Monday, July 30, 2018

Check that, let's do 2750 this week

Just noticed that the move to 2848 on the SPX last week put in a higher RSI.  That's bad news for anyone looking for a final top, because we should see a higher high on the index with a lower RSI -- an important divergence at any significant top.

bad AAPL earns ahead

So we can instead expect a dive to 2750 on the S&P into Wednesday FOMC, a weakening position from the Fed, and one last moonshot into next week, finishing at a slight new ATH with the August New Moon.  A short, sharp 5th wave to new highs, Bollinger Band touches, the upper wedge trendline, and, importantly, divergences on the RSI with both the 2848 and 2872 highs.

2750 is also the perfect .382 retrace of what we can now see was the W3 in the sequence off the April lows.

S&P 500 sharp 5th to the New Moon

Then we can resume the planned trajectory, start breaking down supports in earnest, as we make our way back to firm support at 1810.

Saturday, July 28, 2018

Respect the harami! Let's visit the 200.

Thursday saw the inside-day harami candle on the SPX, a very important sign here.

Let's ease off the speed of the doom a little and propose one more bounce this week off the support at the 200 DMA, lower daily Bollinger band, and channel support at ~2699 on the S&P 500.  This can then retest and reject the old channel (8/8 or so) and finally crush the 200.

We can then complete a 5-wave impulse to the larger channel support -- the core channel of the rally -- into the end of August, giving us a wave two bounce up through September back to the 200 DMA, this time as resistance, precisely at the September 26 FOMC meeting and press conference.


Wednesday, July 25, 2018

2000 top redux

Go back and look at the top from 2000, daily candles on the S&P 500, with the spike high and the 5-wave move that failed to best it.  That's what we have seen now since the end of January. 

With a similar slope to the sell-off in early February, we're looking at a first low at 2445 SPX, two weeks from now.  There is channel support from the ancient trendline on the S&P through the lows at 1074 and 1810! 

From there we'll visit the 200 DMA as overhead resistance instead of support, and August should shape up to be something truly special.

I can't wait to see the QQQ back at $20 next year.  Oh, you thought these companies were worth something?

SPX completed 5 wave channel -- failed 5th

Saturday, July 7, 2018

Book thread -- what's on my shelves?

Summer reading time.  What's on my shelves?

I'm just crazy about this cool one-volume edition of Spengler printed by George Allen & Unwin in 1934, which I ordered from a bookshop in Brighton, UK.  How I love this press.

Oswald Spengler, The Decline of the West,
London: George Allen & Unwin, 1934

You should use a 500 million DM Weimar note as your bookmark when you read von Mises.

Ludwig von Mises, The Theory of Money and Credit,
New Haven: Yale UP, 4th printing, 1963

I'm reading this cover-to-cover at the moment.  Volume 2 has always been good for its tales of the camps and the White Sea Canal, but you really need to read all of Gulag to understand our enemies.  I found this at a thrift store on Mercer Island, WA, for $10.

Aleksandr I. Solzhenitsyn, The Gulag Archipelago,
New York: Harper & Row, 1974, 1st ed


Goethe, Works: Gottingen Edition, New York: W. I. Squire, 1901

und Schiller

Friedrich Schiller, Werke in vier bänden,
Hamburg: Hoffman und Campe, 1957

John Stuart Mill, Principles of Political Economy, New York: Appleton, 1868

Talcott Parsons, The Social System, Glencoe: The Free Press, 1951 1st printing

Devereux Bowly, Jr, The Poorhouse: Subsidized Housing in Chicago,
1985-1976, Carbondale: Southern Illinois UP, 1978

Arnold R. Hirsch, Making the Second Ghetto: Race & Housing in Chicago,
, London: Cambridge UP,, 1983

Count Eric Oxenstierna, The Norsemen, New York,
NY Graphic Society, 1965

Ending-diagonal 5th wave finishes up EOM July

It looks like we can close the gap on the S&P 500 right into the first US GDP release at EOM July.

If w4 of the ending-diagonal ended at ~2692 on the S&P, the minor w5 will equal the w1 and fill the chart gap up around 2856.  Then we can begin our trip back to real support at the 1810 level this fall.

S&P 500 daily


Adding an alt in case the larger W4 did indeed resolve as a triangle.  This would drag the ending-diagonal out for more time, taking it close to FOMC season in September!  Still looking at Q2 GDP as a minor turn, though, but 20 pts higher than the 1st chart.  We would also see new ATHs on the S&P.

S&P 500 alt count with larger W4 triangle