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

84 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.

Anonymous said...

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

Anonymous 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

Anonymous 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.

Anonymous 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

Anonymous 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.

Anonymous 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.

Anonymous 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

rotrot said...

http://financialsurvivalnetwork.com/2018/12/charles-nenner-were-in-a-bear-market/

"We’re in a Bear Market" - Charles Nenner | December 10, 2018

"2555 is the low Dr. Charles Nenner expected on the S&P. He’s been out of stocks since January and thinks the decline will continue into first quarter of 2019. Today’s earnings look bad and the Treasury yield is down. Unemployment peak is negative for the economy. the smart money is moving out of the market and has been for quite a while. 60 year social unrest cycle has appeared (remember the 1960’s) and it’s just getting started. Oil price is telling us deflation is on its way. Commodity cycle is turning down. Long term oil is coming down to mid 30’s, Copper is coming down as well. Ag commodities look good in the long run. Home builders recent sharp decline is a great indicator of real estate cycles. Stay tuned!"

LISTEN TO THE AUDIO...NO REVISIONIST HISTORY GOING FORWARD...NENNER SAID WHAT HE SAID!

rotrot said...

https://stockcharts.com/public/1957888

Exceptional Bear | 11 December 2018, 4:27

"1b $SPX - S&P 500 Daily 2" Forecast - Rally to the area of the all-time-high (2940.91) followed by a plunge to the 2000-1900 area
https://stockcharts.com/public/1957888/chartbook/635328009

PRINT THE CHART...NO REVISIONIST HISTORY GOING FORWARD...EB'S FORECAST IS CRYSTAL CLEAR!

Depriv said...

Far too early to take this as a bear market. The RSI on monthly chart is talking about sideways movement, the quarterly is still solid bull. Channels were not broken, no backtests, no nothing yet.
There is only a strong _chance_ for bear market right now, but till it gets confirmed we still has some months (!!!) left.

Randall Beehomes said...

Rallies now have a shorter half life than the Ativan that sustains me

Christian Gustafson said...

Dearest Santa --

Could I please have the S&P 500 back at 2083 for the FOMC next week? I don't think it's too much to ask.

ty

cg

Kevin Wilde said...

Rotrot, thanks for posting the Nenner and Ex B alerts. However, please note that both update their calls in the shorter term, and it those calls that are useful to traders, rather than trying to pin the donkey's tail on the big one. Or at least base judgement on their calls in the same time frame they are made. If one calls the big one - like Nenner's Dow 5000 by 2021/22, then one has to wait till 2021/22 before saying he was wrong (or right.) Ex B shows shorter term calls near the bottom of his public page at stockcharts, while Nenner offers some shorter term calls on twitter.

T.Berry said...
This comment has been removed by the author.
T.Berry said...


Blogger Kevin Wilde said...
If one calls the big one - like Nenner's Dow 5000 by 2021/22,
December 11, 2018 at 9:07 AM



Blogger Kevin Wilde said...
Big calls, like Dow 5000, come with a big timing window, with this one targeting 2020/21.
November 13, 2018 at 3:02 PM



lol. just last month it was 20/21 now 21/22. lol. he's been kicking his dow 5000 can since 2013. with plenty of bad calls since.


i do appreciate you posting his call for dow 5k, i'm going to get worried when they stop
:) the markets up quite a bit since 2013 : )

Christian Gustafson said...

We still can't rule out 3046 on the S&P, the 2.618 fib extension of the 2008 crash. We're stuck in this hideous chop zone.

rotrot said...

there is a BIG difference between facts and opinions...the factual record clearly indicates that Nenner and EB have abysmal track records...Tweets...public charts...laughable!

on another note, reference is made to my post on this blog dated November 21, 2018 at 6:24 AM...looking forward to "sometime after the first of the year I will post the 'short the S&P500' date"...

Kevin Wilde said...

===lol. just last month it was 20/21 now 21/22===

That was my typo, so don't put that on anyone else. Dent, I believe, has 21/22 has the bottom, so that's where MY confusion comes from.

Rotrot, I thought the point of you posting Nenner's podcast, and Ex B write-up, was you had a clear call that you/we could judge and hang our hat on. All I said was following the shorter term calls was a better gauge, as we get to anyone big one one trade at a time. Bigger calls also come with a bigger date, and we have to wait for that date before making a judgement. Seems to me you've already making judgement. I've followed Nenner and Ex B for over a decade, and found them very useful to me, helping to make me money. Of course some people only trade one way - up, up, up - so I understand why they pan people who say some down is coming. Though for traders, cycles, and patterns, are useful. Hence my following of people like Nenner, Ex B, Christian etc.

Do you'all have any opinion of the market? Or do you simply get your fun out of life panning others who do?

Kevin Wilde said...

Christian, still looks like downside impulsive to me, and we have yet to see any rally day that isn't sold into, thus wave 3 down remains on the table, though a spike down that reverses to complete the first wave down (thus v of 1 or big A) is also a top possibility.

T.Berry said...

hey hugh, i hope your bear market never ends lol

Skeptical said...

Appreciate your insights, KW. I think there is huge resistance back at ATHs, and everyone knows it. That doesn't mean we can't get back there though.

Kevin Wilde said...

Intra-day pattern remains very choppy, with zero sign of impulsive bullish action yet. Worse, for the bulls, is smart money continues to sell whenever the dumb money buys. Smart versus dumb money is a real thing, and while I have my own version of it, you can google to see charts of how that currently looks. When money trends change, the bulls will get to enjoy some respite to their misery, though till then, watch out below will remain the watch words.

Randall Beehomes said...

Total abortion of a close

Anonymous said...

Anyone care to explain this BTC chart?

https://www.investing.com/crypto/bitcoin/btc-usd

Depriv said...

Regarding BTC: many says that this drop of value is the end of the thing. What I say is, that I don't know. Bubbles are doomed to burst, but on the BTC chart it is already the third time. If you check the monthly chart, 2012 April has one peak with the exponential acceleration before and the crash after: then it is the end of 2013: then now. It could recover from the first two and start a new accelerating phase. What if it will just consolidata and start a new acceleration phase, up to 100k? And what if it would just end like the tulip-bubble?
I just simply don't know. No clue, no idea.

However, what I _do_ know is that right now the risk is far too big for both scenario, so now is not the right time to start a position.

Depriv said...

Oooops, the first was April of 2013.

Anonymous said...

BTC looks like it flash crashed right off the chart.

Anonymous said...

After the market bottoms early in the first quarter, the rest of 2019 will be bullish. Fight me.

Kevin Wilde said...

Think of bitcoin as a massive wave 1 and 2 like he US stock market in the 1920s and 1930s. Bubbles go from where they began when they crash. Bitcoin broke out near the 1000 level, so that would be the initial target, though we likely smash through that for a while. That might be a good place to enter, though remember you could be looking at a chart of Studebaker and not Ford from the 30s (as in, block chain survives to thrive, though maybe bitcoin doesn't.)

T.Berry said...

good luck with that call hugh. hopefully it'll work out better than your "summer 2018 bear market" one did.

2019 should be a great one for the bulls. the bull will enter year 11 with several more to go. history is being re-written every day as this bull continues setting historic records.

sp 4000 is coming

Kevin Wilde said...

One thing to watch for is a fake out move to new lows that takes a step down the crash path, then reverses. Such a pattern could ending diagonal triangle of some kind, in indexes like the trannies and Rut 2.

Interesting, perhaps, Nenner's upside target for the peak was 2938, and for many weeks it look like it wouldn't get there, and the slide begin within hitting his target. Then one day it simply inched up to hit it, and then all downhill since.

Now Nenner's target for the low here is SP 2555. We hit 2590 intra-day Monday before we bouncing back. It wouldn't surprise me here to see the markets bleed like death by a thousand cuts towards new lows to his 2555 target to land the bottom.

Everyone will be expecting a crash by then, though that would still be a tad above the 2529 lows seen in February.

Of course we may just blow through all of these and crash, though right now this smells of a market that wants to slowly slide into the crash zone then snapback, with Nenner's 2555 target a reasonable target for max pain as a prelude to a tradeable bottom.

He also sees oil bottoming next week, with 49.5 target (dec contract) so watch for that.

T.Berry said...

next week between santa coming and the fed pausing on rate hikes in 2019, we could see a rally of epic proportions. you heard it here first!

Kevin Wilde said...

I heard Santa is hiding in a bear cave refusing to come out :)

Unknown said...

That is what I can see happening too Kevin. It'll start to crash by Wednesday, but the Fed will decide not to hike that day, and the markets will 180 violently, dip buyers will fomo and bring the markets to new highs, but at the expense of a hurt dollar and gold breaking $1300.

If that happens then the markets will never see a crash for a long time as the Fed will never hike again, and a new quantitative easing program will eventually follow as it'll become clear the Fed will save the markets at any cost.

Kevin Wilde said...

The moral is, as the great Marty Zweig put it, don't fight the FED, and don't fight the trend (with me adding: don't fight the FED, unless the stock market is fighting the FED, then OK to fight the FED.)

Right now the FED is tightening, and the stock market is not fighting that, by being in a downtrend.

When these two change, we shall change.

Randall Beehomes said...

Blackish Monday status possible intact

Christian Gustafson said...

2083 on Tuesday, sir.

Anonymous said...

That would be a major buy imho, at least for the better part of 2019. I doubt we'll get that low though. We're setting up in a similar way to 2016 into 17. We all know how that turned out. The latest AAII survey has bullish sentiment at 20% below historic average. That's a pretty rare event, and suggests we're getting close to a bottom.

Anonymous said...

"hey hugh, i hope your bear market never ends lol" Why would you hope a bear market never ends? That's not cool.

Christian Gustafson said...

What if there was nothing at all underneath these markets?

The right close today sets up a Black Monday scenario, yes.

T.Berry said...

hugh, we're not in a bear market!

Christian Gustafson said...

We may be in one very soon, though.

Christian Gustafson said...

In case of emergency.

Anonymous said...

If one waits until a bear market is over to call it, did one really call it?

T.Berry said...

until we go below 2,352 we're not in a bear market, we're still in the longest bull market in history.

the bears still need another 10% for the bear to begin. don't see that happening for quite a while as the s&p has been the strongest of the 3 major indexes.

expecting a very big up move next week

Christian Gustafson said...

"We don't want your drugs here, Louis."

Christian Gustafson said...

... checks fibs

I'd be happy with a low of 2333 on the S&P next week. That would declare the new Bear.

Kevin Wilde said...

For your viewing pleasure I posted my TA take at daneric's just now (not sure why we can post charts there though not here.)

http://danericselliottwaves.blogspot.com/2018/12/elliott-wave-update-12-december-2018.html#disqus_thread

Christian, looking at the NASDAQ, what do you think about us being in a B wave retest - break of A wave lows - here, before we snap back into C wave to complete wave 2?

Of course, major new lows would us into something way more dire now, though that needs to see how next week plays out to know that.

Kevin Wilde said...

T.Berry, NASDAQ 6770 confirms we are in a bear market, though we likely bounce for a while at that point. Bear markets come in two forms: down 20% minor variety, and down 80%+ major.