Wednesday, June 26, 2019

Let's wrap up these megaphones into July 4th

Mnuchin has suggested that the USA and China are close to some sort of trade agreement, and maybe we are.  If they manage to save face here with something, it still won't save the next dozen Baoshang Banks that some down the pike.  The Chinese banking system is beyond insolvent.  But it will rally the markets to new highs.

We have this smaller, local megaphone.  It's in five waves, although the third is the shortest -- hardly an "impulse" wave.  It's one of those very bearish expanding ascending wedges my old friend Lunatic_fringe used to hunt.  Timing is good into the July 4th holiday.

S&P 500 hourly

And here's the big megaphone.  The S&P 500 really wants to tag that area right over 3020.

S&P 500 daily

And then it's just a matter of how quickly this implodes.

S&P 500 doom series

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