Sunday, December 2, 2018

Competing counts

We're at one of those junctures where we have plausible setups for both bullish and bearish outcomes, on different scales.

can't beat the Chow Yun-fat

The reason is the impulse wave the S&P 500 has drawn since the 2630 low around Thanksgiving (Full Moon).  Is it the c-wave of a long-in-tooth wave 2 up?  Or is it the initial leg of a larger five-wave structure to new all-time highs by EOY? 

Northy thinks the Santa Rally hypothesis is very plausible here and very dangerous (to bears).  The next two days of this week may clarify things: IMO bearish if the market runs higher, and bullish into Christmas if she pulls back sharply.

With POTUS 41 passing, Powell's testimony Wednesday now falls on a day with closed markets.  This adds to the uncertainty.


S&P 500 hourly

42 comments:

Christian Gustafson said...

Classic "Hard Boiled", a real tear-jerker.

Christian Gustafson said...

Just another day in Deflation Land.

Christian Gustafson said...

From a returns perspective, using standardized options, I would actually prefer the bullish Santa scenario from here, as the sharp rally and reversal would be insanely profitable with the right strikes.

T.Berry said...

cg, i believe you'll get the bullish santa scenario. we could see a record december in stocks this year to go along with holiday sales. the consumer is in excellent shape and will no doubt be spending big this year. the econ indicators continue to remain robust.

Christian Gustafson said...

All of the wave-counters are craning their necks tonight trying to figure out where a 42+ pt /ES gap up fits into the mix.

Randall Beehomes said...
This comment has been removed by the author.
Randall Beehomes said...

Looks like I become rich tomorrow.

Kevin Wilde said...

If it can't get above SP 2815 on a closing basis then markets in big trouble in the short term. If it can get above 2815 then probably holds that on retests and retests and retests and bulls get to enjoy Santa. That's the way I'm playing it - as trends will be dictated by that - where trends remain negative if SP can't get above 2815, and turn positive if SP 2815 is breeched.

Kevin Wilde said...

As for Santa rally, remember the wave C of 2 hit December 24 2007, and was all down hill after that for more than a year. Are we in for a repeat here to suck in all the bulls right before the big one hits?

Randall Beehomes said...

2800 never again

T.Berry said...

patience kevin, 2815 is going down. sorry randy : )

Christian Gustafson said...

We have inversion on the 2s-5s now and are very close to a Death Cross on the daily S&P.

Powell testimony cancelled for Weds; he must be nervous about the New Moon.

Hugh Jazole said...

All of this boo hooing, and butt kissing of GHWB is sickening! Good riddance to a traitorous POS.

Hugh Jazole said...

Look at that 10-2 spread. Whew boy!.

https://ycharts.com/indicators/210_year_treasury_yield_spread


Randall Beehomes said...

I could not agree more. Apparently everyone loses their ability to think when someone dies

T.Berry said...

sold aapl 184.25 in ah +5.7% in 4 days.


thanks siri!




Christian Gustafson said...

Well-played, sir. Take the bacons.

Depriv said...

Correct analysis, in both alternative.

Just for the log: right now the mid-TF internal structure suggests a bearish outcome.
The big TF structure would allow a bullish motion, but it is not required for a complete structure.

john said...

2800 kryptonite haha

Christian Gustafson said...

By the way, the bullish resolution to this -- a rocket-shot to 3060 or whatever by year's end -- is still very possible.

The roaching today may very well have been a wave 2 -- it retraced roughly .6 of the advance from the 2630 low.

Kevin Wilde said...

Yes, but 5 wave down from Monday peak look's impulsive to me. Which suggests a rally to 2730 Thursday that does the near double bottom thing that leads to a c wave rally back to 200 day at 2750 to complete that ii wave. Then watch out below.

Bryan Franco said...

KW. Yup

Hugh Jazole said...

When does the rally start?

Christian Gustafson said...

Waiting on the right Trump tweet.

Did POTUS call for this, or was it done by the DOJ in NY to undermine him?

Iran is our enemy? ORLY?

Randall Beehomes said...

My father is Iranian!

Kevin Wilde said...

Looking at an intra-day chart of the Dow Transports I see 5 waves down from Monday's peak that is in the process of completing. If so, we should see some relief for the bulls here over the next couple of days.

However....

All depends on the Dow Industrials holding above 24,200 by the close today. Any hard break of that today would keep us on the 1987 crash path, which would be confirmed if tomorrow saw an acceleration of the selling, to set up Monday as the Big One.

I believe in the message of the Dow transports, which calls for an A-B-C partial recovery rally before we get to the meat of the bear. The Dow Industrials may have a different opinion, where are hard close of 24,200 would suggest there's a Lehman out there.

T.Berry said...

aapl $171.77
yum!

Kevin Wilde said...

Aapl at 150 might be a good buy, though looks headed well below 120 to me.

I would wait till the mid-December cycle turn buy point before pulling the trigger on any new longs.

Hugh Jazole said...

December 4th: S&P 500 Bullish Percent Index crosses above 50

December 6th: S&P 500 Bullish Percent Index crosses below 50

Very weird action.

Christian Gustafson said...

Do any of you mooks want to buy my great-grandparents' home?

Nice place.

T.Berry said...

kevin,
i believe 171 will get me at least a quick 4-5% without much problem. think the bottoms in as the selling has been way overdone. santa's turn

Hugh Jazole said...

"Do any of you mooks want to buy my great-grandparents' home?" A little too close to Chicongo for my taste. I'm thinking they will have to reduce that price just a tad.

Hugh Jazole said...

So long BTC.

Randall Beehomes said...

Goldilocks jobs numbers. Hope that cunt Powell sees we must have lower rates to help STAWKS

Christian Gustafson said...

Crash puts acquired.

Hugh Jazole said...

"i love your bear market hugh LOL they're the best" Thanks T. Berry!

Christian Gustafson said...

Santa Rally could be a Christmas Crash this year, with Brexit lows -- 1991 SPX -- the target.

We are tracking there nicely.

Path said...

Maybe too soon to accelerate to the downside here...lot of bearishness around...January should fit much better

T.Berry said...

hugh, do you know what a bear market is? lol

Unknown said...

Too much bearishness? Just because Zerohedge is permabearish doesnt mean that is how the entire country thinks. And CNBC was bearish during the financisl crisis and we still had a crash back then.

Path said...

Sure do, patience is key...January not too far away anyway

john said...

2000 baybay