Monday, June 10, 2019

Two megaphones

There are two megaphones in play.




There's this one:

S&P daily


But also this one:

S&P 5 min

What piece of good news could drive the market to such heights (3018) by Thursday afternoon?

Sunday, June 2, 2019

Next big test at the 2650 level

The target on the confirmed head-and-shoulders on the S&P 500 is 2644. 




The halfway-back level for the rally since Christmas is 2650.  We could test this area this week, and the reaction from that test determines whether or not we finish the giant megaphone (McHugh's "Jaws of Death") pattern we have been in since the January 2018 highs.

The 2650 area is decision time, where we either find support, and make it to the promised land over 3K on the S&P, or we bomb down to 2250 or so into June FOMC, and monetary policy gets involved.

I'll take either outcome, and I don't mind the higher high, because that only gives us more to short when the final reckoning comes at last.  There is a fib extension target around 3025 SPX along the top of the megaphone in mid-July.  Before then we will have the June FOMC and a G-20 meeting in late June that could fluff the markets to get us there.

The restrained $VIX and weirdly buoyant $JNK and $HYG ETFs are telling us that we are just not yet in panic/crisis/liquidation mode. 

We are patient as always.



Broadening wedge top, where (E) touches the top

Friday, May 17, 2019

Will PBOC devalue the Yuan this Sunday night?

It sure looks that way.

Please do not disturb the Amazon.com wagie

USD/CNY weekly chart, nice cup-n-handle.  Kyle Bass may have exited his famous Yuan short just as it was about to pay off.  This is headed to 8, then 10, then to 100.  Gee, that's too bad.


USD/CNY weekly

This also explains the sudden surge in BitCoin and other cryptos for the last couple of weeks; insiders know this is coming and are fleeing the scene.

If the market tanks in 2019 -- say if we plummet to the lower support in the next 2 weeks -- then the Donald Trump will have absolutely no choice but to go full scorched earth on the Bolshevik Democrat party in 2020.  He must destroy the evil party and salt the earth.

Note how we kissed back the Christmas rally channel this week.  The big bounce into early July is to the .618, likely after the Fed gets on-board here.

SPX hourly

I've been saying this for a long time, the way we defeat China is by pulling the plug on their cancerous financial ponzi and letting the Chinese people finish off their rotten elites.  Maybe they can end up with a proper representative government instead of another Oriental despotism.

Sunday, May 12, 2019

Gotterdammerung

Futures off 30 tonight, and we could see something truly beautiful this week into May opex.


It has always been my personal thesis that when this thing finally goes, it will throw a rod and fall much faster than anyone thinks.  Shock and awe, bloody destruction, again and again.

We could be testing the Christmas lows as early as this Friday.

SPX nightmare

Market longs are simply in error.  And the S&P 500 is due for a good culling.

Good luck to all bears.

Sunday, May 5, 2019

THANK YOU, THANK YOU, PRESIDENT TRUMP!!

It will not take much at all to implode the ponzi Chinese shadow banking system, and every lie that rides upon it.

Thank you, my POTUS.  You have done well today.



Expecting a FFR cut in September -- not in June.  The lack of a June rate cut from the Fed will actually crash equities back to the 2007 highs (1560s SPX).

But the FOMC will come around in September when the very long-term channel is threatened, with the S&P 500 under 1370.


S&P 500 daily

GOOD LUCK TO ALL BEARS.

Thursday, April 18, 2019

One more time ... one more high ...

I guess I should be angry about this.

sofia leung tweet

But she's exactly right.  I agree completely.


We should thank Sofia Leung for being direct and honest with us about the matter.


Books and libraries are just so much whiteness.

$NDX made a new high this week, so we can expect the same for $SPX, etc.  Timing works well for a few weeks from now, in May.

SPX hourly

Support is down around the 2260 level before they do something at the June FOMC.  But they may just kill the balance-sheet normalization schedule, leaving rate cuts for when things get truly desperate.

SPX daily

Real price-discovery puts the S&P 500 back at 500; it would be nice if we could get it over with this year, so Trump can start working on his 2020 campaign.

SPX daily again

If the market implodes, though, Trump will have no choice but to dump everything he has got on the treasonous Democrats.  The 2020 election would then be the most epic event of our lives, after the market panic and meltdown.

We'll get MMT eventually -- it's the logical conclusion and exciting finale of the path we took in 1913.

Thursday, March 21, 2019

Desperately clawing at the old rally channel

Since we kicked off the Bear Market in Q4 2018, we have been desperately trying to regain the old rally channel up from the 2009 lows.



Run the trendline up from 666 through the 1810 low on a log10 daily chart.  Q4 2018 is "A" down on our count, and we are finishing up "B".

SPX daily, long-term rally channel

When "B" completes, we will lose the rally channel and sell off again, to support at the trendline from prior lows, roughly 2280 by May opex:

Support from prior lows

"C" is a massive 5-wave impulse, with each leg lower ending on a Fed meeting, with promises of free stuff given out each time.

SPX daily, 5-wave impulse lower

The Fed then cuts rates at the September FOMC when we are right at urgent support, the bottom of the long-term channel, 1387 on the S&P 500.

SPX weekly

This rate cut will stanch the bleeding, and -- maybe -- get us through the 2020 election, on the next cycle B-wave.  If we break down and out of the long-term channel, policy has failed and we are now in deflationary depression hell, complete with cascading debt-defaults and an S&P 500 of 500.

We've got through EOQ1 before the current B wave retrace equals "A" down from 2018 in time.  April would be a 20% decline in equities.

Monday, March 11, 2019

Die, Facebook, die!

So I guess Zero Hedge is fake news?  When the time comes, we will not mourn the death of Facebook.  Why do they deny their users access to objective financial news?



Bears should actually be encouraged by the rally today.  This looks like a five-wave move up from the Christmas lows.  Once we breach 2816, we'll keep heading up, seemingly on autopilot, on crappy low volume.

A couple of Hindenburg Omens this week and next would set up the next window perfectly.  By FOMC next week, the middle of the channel is right about at the 2872 area, where you would want to see a five -move impulse wrap up.

Did the Fed promise no hikes this year, none at all?  We are very close to inversion on the 13 week, 5 year, and 10 year bills.  Will watch the $IRX very closely over the next week.

SPX daily

The Fed can't cut until we reach the 1400 area on the S&P.

As soon as September?  That would allow for some excellent fall hiking in the Cascades.  Sign me up.

SPX daily to long-long term support

Until then, enjoy my dear uncle on the drums.  Happy Ides of March.

Sunday, March 3, 2019

Resistance @ 2872 late this week

Futures making new intermediate highs tonight, and we should keep going on whatever short-covering is left and whatever trade deal hype they can gin up for the next few days.


There's a New Moon this week (high), and one of McHugh's splendid phi mate turns coming up ... soon.  Dr. McHugh absolutely nailed several important chart turns in 2018 with his cycle dates.

Current wave-count, looking at a long-in-tooth 5 wave structure here.  Is it the first leg of a much larger wave way up above 3,000 on the S&P?  Is it a "failed 5th" wave that dies at 2872 (last January's VIX-splosion high) and gives us proper impulses down?  We know for sure later this year.

I don't see how we can reach any real agreement with the Chinese on the issues that count, save for complete capitulation on the level of treason by the administration.  They will never respect IP rights, and we cannot accept Huawei (née Nortel) anything on our soil.  A turn late this week would fit either a failed "deal" or a meaningless agreement, where the hype has already been priced-in, and the selling starts.

S&P 500 hourly, wave 3 on peak RSI

Deep-Throat IPO thinks we may see bulk-selling of US equities soon.  He has a larger thesis about deflation in China matched with a bad policy response here, resulting in rampant dollar inflation.  Whichever track we take, what is most important is that we zero out the bad debt, unsustainable obligations, and immoral promises (e.g. .gov pensions), so that we may one day have sound money.

If we can get a proper turn this week, and real impulses south, then this bear would like to see us test the long-term effective Fed policy channel on the S&P 500, around the 1400 level, late this year.


S&P 500 daily, megaphone, supports, down to 1400

IMO, it is this channel on the S&P that will determine the final outcome of this crisis -- whether we break out below the channel into a severe and cleansing deflationary depression, or whether the Fed can force-feed debt and credit into this clown-world system (MMT and teh helicopter moniez)  to send us to hyper-inflationary nirvana.

S&P weekly, with the Fed clown-world channel

Monday, February 18, 2019

Parabolic Path

Assuming Trump wilts like microwaved lettuce in the trade talks, and then a second time in the wall talks.




/ES hourly

Sunday, February 17, 2019

Jaws of Death count

McHugh has not mentioned it yet in his newsletter, but the S&P is shaping up to draw one of his "Jaws of Death" patterns, Bulkowski's broadening top.  The Q4 2018 market dive is hardly impulsive, so if it's a correction, and everyone is on board for one last moronic credit pump into the markets, some sort of weak trade compromise with China, and the rest, then, sure, why not some new index highs.  Never mind that the real economy is in free-fall, but the Fed will pump QE so we can get subprime automobile loans, and peer-to-peer microcredit, and another $trillion of student loans, and maybe even some sweet MBS, or derivatives thereof.

WW2 re-enactment courtesy of 4chan

If we stay in the current channel, we reach the upper bound of the megaphone at ~2990 SPX in the first week of March.  The Fed is disgusting and dovish, Trump's foolishly tied his fortune to the S&P 500, Xi's desperate now as the rot in their monstrous credit ponzi is plainly obvious.  Melt-up would make sense here, with the usual divergences, low volume, and a cluster of Hindenburg Omens to wrap it all up (again). 

If we fall out of the current channel, we waste some more time, then touch the top of the megaphone ... later ... when pumping new credit and debt is simply no longer possible.


SPX daily megaphone top

This could even overthrow the wedge, especially if we have some crazy destiny to reach the full 2.618 fib extension of the 2008 crash, up at 3048 on the S&P.  This is the last call for debt-ridden corporations to buy back their own stock with debt.  That window is closing soon enough, too.

The $NDX has a similar pattern, with a wedge targeting a great surge to the 8,000 level.  This would suggest one last party for the FAANGs.  

It's all so tiresome.

Wednesday, January 30, 2019

Just for fun

Five waves up from the 2346 low are actually c of 2.  The tape from 2940 to 2603 on the S&P was the closest thing to a five-wave impulse down that we have seen in all of this.



We would, of course, need "an event" to dive back to the 2007 (year) highs.

The lower line at 1332 is the long-term Fed policy channel, would expect them to shovel a fresh load of fake credit-money into the hoppers on that one (June FOMC), because they have no choice.

c of 2 up channel (5 waves)

Thursday, January 17, 2019

Bradley turn

A major Bradley turn, scheduled for today.  If this bounce is out of gas, and we are actually building a five-wave move off the October high, then look for the 5th wave to "extend", since the 3rd wave did not.  Is this some sort of diagonal?  the waves are sloppy triplets, and we have overlap of the 1st and 4th waves.  It's no textbook impulse.


We would hit support from the two earlier lows in the first week of March.  This drop would be particularly dispiriting, for its magnitude, but makes a nice buy into June FOMC.

What would force the hand of the Fed to hike one more time, and force a "Lehman moment" for this cycle?

SPX daily

edit:

What if we are now actually in a wave 2 of a much larger diagonal?

SPX daily diagonal to 1810

Sunday, January 6, 2019

A triangle would work well here

We have overshot the .382 retrace of the big drop from 2800 SPX, but this bounce has done the important work of kneecapping the $VIX. 

A bear would want to see it back off and resolve as a triangle into the FOMC at the end of the month.  We can still find our way back to 2520 in a sensible way, preferably with a $VIX of 18 or lower.




The break from the triangle would be violent, potentially even more steep than what we are counting as the third wave.  But it would mark a climax in the selling that would then reverse in a stronger and more sustained retrace.

At some point this year the real damage is done.

SPX daily