentimentrader/status/860251786841423872/photo/1

pb said...

Well - this guy believes next Wednesday may be the day to begin the decline.

http://www.marketwatch.com/story/crash-guru-warns-the-dow-could-plunge-to-14800-and-todays-a-date-to-watch-2017-03-13

Bicycle said...

Bryan's got it...

June FOMC and June 21 Bradley is the turn.

Christian Gustafson said...

McHugh says Thursday was a Hindenburg Omen. One more needed for the signal, and a Le Pen win this weekend will get things going in style.

Kevin Wilde said...

FED policy is strong USD, weak YEN, which drives money in FANG stocks and out of energy. French election may put EURO in play, which has been quiet. Eventually strong dollar will kill emerging markets, and thus US stocks, though for now strong FANGs winning the day over weak energy. Could be wrong though looks like big breakout next week to complete a fifth wave of some kind. Dow and SP could be iii of that 5th, though could be v of 5th.

Kevin Wilde said...

AS for a catalyst for bear turn, Fox news reporting NK dictator believes CIA plotted to assassinate him with a deadly chemical. True or not, that may push him into doing something stupid this weekend, which could DT into responding in some way, and Tonkin event opens the war gates. Bear case, and war case, targets August, IMHO, though itchy fingers on war buttons may have other ideas. I remains in QLD, hedged with a little TZA and UVXY. How's everyone else positioned going into this weekend's potential turning point?

Hugh Jazole said...

Here's a doomy link.

https://www.theguardian.com/commentisfree/2014/sep/02/limits-to-growth-was-right-new-research-shows-were-nearing-collapse



Bicycle said...

we get another Hindy then start the clock. Puts us within range of the major Bradley turn in June

everyone remember the omen confirmation from June '08 and what happened next? olé!

Kevin Wilde said...

If the Guardian are talking about collapse, then markets going up for sure. Unfortunately, HO signals have a mixed success historically.

Hugh Jazole said...

What a load of crap.

https://www.investing.com/news/economy-news/fed's-yellen:-challenges-for-women-in-workplace-must-be-tackled-480688


Kevin Wilde said...

Saudia Arabia, believe it or not, are about to chair the UN women's right delegation.

Bryan Franco said...

Monday pop and drop could be the sort of thing that sparks relief for the bears (or risk-minded money managers, for that matter). In my weekend dreams...

TSE said...

PB asked: What is supposed to trigger this cascade of doom. Nothing so far has managed to produce a mere dip below the trend line before it back up to support or new highs. Has your Physician prescribed a dose of medical marijuana?

Nope - and might I remind you that in Oregon you only need be 21 to buy... Blame it on Stephen Hawking! And gasoline is still pumped by an Attendant!

https://www.oregon.gov/olcc/marijuana/Pages/Frequently-Asked-Questions.aspx


Stephen Hawking: 100 Years Left For Humans To Escape Earth

Stephen Hawking has also warned that it’s only a matter of time until Earth is destroyed. “Although the chance of disaster to planet Earth in a given year may be quite low, it adds up over time, and becomes a near certainty in the next 1,000 or 10,000 years,” he said in November.

As a result, he has advocated colonizing both the moon and Mars.

Keeping up with his warnings, Hawking warns in a forthcoming documentary - called Stephen Hawking: Expedition New Earth - that humans should make their exodus from the planet within the next century if they have any hope of surviving. According to the BBC, which is releasing the feature this summer, Hawking discusses his assertion that “the human race only has one hundred years before we need to colonize another planet.”

http://www.zerohedge.com/news/2017-05-05/stephen-hawking-100-years-left-humans-escape-earth

Of course - we cannot be sure that the Stephen Hawking portrayed in the media is the ACTUAL Stephen Hawking....

"I have written several papers critiquing Stephen Hawking, including a long one on his Brave New World series for the BBC. But this is my first paper really linking my science research with my faked events research. I will use simple photo analysis and facial analysis to quickly show you the current Stephen Hawking is not the same person as the original Stephen Hawking."

http://milesmathis.com/hawk3.pdf

When Walking on the Moon -

https://youtu.be/0Nt8dJ6rMZI

Please be sure not to fall into Tsiolkovsky's Crater-

The Secrets of Tsiolkovsky Crater by Jack Arneson:

http://www.thelivingmoon.com/45jack_files/01archives/apollo15.htm

BTW - I checked the referenced photos at the NASA link - and they are exactly as shown. Those enlarged anomalies exist in the original photos.

Now here's some truly spacy and Hot Stuff...

https://youtu.be/CduA0TULnow

TSE said...

BF said....

Monday pop and drop could be the sort of thing that sparks relief...

LOL! What an awesome double entrendre!

You deserve a *GOLD STAR*!

Still ROFLOL.

https://www.youtube.com/watch?v=SFiv9M577a4


Bryan Franco said...

TSE. Wasn't even thinking that. But now I see that it is just perfect. Skip the part about my dreams though. Now we are getting ridiculous.

T.Berry said...

new all time record highs ,,,vix doing well., said a year ago it was destined for single digits..

new vix target <5

nothig holding it up, bottom is out. may not see a 3-4% pullback till fall

Bicycle said...

June FOMC hike odds now at nearly 90%.

Sept. hike odds now also rising to 44%.

T.Berry said...

higher rates = bullish. don't forget, fed got it right this time. yellen has proved she's no slouch. s&p up 28% since she took over (1741 to 2400+)

now that we're once again at levels never seen before there is a lot of run above to run. keep those dow 22k hat close by :)

T.Berry said...

yellen stopped qe and has hiked 3x and stocks are at new all time record highs. she knows what she's doing. caution attempt shorting the strongest bull in history (still in 4th inning)

Kevin Wilde said...

Eventually higher dollar will bring down the massive emerging market debt bubble, to topple he house of cards. Till then, tis nice enjoying the blow off.

john said...

War jitters with N.K., lobbing Tomahawks, firing AGs and FBI directors= all time highs, wtf? Yeah this will end well.

Hugh Jazole said...

"War jitters with N.K., lobbing Tomahawks, firing AGs and FBI directors= all time highs, wtf?" No need to ask WTF, not a single one of those things cause stock market crashes. A large scale war in the ME might trigger a short term crash/flash crash, but that would be the result of spiking oil prices. Bill Clinton handed out missiles like they were candy, and the market loved it. Here's a chart of stock returns during previous wars.

https://i1.wp.com/blogs.cfainstitute.org/investor/files/2015/10/Capital-Market-Performance-During-Times-of-War.png

T.Berry said...

+1 hugh. wars are actually good for stocks. the economy is driving this bull higher. americans have never been wealthier as 401ks and stock portfolio's continue hitting all time record highs. we are fortunate to be living in one of the best investments climates of all time. the biggest concern is the us economy overheating and stock prices getting way too far ahead of themselves. i think the fed will continue staying ahead of the curve and not allow that to happen.

Kevin Wilde said...

usually a bear market during the build up phase of the war, that then becomes a new bull as sell the rumor, buy the fact, comes into play. Bear markets do not need a catalyst, beyond too many bulls, having too heavy positions, on debt. Certainly got that here.

Hugh Jazole said...

"Bear markets do not need a catalyst" That might be true, but a crash does. A severe near term crash is what I'm betting against here.

TSE said...

Bryan Franco Said "TSE. Wasn't even thinking that. But now I see that it is just perfect. Skip the part about my dreams though. Now we are getting ridiculous."

Well, the end is just the beginning - Check it out!

The ouroboros (/ˌjʊərəˈbɒrəs/[2]; /ʊəˈrɒbərəs/[3]; Greek: οὐροβόρος) is an ancient symbol depicting a serpent or dragon eating its own tail. Originating in Ancient Egyptian iconography, the ouroboros entered western tradition via Greek magical tradition and was adopted as a symbol in Gnosticism and Hermeticism, and most notably in alchemy. Via medieval alchemical tradition, the symbol entered Renaissance magic and modern symbolism, often taken to symbolize introspection, the eternal return or cyclicality,[4] especially in the sense of something constantly re-creating itself. It also represents the infinite cycle of nature's endless creation and destruction, life and death.[5]

https://en.wikipedia.org/wiki/Ouroboros

This calls for some serious introspection:

Introspection is the examination of one's own conscious thoughts and feelings.[1] In psychology the process of introspection relies exclusively on observation of one's mental state, while in a spiritual context it may refer to the examination of one's soul. Introspection is closely related to human self-reflection and is contrasted with external observation.

Introspection generally provides a privileged access to our own mental states,[2] not mediated by other sources of knowledge, so that individual experience of the mind is unique. Introspection can determine any number of mental states including: sensory, bodily, cognitive, emotional and so forth.[3]

Introspection has been a subject of philosophical discussion for thousands of years. The philosopher Plato asked, "…why should we not calmly and patiently review our own thoughts, and thoroughly examine and see what these appearances in us really are?"[4][5] While introspection is applicable to many facets of philosophical thought it is perhaps best known for its role in epistemology, in this context introspection is often compared with perception, reason, memory, and testimony as a source of knowledge.[6]

https://en.wikipedia.org/wiki/Introspection

TSE said...

Birth - Death - Resurrection -

Even Insurrection -

It's all part of Creation.

Rush ByTor/ In The End/ In The Mood/ 2112 Finale live Exit... Stage Left 1981

https://youtu.be/yjGFmyVi_pM

TSE said...

FWIW:

Babylon’s Banksters
The Alchemy of Deep Physics, High Finance and Ancient Religion
Joseph P. Farrell
The modern-day financial crisis is nothing really new, reveals master researcher Joseph P. Farrell in Babylon’s Banksters. Banking has been tinkered with and controlled for the past thousand years of human history.
See how a seductively simple formula devised by a large and powerful Chinese family led to the “credit default swaps” bust.
Read how astrology and a fascination for gemstones played into the banking operations of the super-rich.
What are the long-term goals of the most powerful international cabals?
In this latest installment of his remarkable series of books of alternative science and history, Joseph P. Farrell outlines the consistent pattern and strategy of bankers in ancient and modern times, their desire to usurp the money creating and issuing power of the state, substituting a facsimile of money-as-debt. Here, Farrell peels back the layers of deception to reveal the possible deep physics that the “banksters” have used to aid them in their financial policies.
Joseph P. Farrell is also the author of The Philosopher’s Stone: Alchemy and the Secret Research for Exotic Matter, Transhumanism (with Scott DeHart), and The Financial Vipers of Venice.

http://feralhouse.com/babylons-banksters/

TSE said...

One more CJ -

Hanged outlaws, Apache prisoners and unforgiving terrain: Brutal images reveal the hardships of early travelers heading to the Old West and the dangers they faced

Read more: http://www.dailymail.co.uk/news/article-4495236/Images-reveal-hardships-early-travelers-America.html#ixzz4grDJuHGf
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Kevin Wilde said...

===That might be true, but a crash does. A severe near term crash is what I'm betting against here=== We are tracking the 1987 pattern right here, both price and date wise, so bulls are OK till end of August, then watch out for crash. USD, and/or other currency movement likely the catalyst, as it was in 1987 and 1998. The latter also has similar pattern here, with prime difference between 1987 and 1998 is the depth of the crash back then, with 1987 ending the year near the lows, while 1998 ended blasting off to new highs after the crash. Whether we be in for a 1987 or a 1998 repeat, we be in for a wall of pain later this summer, early fall, with a crash of sorts near guaranteed. The big danger is, CG is right, we suffer that here, due to currency movements, rather than my expected fall fall.

T.Berry said...

where are all the sell in may'ers? lol. after 9 years of not working its time to dump that stategy. instead all time record highs in may : )

Hugh Jazole said...

Still a failed fifth?

Christian Gustafson said...

Hang on here, Hugh, this opex week still has amazing potential.

Christian Gustafson said...

The long-awaited dive to 2280 on the S&P is still possible this week.

It oughta wake people up from their slumber. The "failed 5th" would actually be an irregular 4th wave -- you can see a 3-wave move from the 2322 SPX low.

T.Berry said...

how are you guys playing the plunge to 2280? (if you don't mind sharing) catchcing a 5% pullback would be quite a score. thanks

Kevin Wilde said...

I'm 94% of portfolio in QLD, looking to sell at 1/2 at NASDAQ close above 6200. My hedges are 5% in TZA, and 1% in UVXY. If markets drop 5% then I will remove hedges, and go all in long QLD/TNA/SVXY. Tis my plan. What is everyone else doing?

T.Berry said...

as most know i'm in for the long haul so i will just let my longs ride. have a little cash on hand that will definitely get plowed in if we're so lucky to see a 5% pullback...i'll probably settle on putting it in with a 3% pullback. in 10 years the stock market will be at least twice todays pries if not more.

Hugh Jazole said...

"I'm 94% of portfolio in QLD, looking to sell at 1/2 at NASDAQ close above 6200." You've got a bigger pair than I do! I've been thinking about an exit level lately. I'm thinking SPX can make it to 2800+, but not sure I want to stick around that long. 2600 would make for a nice/modest gain for me, so that might be when I bail. Anyone with the skills should really look at shorting real estate here, or sell a house you don't plan on being in long term. In a couple of years residential real estate will be toast IMHO.

T.Berry said...

"SPX can make it to 2800+" couldn't agree more Hugh! no reason to sell anytime in the foreseeable future. mkt going much higher

kevin great call on qld! that's an atm. nasdaq hits another new all time record high today too. nothing is holding it back from going much higher imo

i know im repeating myself, but this is a once in a lifetime bull and we still have quite a ways up to go.