Thursday, August 10, 2017

Charts 8/9: Setup now for a huge sell-off

We closed right at the perfect spot for a gap and go in the morning.


We could see a 4-5% sell-off tomorrow, retracing the entire five-wave advance from SPX 2328!  Relief would follow next week, at least until mid-session Wednesday, when we rollover again.

SPX 30D

The big picture, including the debt-ceiling market crash in late-September (and face-ripping rally into January):

SPX 2Y

32 comments:

Christian Gustafson said...

GLTA bears!

Bryan Franco said...

VXX

Kevin Wilde said...

could be a competed 5 wave down for C wave, which targets new highs starting next week. Depends on whether NK tensions increase or decrease over the weekend. My money says things calm and we have to wait till the fall for the final top to be in and crash begins.

Hugh Jazole said...

About North Korea.

https://twitter.com/CiovaccoCapital/status/895970478308958209

Christian Gustafson said...

Bounce OK here; the current decline still points right at 2280 SPX over the next two weeks. I don't the short-vol crowd escapes this one.

T.Berry said...

hope you all loaded up on the puts wednesday. enjoy the pullback!

Kevin Wilde said...

the bull/bear line is the 100 day at 2412. The crash point is the 200 day at 2239. All good for bulls while we stay well clear of those levels - and watch out below if they are start to be challenged. NK talks seems to be calming...

Bryan Franco said...

What if this has very little to do with NOKO, and everything to do with Trump just not winning. This was merely a catalyst for a change in sentiment. This alone could completely undo the Trump "bump", NOKO or not.

Bryan Franco said...

NOKO or not, there has been a lot of damage in my view. Look at the long term trendline breaks in Small Caps, Transports, High Yield Bonds (HYG), Preferreds (PFF). Even the S&P is just below its intermediate trendline from May. No new intermediate high in Semiconductors (SOXX). Vix index closed the week not in contango with one of the largest wedge breakouts I have ever seen in any chart

Kevin Wilde said...

Doesn't matter what the reason is that drives people into fear mode. The bulls will buy, and it either works and we head to new highs to washout the bears again, or the dip fails, and we crash. That's the mode we are in. I say one more high before the bears get their crash, though NK could have a different opinion. To say NK isn't a factor is foolish, IMHO (though I agree that at this point NK is simply the excuse of the day for fear to land. Did you see the OBV line for UVXY/TVXY. Whowser!

Bryan Franco said...

Backwardation is a friend of VXX

Hugh Jazole said...

Dennis Gartman has turned bearish. That is all.

Bicycle said...

Gartman went mega bearish basically at the bottom of that wave. It was probably 4 of 5 on the DJIA in a rising wedge.

We should get one more new high for a 5th, but not break the inflation adjusted trend for the Dow in place since 1929. Thus we should crest the current high of 22179 by a bit, but not a whole lot. 5th can also fail here and fall just shy of that. In any case we should see far more severe declines at the end of the 5th than the ones that came with that last wave down... it wasn't impulsive enough.

If we rocket through 22500 or so on heavy volume anytime soon... know that we are in a completely new paradigm, probably hyperinflationary. I don't truly expect that, however, until the conclusion of the coming bear market.

Hugh Jazole said...

Kevin, what's your current top for NAZ?

T.Berry said...

ugh, one more new high. just one more. : )

T.Berry said...

"which targets new highs starting next week"

kevin, so far, looking like a pretty good call : ) the mkts are now all less than 1% from making another new all time record high.

could within a couple days. it's been over a week since we saw the new all time record headline

: )

Kevin Wilde said...

I'm still in the camp that the NAZ has to hit the +25% on year line, just like it did in 1998 and 1987, which were past recent high risk blow off bull years, and is a perfect representation of average trading expectation is such phases. That targets NAZ 6729. The crash post 1998 was 30% down from peak. The crash for 1987 was 50% down from peak. Both is similar time frame. Thus magnitude of crash path dictates whether we had to new highs in an even larger blow-off (like 1999,) versus the real big one has begun (like 1929.) Planets do seem to be aligning for such a top to land in September, or October (like 2007.) UK chart says we crash right here - next week - if we start to slide again in the next day or so, though there's an awful lot of big name bears out there right now, and markets rarely are that easy. Thus wave 5 blast off to get everyone super bullish much more likely, IMHO. Follow the trend is the best trading approach for such tricky times.

Hugh Jazole said...

Thanks Kevin.

Hugh Jazole said...

LOL!

https://www.wsj.com/articles/household-debt-hits-record-as-auto-loans-and-credit-cards-climb-1502809205

Bryan Franco said...

Yesterday market went into a 4 hour long 10 basis point range. Range. Almost all day today, market in 20 basis point range. Range. The transmission mechanism is probably through vol crushing via the SNB. Starts overnight with BOJ Nikkei purchases.

Bryan Franco said...

And that.. After a near doubling of $VIX in 10 trading days. Settled down THAT quickly???

T.Berry said...

kevin,
less than .004% from your call last week for new all time record highs this week. lookin' good. time to push another crash back lol

T.Berry said...

bryan, i believe the vix got spooked on the possibility of war. the move was over exaggerated to the upside and now that things have calmed down, its back to reality. the vix is in my opinion heading for tbe single digitts. the low should/could be around 5. stocks are clearly the place to be for the foreseeable future.

Hugh Jazole said...

More fake doom news. The big boys are likely buying hand over fist, as their media lackeys crank up the fear machine.

Kevin Wilde said...

We either rally to retest the old highs in the FINAL rally push ahead of a fall crash (VIX 10 then over 100...) or we crash over the next week or so (VIX over 100.) One final rally to go seems most likely, though down 2% today by the close and I will be in the crash now camp.

pb said...

Kevin your subscription page does not work you might want to look into that

Hugh Jazole said...

BTFD!

Kevin Wilde said...

PB, what happened when you clicked on the sub page, or are you talking about the free trial sign up process? The sub page seems to be working for me, and I received new sub payments this week. Anyone signing up for a free trial let me know (via the contact us box at AK, or emailing alphaking.update@gmail.com) and I will extend the trial through year end.

Hugh Jazole said...

Are the powers that be trying to dump Trump?

Kevin Wilde said...

"Are the powers that be trying to dump Trump?" or turn him into one of them. Resistance is futile, we are the Borg

Kevin Wilde said...

Here's the view of a couple of guru's I follow:

Charles Nenner is screaming to get out before September. Dow going to 5000 between now and bottom in 2021. Massive war coming.

Ex B is screaming rally to SP 2490 before we crash, though crash we will, and 2490 is last chance to get out of longs, or enter UVXY at favorable prices.

Martin A has close yesterday as a biggie, with Dow 21,665 needed to confirm painful correction underway. We closed at Dow 21,674... A weekly close below Dow 21,227.9 confirms sharp decline into September and October, with possibility for a royal crash into 2018, followed by a blow off into 2020. If we hold here - or rally quick after crash - blow off into 2018, then crash into 2020. Left and right gonna war on the streets going into mid terms next year, and even worse in 2020 election. European financial crises set to resume any minute...

I'm just trying to ride the trends, which means long though hedged for now, though subject to rapid change.

Hugh Jazole said...

"If we hold here - or rally quick after crash - blow off into 2018, then crash into 2020" That's pretty much where I'm at, still do NOT see a crash in 2017.