Sunday, November 19, 2017

The elusive, mythical leading-diagonal

Off the 2597 SPX high, we actually have a five-wave decline that could possibly be an elusive "leading diagonal", which is similar to a terminal ending-diagonal, but whose triplets and overlapping waves signifies the uncertainty at the beginning of a directional change instead of its end.  Daneric has suggested these numerous times over the years, each time proving to be a bust, so it's achieved something of a mythical status, a chimera, a unicorn, possibly apocryphal Elliott nonsense.  But we'll give it a shot.

the lion in winter

The market lost steam on Friday precisely at the .618 retrace level of the drop from 2597 to 2557, so we have the remote possibility of both a leading-diagonal and an initial channel south, which will reach its low in the week of the next fiscal cliff deadline, 12/8.  Congress will keep the wheels greased at the 11th hour and rally us through Christmas.

Red /ES tonight would mean we are starting a larger 3rd wave down, which will intensify as the Press fans the flames of a fiscal wreck into December.


SPX leading-diagonal and possible new channel

51 comments:

christiangustafson said...

Red /ES tonight would have to buck the general lame low-volume melt-up into Thanksgiving.

Bryan Franco said...

Equally interesting, to me, would be a hard fade off of the 2590 area for a 5f.

Kevin said...

Shit happening???
https://www.armstrongeconomics.com/world-news/corruption/report-of-marines-invading-cia-headquarters/

christiangustafson said...

Toppling ISIS at last?

Anonymous said...

And there's this.

https://www.algemeiner.com/2017/11/09/israeli-shekel-emerges-as-worlds-2nd-strongest-currency/

T.Berry said...
This comment has been removed by the author.
Anonymous said...

Sheeeeit!

http://www.zerohedge.com/news/2017-11-20/bofas-apocalyptic-forecast-stocks-flash-crash-bond-bubble-bursts-h1-2018

Bicycle said...

2017.9
2017.9
2017.9
2017.9
2017.9
2017.9
2017.9
2017.9
2017.9
2017.9
2017.9
2017.9

christiangustafson said...

We do finally have our high in the $RUT, all indexes at ATHs, scams like BitCoin being pumped to idiots everywhere.

There's a giant expanding wedge up here -- 2617 S&P Wednesday afternoon?

Black Friday disaster ahead? I'm going to spend as much time shopping on Friday as I do watching the NFL, which is to say, none at all.

Bryan Franco said...

How is it that there is no bottoming process on any reasonable daily/hourly timeframe in the major equity indexes? That indexes rise faster than they fall now?

Bryan Franco said...

One would literally have to interpret every 15-minute break of trend as the buying opportunity of a lifetime.

Kevin said...

The NAZ 6850 target is in play, so I just issued a Flash Alert Update to my subscribers to sell 1/2 of QQQ (conservative) and 1/2 QLD (aggressive) positions going into the close today. I continue to hedge the remaining long positions with small amounts of TZA and TVIX.

pb said...

Bicycle what do you mean by 2017.9?

Bicycle said...

2017.9

365 x .9 = 328.5

328.5 = 11/24

11/24/2017

Kevin said...

2017.9 (November 24, 2017) is the next Martin Armstrong cycle turn. Next one is 2020.05. That (a bear here through 2020) would fit perfectly with demographic trends, and my own bull/bear cycle, so Martin's cycle is chiming the same message as me, Harry D, and Christian G. If so, such a move would be such a thing of beauty that would answer once and for all the value of technical analysis over fundamental, or central bank manipulated analysis. Interesting times, for sure.

Anonymous said...

More doom to keep us entertained.

https://extranewsfeed.com/from-oilslick-to-tyranny-e35d04b31fc3


Anonymous said...

CG, do you think UVXY can make it under 10 by the end of the year? Might be the buy of a lifetime if it can.

rotrot said...

https://tinyurl.com/y8w648kp
"The Economic Confidence Model has a turning point here this November 24/25. That can produce the temporary high. The next one November 21, 2018, is the one that tends to produce the major events that are often political in nature."

T.Berry said...

its possible hugh. when holiday sales are announced in december shattering all estimates as this year's will be the highest on record (as consumers have never been wealthier). that along with if the tax cuts going through this year should result in a rally of epic proportions. at some point though, uvxy will again be over 50.00 or 60.00 depending on the reverse split ratio.

the nas is a mere 1.5% from 7000 and dow just under 2% from 24k . round numbers by x-mas or early jan???? 25k



christiangustafson said...

I think Goldman gets their target of 2400 SPX into EOY, possibly eerily right on it.

Congress returns from the break this week with only a short time to pass the pig-man tax reform. I think they fuck it up like health care.

rotrot said...

https://tinyurl.com/yc3vegbg
“The Turning Point on the ECM is this weekend. We do happen to have a Directional Change next week in the Dow with the next turning point due the week of 12/04 and that is followed by the week of 12/18. What is most curious, is the fact that the Dow, Euro, Gold, and Oil all have the same timing targets, with oil showing the week of 12/04 is the strongest.

We are witnessing the global markets beginning to align. This is implying that international expectations are starting to dominate domestic or isolated market fundamentals.

We do not expect this turning point to be a monumental one. What this reflects is the markets are starting to align preparing for 2018 and the beginning of a new round of fun and games.”

Depriv said...

Hi,

The reference is still this old chart:
http://keptarhely.eu/view.php?file=20170607v00lfpf3b.jpeg

Such timeframe would require log scale, so this linear one won't provide adequate target price, can be used only for time reference.

For smaller scale:
http://keptarhely.eu/view.php?file=20171127v00moj5zw.png

There are plenty of weeks left for some violent price actions. As for the target price....
Well, with this absurd 2800 I'm still holding back.

T.Berry said...

cyber sales up 17% yoy. shattered is an understatement. us economy has never been stronger and getting stronger. wait till tax cuts kick in.


we could very easily see s&p 3k next year.

Anonymous said...

"us economy has never been stronger" I love you T. Berry

rotrot said...

"Expecting topping action by Monday, as cycles turn negative later into the week...The divergent high to 2607 may come...We’re seeing at least a 110-point fall to 2485...possible to 2400-2385...a Christmas recovery will happen the week of Dec. 11-15 and possibly into the Dec. 22."

T.Berry said...

Blogger Hugh Jazole said...
CG, do you think UVXY can make it under 10 by the end of the year? Might be the buy of a lifetime if it can.


no need to wait hugh, the nas hit the 6850 trigger for the 50-90% crash . probably only days away : )

T.Berry said...

hugh,

*6.6B sold online in way day most ever in the history of us.
*ue at 17+ year lows
*housing prices record highs
*auto sales record highs
*gdp 3%
*stock market record highs
*american wealth record high

i would say it doesn't get any better but once the tax cuts go though, we're going to see a rally of wealth of epic size. and yes, we're only 5 years from dow jones 40k. it is going to get better : )

T.Berry said...

25k in the crosshairs only 4.5% away. 1000 point moves will happen much quicker as the %'s go down as we march to 40k.

it's possible we overshoot 40k and give 50k a serious run?

Bryan Franco said...

They had to put their weight in everything else to keep the s&p unch today. The tech/value rotation is getting comical

T.Berry said...

doesn't look like not much weight needed today bryan. s&p has to have a rest day every once in a while ----gotta get rested for the upcoming santa claus rally : )


only took 30 trading days to get from 23k to 24k.

we could very well see dow jones 30k in 2018 and 40k may come much sooner than expected.

only concern facing us economy now is that if the tax cuts causes it to overheat and get ahead of itself. feel confident that the fed will be ahead of that one.

christiangustafson said...

Only the Honorable Senator John McCain can save us now.

I promise to post a full and extensive hagiography of the man if he torpedoes the tax cut plan.

T.Berry said...

"50% of firms say they'd hire if tax cuts pass"
great article
https://finance.yahoo.com/news/exclusive-half-companies-say-theyd-hire-trump-cuts-taxes-135212711.html

problem is there aren't enough unemployed to fill all the positions. the economy is going to go ballistic with growth. seems the stock market already knows that. just a mere 3.5% till we get out the 25k hats!!! : )

christiangustafson said...

The bottom will come in September, 2019, with the S&P 500 just over 500.

The Federal Reserve will announce bold new policies at their September, 2019, meeting. You should have your affairs in order before then.

T.Berry said...

cg, do you really believe the fed would disrupt the markets? they have been staying ahead of the curve for 9 years. doing anything that would mess with the market would hurt the economy. i'm sure even the donald would agree and would never let it happen especially on his huge ego watch lol.


as for predicting targets, i whiffed on this years s&p target bigtime. 2550 lol. 3rd year in a row. oh well, rather be on the conservative side.

as for '18 3000 seems pretty reasonable at this point. but reserved the right to re-access at year end. :)


T.Berry said...

besides fundamentals always win out. so the fed would have to something really stupid.

T.Berry said...

please let this be a blow off top

rotrot said...

"My S&P Target Is 2800… And I’m Predicting A Bear Market. Yes, I’m Sane." - Lee Adler | November 30, 2017

https://suremoneyinvestor.com/2017/11/my-sp-target-is-2800-and-im-predicting-a-bear-market-yes-im-sane/

christiangustafson said...

Excellent tape today! GLTA

Love to see us at 2300 on the SPX by EOY.

Kevin said...

Market looks in trouble, and I believe the key is the semis, which have been leading us down all week. If my wave counting is correct, SMH just completed a 5 wave move down, which sets us up for a rebound here. The strength of the semi rebound should tell us whether the top for the broader stock market is in, or not. The only alternative count here is semis drop to the 200 day moving average, which would be a 10% mini-crash FROM HERE. Obviously that would change things dramatically regarding the bear potential, though such a plunge is not expected WITHOUT A RECOVERY BOUNCE ATTEMPT HERE.

So if I was a bull looking to add some money - especially for a trade - maybe a nibble in the semis is warranted.

Bears should look to pounce as the semis test the 20 day moving average, and that's what I will be doing.

T.Berry said...

biggest week of the year for the stock market. corporate tax cuts = increased corporate profit = stocks are still a great value as seen by the 400 point turnaround today. one of the better buying ops of the year. 2018 will be another great year. maybe not as outstanding as 2017 but should be above 12% average.

between corporate tax cuts & santa rally 25k could be in the cards by year end.

Bryan Franco said...

T. Berry, you are off by about 5% on the average equity return in the u.s., going back to 1885

T.Berry said...

bryan, i am using recent history---the last 20 years

"The average annualized return of the S&P 500 Index was about 11.69% from 1973 - 2016. In any given year, the actual return you earn is likely to be far different than the average return."

https://www.thebalance.com/stock-market-returns-by-year-2388543

given the historic nature and strength of this bull market over the past 9 years, 12% would be on the lighter side as the dow jones annualized return since 2009 is 13.76%. so 12% would put the dow jones in the 27k area with 30+k in 2019.

where do you see the dow in 12 months?

T.Berry said...

fyi---even with todays sell off the dow jones is still up 22.6% ytd

Anonymous said...

"2018 will be another great year." T. Berry, you and I were aligned for 2017. This year was my best in a long time, but I'm afraid I'm going to part ways with you in 2018.

rotrot said...

https://www.sentimentrader.com/blog/daily-sentiment-report-lite
"This is not a normal market.

The last time, before Thursday, that the S&P 500 rose more than 0.75% and closed at a new high, but the VIX “fear gauge” also rose at least 5%, was March 23, 2000."

Anonymous said...

Bitcoin bag holders bout to get flushed.

T.Berry said...

now that's a bubble hugh. stick with stocks, still value to be had especially with corp tax cuts rolling in.

think we're in the 5th inning of this secular bull.

the dow took about 8 years to gain the last 15k points should take less than 4 for the next 15k.

40k is coming.

T.Berry said...

and possibly an overshoot to 50k. plan to start some selling around 38.5k - 39k

christiangustafson said...

Now there's a legal 5 waves down on the S&P 500.

Much of today was an effort to overlap the first decline down, violating the impulse, at 2657.71.

Every little bit helps -- obviously we now need acceleration events with a .gov shutdown looming and a probable rate hike next week.

glta

Kevin said...

Semis offer the clearest view, with a completed 5 wave now bottoming, which is an A and B of an A-B-C wave 2. SMH targets 105 then we crash. Such a 5% move would likely leave some of the broader stock indexes at new highs, though maybe not all. If that assessment is wrong, and the market pukes more here, then the trend will turn negative and I will short the market big time. If that assessment is correct, I plan to short the market big time as SMH hits 105 (so long as the A-B-C pattern at time looks correct.) So another week of financial summer before the dark days of financial winter begin.

christiangustafson said...

The tape since the 2665 high looks like an even better "leading-diagonal" -- five waves down, in triplets, weakest RSI on the third wave.

No W1/W4 overlap on this one. Will confirm for sure if .gov shuts down this week.