Monday, February 12, 2018

Crash leg setting up post-Valentine's Day



It looks like we completed A of 2 up at 2573 today, leaving B to correct and a final C up.

SPX 15-min

This sets us up for the next crashy leg off the thin green trendline either starting Valentine's Day (@2740), or soon thereafter (slightly lower).

The market is moving fast enough already to leave those waiting for a fall 2018 crash as spectators to the disaster that is unfolding now.  The months of May and June could destroy many trillions $$$ of pretend wealth.

SPX daily

37 comments:

Kevin Wilde said...

100% agree though I have SP 2762 are my target end for wave 2.

Christian Gustafson said...

Anywhere between 2726 and 2740 works for me. We have the New Moon on Thursday, too, if you believe in that sort of thing.

T.Berry said...

since 1950 the stock market has had a whopping 10% pullback 15 times. that averages to once every 4.5 years. given we just had one, the next one should happened sometime in 2022.

be careful getting all perma-beared up lol

Kevin Wilde said...

The bulls becoming complacent again post a scary dive is a required precursor to any crash. Thus so far so good...

T.Berry said...

bear mkts last on average 12 to 18 months bulls on the other hand last up to 20 years. long term b&h price averagers need not worry the stock market always comes back as opposed to tvix/uvxy/vxx which never do

T.Berry said...

inflation is to be expected in an economy that is strong as the one we're in
the mkt always gets it right

Kevin Wilde said...

Talk is cheap, let's see how my hedge trading does against the misery buy and holders are going to suffer this year. Even if we see new highs by year end, the bulls are in for some tough times as a prelude to that. If Christian is right - and the pattern does look very promising to the bears, then the bulls won't see their portfolios back at these levels for the next 20 years.

Christian Gustafson said...

Kevin --

Do you see how this morning's CPI dive at the open made a perfect e of B, to complete the triangle?

Now in c of 2 up.

T.Berry said...

misery lol yeap, the stock market has come back 100% of the time. us poor b&h sitting on all time highs. lol. the fearmongering that's been going on for the past 6 years (or about 15,000 dow jones points) isn't going to work. :) enjoy that 10% correction. next one's in about 4+ years.

T.Berry said...

buy&holders aren't home run hitters lol

T.Berry said...

a. next week, next month, next year

q. what's the most popular perma-bear phrase since 2012?

lol

Christian Gustafson said...

Friendly reminder that 2702 SPX is the 50% retrace of the total drop from the 2872 high.

Kevin Wilde said...

Christian, you may be right on the C of 2, though more like we completed wave A today, and we see two day pullback in B, then four day rally across the 50 day to complete C and 2. Either way, I plan on selling day 4 close above 50 day - so long as not at new highs - and going net short. Not convinced this isn't simply a wave A and B of a larger fourth wave - thus year ends well for the bulls - though I would not want to be long for the C wave of that, which, of course, could very well be the third wave crash phase as your chart suggests. 2018 is sure to be a trader's dream, with the bulls and bears competing with each other as to who commits suicide first.

T.Berry said...

bulls dodged the big 50-90% crash that was gonna start last fall . 9th year in a row lol

Hugh Jazole said...

"The months of May and June could destroy many trillions $$$ of pretend wealth." I think you're right on track with that time frame.

Kevin Wilde said...

Martin Armstrong has May has a panic cycle time frames, with 2018 a panic cycle year. Should be fun.

Christian Gustafson said...

Everyone, even the bears, believes a selloff will be reasonable or managed.

I seriously think we could be all the way back at the Jaws of Death low of 530-535 SPX into the September FOMC meeting.

They will announce, um, new policies there.

T.Berry said...

hugh, still waiting for the 2012 crash lol

T.Berry said...
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T.Berry said...

dow jones is already up over 1700 points (over 7.5%) in just 4.5 days since the lows on 2/9. more proof this is the strongest secular bull market in history and longest. anyone who bought last week will be in high cotton by years end and beyond. corrections don't last long in this bull

think 5th inning gang

T.Berry said...

just a hunch we'll see never 2800 again :)

Kevin Wilde said...

The bounce was expected and covered my hedges and bought essentially at the exact lows, with a target of SP 2762. Now I'm looking to sell as we likely hit my target Monday or Tuesday next week, which would mark day 4 of the rally across the 50 day moving average. If, by some miracle, the indexes are at new highs by that day 4 - unlikely - then holding longs is called for, maybe targeting a March high (which is not far away time-wise.) More likely, the indexes stall on day four below new highs, then I will sell all longs and go net short, as Christian's chart becomes the one to watch.

Instead of baseball innings, let's use death row inmate exhausting his appeals. Yes, those can go a lot longer than seems reasonable, though never forget what happens to death row inmates eventually. Just make sure you're not in that bullish cell when the priest comes a knocking.

T.Berry said...
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T.Berry said...
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T.Berry said...

kevin,
when in the history of the stock market did it not come back?

tia

Bicycle said...

When adjusted for inflation:

- the stock market top of 1929 did not come back until 1959, 30 years later
- the stock market top of 1965 did not come back until 1995, 30 years later
- the stock market top of 2018 did not come back, EVAR

Kevin Wilde said...

Post South Sea bubble took 100 year to bounce back, and 150 years to make a profit. The biggest problem with taking 30 years to get back to even, it is the vast majority of companies go bankrupt and their stock NEVER comes back. Japan peaked in 1989 and is still 50% below the peak. This is the largest bubble in history, with the weakest FUTURE economics due to aging baby boomers around the world, thus expect the collapse to be the hardest, most destructive, and take the longest to recover. Are we there yet? That's what this blog is trying to answer. Just because it didn't happen last year, or the year before, or the year before that, then it can't happen this year or next, because it can, and one of these years it surely will, where the higher she goes, the deeper and more destructive the the collapse will be. Traders should remain long for now, though if you have any nails left, and your finger isn't on the sell button, then you've not being paying attention.

Martin A out saying Dow needs to close above 25550 today, or else we go to new lows into March 12.

T.Berry said...

lol bicycle----stocks are at all time record highs and going higher.

citing 1929 & 65----the market is way different now days.

since 1950 the stock market has had a whopping 10% pullback 15 times. that averages to once every 4.5 years.

T.Berry said...
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Bicycle said...

the market is no different than it was in '29 and '65... it is a fractal measure of human behavior and aggregate human behavior never changes

kevin--that armstrong DJIA target is the exact level I have been watching and I agree it needs to hold, it is the line in the sand for bears currently. NASDAQ needs to hold 7370's this week

R2K needs to hold 1570 this week, right where the gap down on 2/2 was

Bicycle said...

S&P must hold 2760 area today

Bicycle said...

Next week:

Tues: short term tbill auctions
Wed: 2/5 yr auction, mortgage apps (catastrophe), redbook, pmi composite, existing homes (catastrophe), FOMC minutes, Kashkari opens his yap
Thurs: 7 yr auction, claims, leading indicators, natgas/petro, KC manuf, fed balance sheet, THE DUDLEY speaks
Fri: The DUDLEY speaks again

lots of stuffs next week

Kevin Wilde said...

VIX is refusing to breakdown should be a worry to the bulls.

T.Berry said...

there is no reason i have found for the stock market to hit new 52 week lows. that would mean the dow jones would have to lose 20% (20,365 for "new lows"). ain't happening imo. remember corrections of 10% happen once every 4.5 YEARS not days or weeks. LOL

T.Berry said...

nope. investors need not worry (lost count of the warnings over the past 9 years)

Hugh Jazole said...

A real shocker.

https://www.marketwatch.com/story/how-wall-streets-fear-gauge-is-being-rigged-according-to-one-whistleblower-2018-02-13

Kevin Wilde said...

Lance's trading plan for anyone interested and looking for a little help during these tricky and dangerous times.

https://realinvestmentadvice.com/the-great-bear-market-of-2018-02-16-18/

-Kevin