I'm looking for a big 5 wave down move for all stock indexes. Where we sit by the time all 5 waves are in determines if we are in a new bear market, or new highs are coming. Thus, in EW terms, the 5 wave down move would either be a C wave of a 4,or wave 3 of a new bear, which is the crash wave. SP targets 2400 for the 4, and 1800 for the new bear 3. Me thinks, the 4 has a higher probability, though the pattern since the Jan peak is so perfect for the new bear 3 crash to be it. As always, something financially blowing up is what gets us in bear misery, and while the news today is Italy, I think the bigger news story to come remains a total surprise, just as Iceland defaulting on US mortgage debt was the surprise dying of the canary in the coalmine that started the 08 collapse.
need to worry if small caps lag, however they are leading and continue to lead which is a very good sign (if you're a bull), may be the signs of a new bull market starting------
"In fact, many strategists consider small stocks — which are the first to surge in a new bull market but are also the first to start lagging before a bear — Wall Street’s canary in the coalmine.
If you look at five of the past six bear markets, each occurred shortly after shares of small companies trailed large stocks by at least 10 percentage points."
the close below 2711 yesterday looks to have been just another bear trap. hope no one got caught
SP500 highlight US institutional money flows - AKA smart money
Dow Industrials highlight European money flows - driven by the EURO
NASDAQ highlights leveraged debt trading from Japan - driven by the YEN
Semis, brokers, financials, transports, copper are known as leading canaries in the coalmine.
So what does the RUT 2000 making new highs while all others are not? Negative divergence where smart money is selling into rallies while the dumb money keeps buying.
SP once again testing 100 day MA at 2711, after failing once again to above 2740-60 XLF testing its crash-line. Wave 2s appear to be finished in NAZ, SP, and semis. Watch out below....
IMHO there is no such thing as a failed 5th wave, and simple miscounting. Such near-double top moves should, IMHO, be counted as either a B wave of an A-B-C pattern, or 2 of EW 1 and 2 top.
That's what I see here: a 1 and 2 top, with the current wave a C wave of that 2. If so, we smash to SP 1800 in a hurry, with lower prices to come after that.
The alternative count is a B wave here, with a C wave to come, targeting SP 2400. That would be followed by a move to new highs.
I favor the bear count, because there's more than enough 5 waves in place off the 09 lows for the January peak to be it (March for the NAZ.)
Either way, I agree we face a major buy opportunity in the fall, with the prime question just how low we go between now and then.
The RUT trailing prior to other bear markets was simply coincidence, as all others KNOWN leaders were trailing too back then. What you're saying is one canary living - currently on its last breath - over comes the death of nine other canaries.
CG re XLF...thanks for the heads up...just plugged XLF into my weekly and monthly charts...you are correct...there really is a surprise coming!
on another note, several months ago was introduced to the work of two financial astrologers...independently they both have been pointing to this time frame (June 1 - June 5) for a significant high...
FOLLOWUP...just plugged the following symbols into my weekly and monthly charts: GS (Goldman Sachs), JPM (JP Morgan Chase), MS (Morgan Stanley) and C (Citibank)...NYSE isn't looking particularly bullish either...WOW!
"On Friday, 6/1/18, market participants and business news outlets are giddy over the US Monthly Jobs report. The 223K jobs are above the 190K consensus but the prior month’s weak 164K jobs are revised lower to 159K. Funny how no one mentioned that. Nobody wants to be the wet blanket at the jobs report party.
Wages only met expectations at +2.7% year-on-year a pittance as all of you working stiffs will agree. When is the last time you received a substantive raise? The Federal Reserve does not tell you that wages need to grow at a +4.0% to +4.5% and higher pace to sustain inflation. The wage numbers remain low for many years and are not even above +3.0%.
Overall inflation cannot exist without wage growth. The grand nine-year monetary policy experiment by the Federal Reserve has not created inflation."
3.8% unemployment rate lowest in 19 years. there are now more job openings than the total number of unemployed workers which may have never before happened. that is truly amazing and reflects just how strong this economy is.
plus 10k baby boomers turning 65 everyday and a good amount retiring as stocks and home prices are at all time highs.
as for inflation, the fed has done an outstanding job managing it since the financial meltdown. wages are continuing to creep up too.
overall, the us economy hasn't been this good in decades and the outlook remains robust for the foreseeable future. this bull has a looooong way to go hugh.
thanks hugh, that would put to the sp at 2297 to get the bear started. (575 points or 20% drop from peak).
plus we have the russell and nasdaq hitting new all time record highs and the sp & dow jones about to follow. a very bullish sign. i believe its only a matter of time before all 4 indices are hitting new all time record highs in lockstep.
in addition our potus the don isn't going to let the mkt drop that much before the elections this fall.
at best i think now that earnings are over and after a nice 4-7% gain, we could see a 2-3% pullback before we kick off q2 earnings in early july.
gl hugh and be very cautious shorting the strongest bull market in history : )
depends on what you consider a crash cg. sure we'll continue to see 4-5% mini-crashes along the way but more new highs are coming before this bull is over. but as for a 20+% crash i don't see that happening for at least a few possibly more years.
the nas and russell continue to lead the way towards more new all time record highs and soon the sp & dow jones will follow. as long as the fundamentals remain strong this market is going to continue climbing higher.
good to know cg, however with the support of the circuit breakers, the fed and the donald don't see the market ever going below 2400 (possibly 2500) baring an all out world war.
sp up over 8.2% on an annualized basis so far in 2018. already up 2.5% in june in just 4 days (after the bradley date)----i really thought we'd pull back after such an amazing run up into earnings but stocks still seem to remain undervalued given both earnings and the outlook for the remainder of the year. the economy remains strong and getting stronger as unemployment rates continue to plummet to historic lows!!!!
looking forward to a stronger 2nd half of '18! ( sorry hugh :) ) your odds to win the the 4th annual first to say "you just wait till next year tberry" just increased! lol just kidding,,,, in all seriousness wish you the best!
the returns so far could be better but not bad for a churn year.
43 comments:
Waiting waiting waiting for new highs ... time is up.
I'm looking for a big 5 wave down move for all stock indexes. Where we sit by the time all 5 waves are in determines if we are in a new bear market, or new highs are coming. Thus, in EW terms, the 5 wave down move would either be a C wave of a 4,or wave 3 of a new bear, which is the crash wave. SP targets 2400 for the 4, and 1800 for the new bear 3. Me thinks, the 4 has a higher probability, though the pattern since the Jan peak is so perfect for the new bear 3 crash to be it. As always, something financially blowing up is what gets us in bear misery, and while the news today is Italy, I think the bigger news story to come remains a total surprise, just as Iceland defaulting on US mortgage debt was the surprise dying of the canary in the coalmine that started the 08 collapse.
patience cg, there will be more, many more.
lovin' this 5 wave down looking forward to many many more!!!
o-fer
hey bryan, the russell hit another ath ,
just a matter of time now when the sp & dow jones follow suit. maybe after the summer crash?
:)
Anyone actually own the RUT 2000 - or any index - making new highs? Anyone?
Negative divergence is a major element at turning points.
Nenner: close below SP 2704 confirms sell signal, and cycle remains down.
Armstrong: EURO crises unfolding as expected
Still in wait and see mode. This could go on for a while. Maybe we need the Fed to hike 2 or 3 more times before we see a significant sell off.
need to worry if small caps lag, however they are leading and continue to lead which is a very good sign (if you're a bull), may be the signs of a new bull market starting------
http://time.com/money/5017186/small-cap-indicator-bear-market/
"In fact, many strategists consider small stocks — which are the first to surge in a new bull market but are also the first to start lagging before a bear — Wall Street’s canary in the coalmine.
If you look at five of the past six bear markets, each occurred shortly after shares of small companies trailed large stocks by at least 10 percentage points."
the close below 2711 yesterday looks to have been just another bear trap. hope no one got caught
strike 3
since the sp began consolidating back on may 2 it's up 3.4%. it could have gone up higher but there was a lot of panic selling going on.
pretty nice move either way.
Small caps highlight retail investor money flows - AKA dumb money
SP500 highlight US institutional money flows - AKA smart money
Dow Industrials highlight European money flows - driven by the EURO
NASDAQ highlights leveraged debt trading from Japan - driven by the YEN
Semis, brokers, financials, transports, copper are known as leading canaries in the coalmine.
So what does the RUT 2000 making new highs while all others are not? Negative divergence where smart money is selling into rallies while the dumb money keeps buying.
SP once again testing 100 day MA at 2711, after failing once again to above 2740-60 XLF testing its crash-line. Wave 2s appear to be finished in NAZ, SP, and semis. Watch out below....
Are we right on the edge of failed 5th waves on three different timescales?
If this has follow-thru here, I'll explain why tonight.
IMO we can unravel this entire mess (and more!) by September FOMC to force a new QE policy.
IMHO there is no such thing as a failed 5th wave, and simple miscounting. Such near-double top moves should, IMHO, be counted as either a B wave of an A-B-C pattern, or 2 of EW 1 and 2 top.
That's what I see here: a 1 and 2 top, with the current wave a C wave of that 2. If so, we smash to SP 1800 in a hurry, with lower prices to come after that.
The alternative count is a B wave here, with a C wave to come, targeting SP 2400. That would be followed by a move to new highs.
I favor the bear count, because there's more than enough 5 waves in place off the 09 lows for the January peak to be it (March for the NAZ.)
Either way, I agree we face a major buy opportunity in the fall, with the prime question just how low we go between now and then.
hope we get one of those 50-90% crashes like last fall. that was a winner.
new highs? it's a churn year. LOL
The RUT trailing prior to other bear markets was simply coincidence, as all others KNOWN leaders were trailing too back then. What you're saying is one canary living - currently on its last breath - over comes the death of nine other canaries.
Are you long RUT or closer to the SP, which can't get above 2740-60 resistance?
FWIW I remain long QQQ - as trend remains up for now - while hedged with TZA and TVIX - since risk remains extreme.
$XLF knows
There is good support at 1810 on the S&P 500.
CG re XLF...thanks for the heads up...just plugged XLF into my weekly and monthly charts...you are correct...there really is a surprise coming!
on another note, several months ago was introduced to the work of two financial astrologers...independently they both have been pointing to this time frame (June 1 - June 5) for a significant high...
I expect a Peak over 2742 Spx before a Major plunge. That my Pov.....
Watch the 2742-2770 area
... while Gold is back to 1250 area and kick off to 1370 :-)
FOLLOWUP...just plugged the following symbols into my weekly and monthly charts: GS (Goldman Sachs), JPM (JP Morgan Chase), MS (Morgan Stanley) and C (Citibank)...NYSE isn't looking particularly bullish either...WOW!
If you're looking for a WOW in the financial sector, visit this web page and scroll down to view DB 2017/18 overlaid with Lehman 2007/8.
http://realinvestmentadvice.com/treading-water-06-01-18/
http://realinvestmentadvice.com/wp-content/uploads/2018/06/2018-06-01_10-44-02_0.jpg
WOW, the nasdaq is now 755 points above the 6850 top. only dumb money sells at the top!
more hedge money ending up in hedge money heaven. lol.
sp up 2.2% since the bradley turn 4 days ago.
"On Friday, 6/1/18, market participants and business news outlets are giddy over the US Monthly Jobs report. The 223K jobs are above the 190K consensus but the prior month’s weak 164K jobs are revised lower to 159K. Funny how no one mentioned that. Nobody wants to be the wet blanket at the jobs report party.
Wages only met expectations at +2.7% year-on-year a pittance as all of you working stiffs will agree. When is the last time you received a substantive raise? The Federal Reserve does not tell you that wages need to grow at a +4.0% to +4.5% and higher pace to sustain inflation. The wage numbers remain low for many years and are not even above +3.0%.
Overall inflation cannot exist without wage growth. The grand nine-year monetary policy experiment by the Federal Reserve has not created inflation."
Keystone Speculator
3.8% unemployment rate lowest in 19 years. there are now more job openings than the total number of unemployed workers which may have never before happened. that is truly amazing and reflects just how strong this economy is.
plus 10k baby boomers turning 65 everyday and a good amount retiring as stocks and home prices are at all time highs.
as for inflation, the fed has done an outstanding job managing it since the financial meltdown. wages are continuing to creep up too.
overall, the us economy hasn't been this good in decades and the outlook remains robust for the foreseeable future. this bull has a looooong way to go hugh.
well the nasdaq is the first to follow in the russells footsteps. another new all time record for the nas. sp & dow jones are on deck.
btw hugh are you still calling for a summer (2018) crash?
hugh, how much do stocks go down during a schadenfreude?
tia
"btw hugh are you still calling for a summer (2018) crash?" Not a crash, just a bear market beginning this summer.
thanks hugh, that would put to the sp at 2297 to get the bear started. (575 points or 20% drop from peak).
plus we have the russell and nasdaq hitting new all time record highs and the sp & dow jones about to follow. a very bullish sign. i believe its only a matter of time before all 4 indices are hitting new all time record highs in lockstep.
in addition our potus the don isn't going to let the mkt drop that much before the elections this fall.
at best i think now that earnings are over and after a nice 4-7% gain, we could see a 2-3% pullback before we kick off q2 earnings in early july.
gl hugh and be very cautious shorting the strongest bull market in history : )
You thinking we touch the weekly SPX BB before we crash, Mr. Berry?
That New Moon on FOMC next week has all the hedgies worried.
depends on what you consider a crash cg. sure we'll continue to see 4-5% mini-crashes along the way but more new highs are coming before this bull is over. but as for a 20+% crash i don't see that happening for at least a few possibly more years.
the nas and russell continue to lead the way towards more new all time record highs and soon the sp & dow jones will follow. as long as the fundamentals remain strong this market is going to continue climbing higher.
support @ 1810, sir
more hedge $$$ ending up in hedge heaven. lol. been a rough 2 months.
good to know cg, however with the support of the circuit breakers, the fed and the donald don't see the market ever going below 2400 (possibly 2500) baring an all out world war.
sp up over 8.2% on an annualized basis so far in 2018. already up 2.5% in june in just 4 days (after the bradley date)----i really thought we'd pull back after such an amazing run up into earnings but stocks still seem to remain undervalued given both earnings and the outlook for the remainder of the year. the economy remains strong and getting stronger as unemployment rates continue to plummet to historic lows!!!!
looking forward to a stronger 2nd half of '18! ( sorry hugh :) ) your odds to win the the 4th annual first to say "you just wait till next year tberry" just increased! lol just kidding,,,, in all seriousness wish you the best!
the returns so far could be better but not bad for a churn year.
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