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

31 comments:

Bryan Franco said...

Yes. Needs to do some "time"

Christian Gustafson said...

Oldie but goodie, the George Brett story.

rotrot said...

rotrot | November 12, 2018

During July 2016, I was introduced to an individual with expertise in technical analysis and stock market cycles. After reviewing his work, I discounted his 'forecast'...how could the stock market continue to rally for at least another year and a half? Well we know that it did! As a result, I reached out to the individual. We have since established a sound working relationship. I have been actively following the financial markets for more than two decades...there is no one better than this individual...an absolute master of time and price...the next few years could be interesting...thanks Christian...be well!
_____________________________________________________________________________________
rotrot | November 21, 2018

reference is made to my prior post on November 12, 2018 at 6:09 PM...on July 1, 2018 the referenced individual provided me with a chart that identified the single best time to short the S&P500 during the next several years...the chart also mapped out the BIG picture trends (down and up) expected during the next several years...sometime after the first of the year I will post the 'short the S&P500' date...in the meantime I will ignore the quibbling relative to the daily squiggles and wiggles...see ya!
_____________________________________________________________________________________

reference is made to my prior posts dated November 12 & 21, 2018...four months before the fact the individual forecast the secondary high (best shorting opportunity) would occur on or about November 12...the actual date was November 8, a whole two trading days off...the individual just provided me with an updated DJIA cycles forecast...the next few months (years) will be historic!

Kevin Wilde said...

Christian, such a triangle is exactly what I'm looking for, with the 20 day moving averages providing the upside resistance that keeps pushing ever lower till we break to new lows. My patterning has a deeper A wave sell-off to start the triangle, and the likely wave 5 break to new lows is likely to be pretty small in size. The exact low should land when the MACD turns negative again, matched with a reversal candle to next day or so. That's what I'm looking for. Next trade is 12.5% down, then long for the ride back up here.

rose2797 said...

Kevin so what spx low u are expecting. At this point r u expecting 2600 right now

Hugh Jazole said...

Only one way to go from here.

https://stockcharts.com/h-sc/ui?s=%24nymo


Kevin Wilde said...

The kind of low I'm expecting is SP 2280-2320, though it happens in like one bad day, so will land where it lands. Just keep an eye out for when the daily MACD turns negative. New lows at that point equals time to buy for a ride back up here. Then we will see if we're in a bear, or headed for a larger blow off. One trade at a time...

Christian Gustafson said...

Expanding bearish wedge to 2000 SPX on March FOMC.

Fed cuts rates, and we retrace the whole thing by June FOMC. The greatest long ever in the history of history.

Then the bottom falls out again.

Sal said...

ES came upto 2597 without any significant pullback from 2438.5. I was expecting a 3 waver like the (a) and (b) before in this chart below:

Click here for ES chart

Now I am not sure if there will be dip so close to the target ES2612 and start b of (c). Either way I think the bull bear line is at ES2612. If it tags it and turns around, that would mark the end of uptrend from 2317 on ES.

Playing sub waves has been more difficult than trying to predict overall direction. I was harping about 2318 since nov first week when it was at 2800+ but by the time it got there I was in and out couple times and it wasnt well timed.

Same thing on its way up.. made some good and some bad moves trying to time the waves to 2612. Case in point was the upturn at 2464 didnt materialize. Instead it went to 2438.5 before turning up.. Then tried to get b of (c)..

I think it makes sense to just sit out the smaller waves and give more time. One of these days I will get it right.

But for now, Soros maybe getting ready to strike with the forces of king solomon at ES2612.

Randall Beehomes said...

We go lower from here

Kevin Wilde said...

Look at the topping candle on the Dow Industrials yesterday. Compare that one to the one at the October peak, then the November peak, then the December peak. Dow about to suffer a 500 point drop to close hard below the 20 day moving average, on the way to new lows.

Christian Gustafson said...

If we are done here, next stop is the 2000 level on the S&P 500 -- 1st week of March.

Extended 5th wave, ladies, a real doozy.

Kevin Wilde said...

Christian, what makes you think we're in for an extended 5th wave of such magnitude, versus say what happened in 1998, 2000, 2007, 2011 5th wave move, which were one day events at new lows that immediately reversed?

Christian Gustafson said...

Let's see where we wind up today -- this looks so weak and sad.

W3 did not extend, so a fully-extended W5 imo would be W0 - W3, or 594 pts.

Skeptical said...

Just finished the best 10 day streak for stocks since the March 2009 low. Trump nailed the low on Christmas Day when he said it is a "great opportunity to buy." Obama said something similar on the day of the 2009 low. Who knew the Presidents were the best market timers in the world?

Kevin Wilde said...

Good timing on the Prez side. Or, maybe he's a chart reader, as his comments came right at the end of wave 3 as shown on Christian's chart when such a bounce would be expected to land. If Christian's chart is correct, the prez is about to get his head handed to him on his bottom call.

Kevin Wilde said...

Nenner sees wave 4 over on a close below SP 2570, with a cycle turn expected next week. No downside target as of yet, though Steve Grasso - who has also played this near perfectly - sees 2200 as the low for the next sell wave. Looks like it's about to get real interesting again...and should be very tradeable and profitable.

Unknown said...

Yes, the presidents have timed the lows perfectly. Of course, when you have the Federal Reserve at your disposal to skew the markets that tends to help. But hey,as long as the stock market hits new highs, it does not matter that no one can afford a home, or that 80% live paycheck to paycheck, or that zero savings is made by anybody,or that employment has majorly shifted to retail and service sector. But all that matters is the stock market is up, and get excited because it'll be going up more when they putthat printing press into higher gear.

Enjoy the demise and failure of America. Rome was much more prosperous and advanced for its time and they still failed. We'll have our turn.

Randall Beehomes said...

doom begins tomorrow

Hugh Jazole said...

Big flush incoming! The bottom just fell out of utilities.

https://www.investing.com/indices/dj-utility-average

Skeptical said...

So we have had around 12 straight days of dip buying. Seems like past periods of dip buying went on even longer. Will this time be different?

Christian Gustafson said...

You mean this endless sawtooth pattern of a lower open, followed by a low-volume melt-up?

Perhaps the Bradley turn this week breaks this logjam and gives us the (extended) 5th wave down to new lows.

Depriv said...

One of my friend asked me that why I'm so bear.
I said that I'm no bear at all: can't wait to get my longs (around 600 in SP).
I don't think he got it...

Joke aside, still not decied if up or down. Right now it is a bit more like about a new top.

Bicycle said...

the CBOE Fedwatch currently shows that there is basically zero probability of a rate hike this year. If they do not hike we will be somewhere at 3k to 3100 by year end. And we could go a lot higher before hitting the top of the big channel; 3400 or even 3500 is a possibility this year.

The bad earns and bad data already got priced in with the year end 18 dump. now we are pricing in no more rate hikes and end of the recession

after Q4 earnings are out we can go back to pricing in new rate hikes and the next set of bad datas

Then towards the middle/end of year we can go into pricing Trump Term 2 or Ocasio-Cortez Term 1

Prechter said...

Bicycle,

Ocasio-Cortez Term 1 cannot happen - not yet anyway!

She is only 29 years old - President has to be 35 years of age :)

lgp said...

Ian Bezek here...

I lost access to my Yahoo email account. Could you guys add me to the thread at irbezek33 at gmail.com ? Thanks!

Hugh Jazole said...

"If they do not hike we will be somewhere at 3k to 3100 by year end." Now you're getting it. Many have been saying they will cut, and that it would be the ultimate sell signal. Why would they cut? All they have to do here is hold tight, and the market will scream higher after the first quarter.

Trent said...

God this never ends, it just keeps going and going. I don't even recognize America anymore from ten years ago. Can't we just pull the plug on this already? Kudos to everyone making money on stocks, but if we're all in agreement that society is falling apart in the process what is the point? Sjw, shitty gig jobs, no jobs unless you have the right amount of degree and exp. 50,000 plus master degrees! Where does it end?

Hugh Jazole said...

"Sjw, shitty gig jobs, no jobs unless you have the right amount of degree and exp. 50,000 plus master degrees! Where does it end?" Don't forget about woke capitalism. Gillette, the best a toxic man can get! I've long viewed myself as separate from "society." There are many groups who retain their own culture within the greater one. It's best to try to focus on your own life, and find others who agree that the world has turned to shit.

Hugh Jazole said...

These egalitarians will fail as they always do. It's only a matter of time before the IRON LAW ruthlessly asserts itself, and puts their utopian dreams back to sleep. Just knowing this FACT allows me to laugh at their childish charade.

Kevin Wilde said...

I don't think its about rate hikes or cuts. It's about the balance sheet, and till that changes, the FED are tightening by removing 50 billion every month from their balance sheet. They can change that, though till they do, they haven't.

Nenner turn tomorrow for SP...top