Saturday, September 9, 2017

Another week, another potential topping move

Lots to be excited about this week as the best ending-diagonal tape in a long time continues to form, ominous like the storms off the west coast of the Africa.  Something very serious is brewing.


Here's the proposed E-D count.  With Irma looking like it will not level Miami, we can expect a gap up on the /ES of at least 10 handles tomorrow night.  That will be a nice start to an extended 5th wave that targets 2509 on the S&P 500:

SPX 9-8 ending-diagonal

If this plays out I'll be pricing week 1 October SPY puts, for retrace of an even larger ending-diagonal and initial low on October 6th.  This begins a larger move that initiates the Bear at long last and finds desperation support in mid-January 2018.

SPX 9-8 doom

Hurricanes aside, the real shit-storms hit in 2018.  And the bounces are going to be as much fun as the panic sell-offs.

36 comments:

Christian Gustafson said...

First! just triggering the comment notification to my email.

Bryan Franco said...

I figured you respond first because it places you higher up the Google search chain based on demonstrated blog interest. But I am not sure if it works that way.

Christian Gustafson said...

We don't game the system here, Bryan; we're lucky at all if we can even understand it.

Hugh Jazole said...

You guys just need some more oxytocin. See Mr. Mean Spirited's latest post.

Permabear Doomster said...

Hello CG.

Most agree a 5% retrace is due by early October. Anything more looks a stretch, as not much has adversely changed.

No thoughts on the bullish copper settlement in August?
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No Sept' rate hike IS bearish.
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your pick for next fed chair?

Christian Gustafson said...

My money's on Steve Keen

Christian Gustafson said...

Steve Bannon was magnificent on "60 Minutes" tonight, interviewed by that tedious socialist prick Charlie Rose. May he continue to wage his war against the establishment parties, that Donald Trump may be able to run on the Bull Moose ticket in 2020.

Hugh Jazole said...

Great call here CG! I'm still bullish, and trying to decide when to bail on the longs I took on back in March. Very pleased so far, but don't want to push my luck. Still thinking between 2600/2800 SPX is a good spot to bow out.

Kevin Wilde said...

this should be day 1 of a 4 day rally - above 200 day moving average, or 50 day mov9ing average, for many indexes and stocks (which is the classic C wave of a 2 of some kind) - then watch out!

Kevin Wilde said...

Great reversal on the YEN, and that going forward bodes well for the bulls. If, however, the YEN does a double fake out and rallies to reconfirm the recent breakout then that's the tell the stock market crash is on. Defo bad things happen when this rally leg reverses. Defo looking for place to ease out of longs and increase hedges. As Sherlock said, the game is afoot.

T.Berry said...

not a bad day considering sept is the worst month of the year for stocks. :)

still waiting for the 2012 crash-- maybe next year. lol

T.Berry said...

kevin, does today's massive move on pretty heavy volume nullify your call that the market is going to crash in either sept or october?
thanks

Kevin Wilde said...

T.Berry, I was looking for one final rally that targets NAZ 6729, though the crash starts the moment this rally leg ends. That crash start could be after NAZ 6729 is hit, or it could be after CG's SP 2509 target is hit. In short: the market is toast once this rally falters and we break below the lows set a week or so ago. Tis all about the YEN, and I'm watching that like a hawk.

T.Berry said...

thanks kevin. as for the crash, how much % do you expect each the naz and sp to drop once they hit those targets? 5%? 10%? 15%? and over what time frame? 3,6, 12 months or more?

i've seen many target numbers called since 2012 and every time they get pushed higher once they are hit for some reason or another lol, and the crash gets "postponed again lol. . not that i don't think you may get it right, but there are so many permabears calling crashes every other week .if ta worked

Kevin Wilde said...

The bull/bear cycle calls for a high risk blow off bull condition - which we are in - to turn into an extreme risk one. The average loss is 50% for extreme risk cycles, though they can come in pairs, such as happened in 1929-33 and 2000-03. My bull/bear cycle indicator will tell whether its the usual 50% downer, or the paired 80%+ one. Since high risk blow off bull phases are created by excessive speculation on the backs of excessive monitory intervention from the central banks - and this time around has seen record amounts of the latter - I expect the next great bear will be a 80%+ mega one that topples the financial system, especially in Europe and Japan. But if my indicator says buy when the NAZ is down 50%, then I will buy.

rotrot said...

below is a link to an article written more than four years ago...take some time to read and study the material...fascinating!

"DOW, 2018, 2021, the year of the Ox" - May 4, 2013

http://www.thedailytick.com/dow-2018-2021-the-year-of-the-ox/

Bryan Franco said...

Rotrot- thanks. Question. Given the long term nature, does fall 2017 count as "being around 2018"?

rotrot said...

"Given the long timeframe we allow for a small tolerance, such as the year 2008, where the high was actually in October 2007"

Hugh Jazole said...

Any bets on how high the PE ratio gets? We made it to about 43 in 99, I'm thinking we take that out for sure.

rotrot said...

assuming things play out as you forecast...would look for that 'initial low' on October 3 or 4 (most likely) rather than October 6...

rotrot said...

FOLLOWUP...my pivot date system has October 3/4 as an important turn...

Christian Gustafson said...

rotrot, the presumed 10/6 low is based on the 10/5 full moon (typical bottom) and a Bradley turn over that weekend.

T.Berry said...

pretty amazing stock market continues setting new all time record highs (like 40 so far in '17) when we are within the 6 week timeframe of the big fall crash . waiting for it to get pushed to next year. :) lol

T.Berry said...

market hitting the trifecta! naz, dow and s&p at all time record highs. sell mortimer sell lol

Kevin Wilde said...

T.Berry, this is most important part of a warning I issued to my subscribers tonight, which everyone should beware of: the bulls should be OK the remainder of the week, though next week should be a biggie in regards to which of the two crash paths we are destined to take.

The title of tonight's update was: prepare for financial winter.

rotrot said...
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Bryan Franco said...

Kevin. Nasty bull trap on the yen.. How do we reconcile with an impending top? Policy error? I.e. rates rise too quickly?

Kevin Wilde said...

Bryan, note the rally in YEN has created the sideways churn, go no where, troubles in the stock market this summer. The question is, whether such sideways churn is a top or bottom of some sort. My expectation was, and is, we have one more significant rally leg for stocks, with NAZ 6729 my target. CG has a shorter term target, of SP 2509, close to where we are now. The YEN would be expected to trade opposite of that, with leverage based off of the YEN what is driving stock prices around the world (and nothing else.) The YEN diverging as we approach these decision points (next week if CG is right, a month from now if my NAZ 6729 is right,) should provide a good TELL as to our fate. What goes wrong is the overleveraged are proven wrong and are forced to react. That forces money to go back to Japan, creating a rise in the YEN - despite what that central bank wants - leaving us with a 1929-1933, 2000-03, 2007-2009 moment - which results in a clear Missouri show me moment where traders lose confidence in central banks and governments. I call it, watch reaction to the news, rather than the news, as to what happens next. When the central banks act, and the markets tank, game over. And since NOW it appears it will take some stock market shock to get central banks to act again, we have to suffer a crash of sorts to even see how the markets react to the REACTION of central banks. Since soooooooooooooooooooo much money has already been leveraged on PAST central banks actions, when the slide begins, the margin calls are likely to be so severe that few - me, CG, you? - will be in positon to be in position to buy when central bank action says to buy that we will need to be very cautious of a 1932/33 total collapse event. But, we can leave that for a later moment, as focusing on the top is more appropriate at this critical junction.

Christian Gustafson said...

The 2509 on the S&P looks like mid-session Thursday. I did play some Sept SPY 250 calls long, from 9 to 54 cents. Simple prudence had me sell them rather than wait for a pencilled-in chart target.

Christian Gustafson said...

Kevin's getting restless.

Kevin Wilde said...

I sold the SVXY positioned I entered at the lows last week. Tomorrow is day 4 of the rally, and those are often major turning points (in the c of wave 2 position for many indexes.) I may add to my hedges tomorrow.

Bryan Franco said...

Kevin... My man! Welcome to CG's board. If I may.

T.Berry said...

kevin,
there have been numerous (too many to count) targets (ie 2509 or 6729) called since 2012 that called either a final top, last leg up, or the crash point of which all (yes every single one) have failed. i find it hard to believe another set of numbers will do the trick although i'm not doubting your skill level.

those who listened back in '12 would have likely sold out after 1440 (or much lower a few years earlier when the s&p was going to 200 lol) on s&p was hit missing almost a double in 5 years. i'm no expert but i'm very content holding 100% long for the longer term as i know that is a 100% winning strategy since the stock market has come back every single time in history. i will continue taking those odds : )

best of luck next week!

Kevin Wilde said...

T.Berry, most baseball games end at the ninth innings. The argument you are making is that because someone saying the game would end in the ninth innings and was wrong, and wrong again for a calling an end in 10th innings, and then again the 11th and 12th, that they are sure to be wrong now. The game WILL end, and the deeper the extra innings you see the more closer to the end you get. Have you ever seen a baseball game NEVER end? How about bull markets, ever see any of those never turn to a bear? I have an indicator that has mapped every bull and bear market since the early 1900s and THAT is what says we are to see a bull turn to bear, and that such a bear turn will likely see a severe drop in stock prices, and include both a recession and a financial crises that will rock the world. That is HISTORY of bull and bear markets, where the higher they go, the harder they fall. If you continue betting the bull baseball game will never end, then you are Billy the Kid taking playing the very dangerous game of the gunfighter. Yep, he was good at that - unbeatable. Well, till he was beaten, then he died. I have a Russian Roulette analogy if baseball and gun-fighting don't work for you, though a simple glance at a chart of the Dow since 1900 should be enough. I added some additional TZA hedges this afternoon, and plan to add some more UVXY if we more green tomorrow (as a protection of my large QLD position, which I'm restlessly searching for a spot to unload during this rally.)

Bryan Franco said...
This comment has been removed by the author.
rotrot said...

NOT AN ENDORSEMENT

For several years Andy Pancholi has been forecasting a major high in the July-October 2017 time frame...yesterday he sent out an email blast "Something Big Is Coming Right Now" (https://twitter.com/Pok8Rok8/status/908062773611057154)...Pancholi allegedly expects a financial panic akin to 1837 (https://en.m.wikipedia.org/wiki/Panic_of_1837)...