Tuesday, March 20, 2018

Do we need to touch this blue line on the S&P?



The dotted one, in the long-term chart.  Is that where we need to go?

SPX endless credit expansion

It would be about 3065 into April opex, crossing a more recent channel.  After tomorrow's hike, a dovish "3 hikes this year" consensus would get us moving higher to test this trendline.

SPX daily, rising channel into April

What fun out in the St. Patrick's Day parade here in Seattle.  One of these kids is mine.



10 comments:

Christian Gustafson said...

Of a student body of roughly 480, Whittier has roughly 150 students who can ride the unicycle.

We'll be out again in the Syttende de Mai parade (Viking-Americans) through the Ballard neighborhood in May.

Hugh Jazole said...

Caldero has had oil in a "downtrend" for ages now. Strangest downtrend I've ever seen. I'm thinking we head higher into the Spring, transports may be giving us the wink and nod.

Kevin Wilde said...

That, I believe, is the alternative count. The sell-off in February looks perfectly impulsive to me. And the rebound since pure overlapping A-B-C type of action. So I prefer to respect the bear potential here - respect that impulse move in February - though I would certainly be open to one final sucker move to new highs if technicals start to improve. Market closed in very vulnerable position today. Thus, Missouri "show me" tis the plan.

Christian Gustafson said...

We tagged the lower bound of the ascending channel in the 2nd chart today, but did not break it.

Kevin Wilde said...

Do or die time for the bulls, with the crash on if the Industrials break below the 200 day moving average 600 points below current levels. A crash is a 4 day event below the 200 day, with the crash itself usually landing on day 4. The lack of buying today suggests an UBER driver has been put in charge of the plunge protection team...

Depriv said...

Yes, something like that.
However: with respect for the (indeed existing) bear potential, this phase of an accelerating bubble is not about the bulls anymore. It's already about the cornered 'early bears'.

Just check the story of Adolf Merckle and his Volkswagen shorts...


Also, at this point it is futile to bet on target prices. As long as there are enough bears betting, it'll just fly.

Kevin Wilde said...

Don't forget about the YEN bears, because that is where the big money is, and those bears are massive in numbers, and currently getting killed. Forced margin calls over there is what gives us the forced margin calls over here that brings the house down. Tis all about the YEN...and the YEN carry trade...

Christian Gustafson said...

Lead us to the Promised Land at 3060, Donald!

Kevin Wilde said...

Martin Armstrong just did a private blog post for the Dow.

First off, his system is a support and resistance one on many time frames, as well as cycles.

Cycles were looking for a turn March 19 week, which was this week. Next big one is May - panic cycle month - and then July.

He's currently in the camp that this is usual corrective type of action, which we should expect till mid-year this year.

Forget about a crash - which he words as a meltdown rather than a crash (hey, thanks for not scaring me ) - while the Dow Industrials remains above Dow 22,417 level. That gets breached, then meltdown is on.

He's more interested how March ends - next Friday - with a close above Dow 24,740 needed to end the correction, while a close below Dow 23,486 raises melt-down risk (and nixes such risks if we close above 23,486 next Friday.

He mentions Draghi will be mired in crises well before he leaves in 2019.

He also mentions that the budget deal snuck in a bailout of over 200 failing pension funds, which raises the question of the underlying problem politicians know about, yet no one dare talk about.

If I hear more, will post more...

Suren said...

Kevin:

Armstrong's panic cycle in May 2018 can also be a "melt-Up" panic to the upside. It doesn't necessarily need to go down as we typically understand the word "panic." At the same time, he states that the first half would be range bound and won't go up much. This puts a May low back on the radar.

Hard to decipher the stock market direction as I stated before. Traders are always left scratching their heads as to whether to buy calls or puts.

Suren