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.