Saturday, July 7, 2018

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


Christian Gustafson said...


Christian Gustafson said...

We will let RSI be our guide for reading how the ending-diagonal counts and how many waves are left in it. It should show peak RSI in its third wave, with a lower RSI for the higher index high and a key divergence in the 5th wave.

Other divergences, breadth, etc, are also welcome.

T.Berry said...

still don't see any reason to sell this bull market. we're going to see new ath's over the coming months. q2 earnings will be very good imo as will the outlooks going forward. the economy is continuing to get stronger and don't see it slowing down for a couple years.

the fundamentals definitely support markets going higher and that's what drives stock prices. until that slows there is no reason to sell.

Christian Gustafson said...

If it does play out as an E-D, the first target on its completion is a quick return to its origin, so 2594 on the alt count.

It opens up yuge speculative opportunities into EOY, as volatility picks up.

T.Berry said...

that would be a dream dipping under 2600 but with q2 earnings starting just cant see the market dipping that much but if it did the margin truck would be fully backed up : )

at this point i'd be happy to see a dip to 2700 to take my first
bite lol

Bicycle said...

The alt. That's the one. Except it may not be a channel and may instead be more volatile, and will extend to the Nov midterms to own the libs

Christian Gustafson said...

Or there's even a New Moon this Thursday (SPX ~2836) if you're looking for a wave failure and you think It's Time.

T.Berry said...

nas & russell continue leading mkts higher. russell hits another ath and the naz will do so soon. s&p will follow suit. leaders keep leadin'--investing 101 lol

s&p now just 5 pts from the infamous "never 2800 again" lol. only 7% till it takes out the big 3,000 (later this year).

never 2400 again! : ) LOL

T.Berry said...

premarket nibble

thanks iotus

T.Berry said...

pre-mkt it's back to fundamentals . pay no attention to earnings. lol

T.Berry said...

no surprise, nasdaq hitting new ath. s&p soon to follow.

tis the season!

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

nas up 4% and s&p up 3% since the global market warnings back in june.

hint: the us market is the leader, not the follower.

Kevin Wilde said...

Bank earnings are going to be huge. XLF struggling near 2007 highs. Will the big banks rally and take that index to new highs, or continue to provide downside leadership? Note a big up day that fails to follow through is just as dangerous as a bad day.

NAZ the lone index at new highs should be very worrisome to bulls.

ADX lines moving into position to provide HUGE move for stocks, with what happens next determining the direction. Little evidence - so far - to suggest the bulls are destined for that big win, while there's tons of technical evidence to suggests the bear is about to growl for real.

Either way, when the ADX turns up, the markets are either going to fly or die, where following the winner is called for.

I remain long QQQ while hedged, though that will change as what happens next puts an end to the sideways churn we have had to endure all year.

Christian Gustafson said...

I'm just wondering when we get the overnight 10% devaluation on the CNY.

They will do this.

T.Berry said...

nasdaq now 973 points (+14%) above the top (6850) from last November

already the s&p up 3% in 1st week of earnings---

T.Berry said...

in the finance sector beleive regional banks and fin-tech will outperform the big banks

besides tech and small caps are what drives this market

T.Berry said...

down goes "never 2800 again". never say nevar. lol

just 3% till 2900 and only 7% to 3000.

'18 shaping up to be a decent year

nasdaq already up 13%

russell up 10+%

s&p up 5%

expecting a strong second half and finish into year end. double digits across the board.

T.Berry said...

lets not overlook the fact the nasdaq hit yet another new all time record high today. s&p following nicely too

Kevin Wilde said...

Is this the narrowest markets we've ever seen? A nifty 5 compared to the nifty 50 of the 70s?

T.Berry said...

jbht crushes earnings +4.08% in premarket.

pay no attention to the trannies

Kevin Wilde said...

Was that the FANG "pop" we've been waiting for?

T.Berry said...

yep, sure looked like it . naz hits another all time record high (a full 1,005 points above last novembers 6850 "top") and along with the russell continue to lead the markets higher and the s&p is following suit. just 2% to go and only 3% till 2,900 which is on deck.

the market is more than just mooooovies LOL.

fundamentally the market looks solid with plenty of upside left.

still holding on to margin position from july 11--- +3.7%

Kevin Wilde said...

T.Berry, the NAZ sold off at 6850 - as I said it would - and I reentered QLD on that pullback, which I then sold at the January peak, then reentered QQQ at the February lows.

For the more open minded in the group, Martin Armstrong out with saying he is expecting a top in the Dow today - next week at the latest - where a close below 24,800 confirms a retest of support going into an expected October low is underway.

That fits my view of 2018, where sideways churn with a lower lows and lower highs bias leads to a great buy opportunity going into the fall lows. Unless we crash on said correction - which is possible - then bull is dead and the highs in for next decade or two.

I remain long QQQ, while hedged with a little TVIX and TZA. I also bought a starter position in silver via USLV. Armstrong is expecting the next bull bubble to be agriculture, and silver has the best bang for the buck matched with agriculture pricing (due to its link to inflation and currencies. I called for a bear market in precious metals back in the bubble heady days of 2011, and now I'm saying precious metal bear to bull turn is looming large. Since the link with PM and the YEN is strong - and so too the link with the FANGS and the YEN - my expectation is the FANGS go into a bear market as the YEN starts to rise, and precious metals and other commodities become the new market leaders.

Kevin Wilde said...

And any inflation we see is due to currency movement, and not an overheating economy. Stagflation is likely the watch word ahead.

T.Berry said...

Blogger Kevin Wilde said...
T.Berry, the crash point has been set - under last week's low - and that remains the same even if we rally to my NAZ 6729 target, or if we peak today and slide into that day of reckoning over the next week or so. Currency movement have given every stock market crash in history, and this one will be no different, ,,,,,, and a war potential with NK the former. Martin Armstrong - a must follow guru, IMHO - has Sept 11 as a potential war start date, so watch for that. The end is nigh, for sure.

September 1, 2017 at 4:46 AM

Blogger Kevin Wilde said...
Till such a big up day lands, the bulls cannot relax, and when - if - we see such a rally acceleration, a 1987 crash awaits the bulls as the NAZ nears the 6850 level. So big bad bear starting now, or after a run to NAZ 6850, remains the technical story.

October 13, 2017 at 9:38 AM

1000 points above 6850 and still waiting for that crash...and war lol

T.Berry said...

another day another new all time record on the nasdaq. up over 345 points so far in july. s&p now just 60 points from its new all time high. see how nicely it follows the nasdaq and russell? yes, it always does. lol

john said...

I’m convinced that the only thing we need to hit a blow off all time high and start the leg down , bing dang ow style , is for Putin to release from his vaults the video of T-rump banging a cocker spaniel, but then again it would get him re-elected and Melania wouldn’t even care. That is how absurd the markets and politics have become!

Christian Gustafson said...

I'm not convinced we need new high on the S&P 500. Look at the 2000 top, daily candles, and compare it to today.

After the spike high, we dropped, then made a final 5-wave move to a lower high.

Daily and weekly Bollinger Bands SPX are suggesting a final spike up to 2850 around Tuesday of next week. This will also close the gap from January. A lower high here (failed 5th?) would make perfect sense.

Kevin Wilde said...

T.Berry, I understand you have little respect for risk versus reward, though let me try to educate you anyway, since it is important to your investment returns even though you do not know it or care about it.

There's the trend, see, and whether that trend is up or down, the stock market can be overbought or oversold, and those change the risk profile.

In an uptrend, when the market is oversold, it is deemed low risk, and when it is overbought it is deemed high risk. While, of course, the opposite is true when the trend is down, where oversold is deemed high risk (to short positions,) and overbought deemed low risk (to short positions.)

Holding 1X the NAZ on trends itself returns about 15% a year. Holding 2X returns about 30%, though has over 30 instances of double digit losses (since 1972), which is a problem, since they can come back to back and investors find that hard to stomach.

Going 2X the NAZ on low risk (as I defined above) aand 1X the NAZ on high risk (as defined above) returns 35% a year while reducing double digit losses to single digit.

So when I said NAZ 6850 being high risk, it was part of the above analysis, and sold my QLD (2 x NAZ) and then reentered as the NAZ sold off and hit became oversold again. That helped me and subscribers to my Alphaking newsletter 66% last year.

All of this happens in the bigger picture - which I know you have zero interest in, either, though you love to dis those that do anyway, which seems strange? - and the big picture is bull markets turn to bear markets and bear markets turn to bull markets, and so on. Like trend, and overbought/oversold, I have discovered through research the best way to measure those aspects AND THE BIG PICTURE IN RELATION TO BULL V BEAR.

In investing is all about what comes next - what innings we are in - and the bulls continue to climb in the investment equivalent of the kill zone on Everest. Yes, the sun continues to shine and weather looks perfect for a run up Hillary's steps. And that is what people interested in the big picture - and history - like other people on this blog discuss.

What comes next is financial winter, and one is either prepared for that, or are destined to financially die. Has that winter started yet? I don't know. Too little evidence to suggest it has or it hasn't. Though every thing is in place for such a life defining peak to be in. There is also the possibility we have a larger blow off to go, and that is fine with me, since I am currently invested in QQQ, and have a plan to enter QLD if/when the time is right.

With or without that larger blow off move, never forget we are playing in the investment kill zone, and very few have a plan to survive the inevitable end of the current bubble madness.

Christian Gustafson said...

Hillary Step got nuked last year from earthquake fun.

T.Berry said...

hey hugh
have you pushed your bear market call for this summer till next year yet?
if not you may want to give it some very serious consideration

"next year" has been a very popular call since 2012 lol

T.Berry said...

66% you're awesome kevin. probably could have been 100% had you not been been buying tvix for the past year. it's gone from 165 to 38 during that time. how do you make money on tvix? tia

like i said 3 years ago there is very little risk in this bull market. it's the strongest in history and only getting stronger.

if you're a permabear you might not want to read this. LOL

T.Berry said...

pay no attention to goog. lol

so far 90% of companies reporting have beat.

strongest economic expansion in history.

6th inning.

T.Berry said...

naz & russell once again taking out new all time record highs and dragging the s&P along. sp now just over 1% to go till new ath's. follow the leaders.

ytd---naz up 15% , russell 11% and s&p 6%

churn baby churn lol

T.Berry said...
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T.Berry said...
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Kevin Wilde said...

---66% you're awesome kevin. probably could have been 100% had you not been been buying tvix for the past year. it's gone from 165 to 38 during that time. how do you make money on tvix? tia---

The non-hedged trend and risk trading would have returned 70%, on a year that saw zero trend changes, which are very rare.

There are 4 kinds of years. 1) straight up or down (in the bigger sense.) 2) Churn years with moves from overbought to oversold extremes in the intermediate term (says 3 month rallies followed by 3 month sell-off.) 3) churn within shorter times frames, with moves less than 10% in either direction. 4) any of the above that has lots of churn within shorter time frames.

I start each year with 94% following and trading around the trend using a +200% thru -200% allocation model based on trends and risks. 5% trades TNA and TZA against the trend at extremes as a hedge. And 1% in the leveraged VIX products as a hedge trading utra-short term swings. The goal of the hedges is smooth trend turns, make more money overall, includes a get rich quick component when the big one comes.

Compounding is a very important component of above strategy, where years that see little use for hedges such allocation shrinks in value and importance, while the 94% grows in importance and value. In years with many intermediate term swings, the TNA and TZA parts grow in importance. In years with tons of shorter term swings the VIX products grow exponentially in value in importance.

So you're trading one time frame: ultra-long with buy and holding the market, making zero adjustments no matter how high or low the markets go.

I'm trading three different time frames - long, intermediate, and short - over the ultra-long term, where I can long the market (when the trend is up,) long TNA (while the intermediate term trend remains south of overbought extreme,) while short the market via TVIX (when the short term is overbought.)

The three components work independent of each other, and fit like the intricate tick and tock pieces in a Swiss clock.

My current allocation is 94% QQQ, 5% TZA, 1% TVIX. That is because the trend remains up, the intermediate term remains extremely overbought, and so too the short term. Negative divergences abound, and momentum indicators suggest we remain in churn baby churn mode. If so, the next tradeable move is a drop too oversold extreme zone in the short and probably intermediate term. Where the momentum indicators sit by the time we reach that oversold extreme will determine whether we buy for an end of year rally, versus we crash into a new bear.

Kevin Wilde said...

T.Berry, how do YOU make money in a bear market, or a sideways churn market?