Thursday, May 14, 2020

Has C down begun?

For the next eleven weeks, equity markets will be in a dialogue with the monetary policy gods who now run our entire world, over the question of direct support, as in Japan.

Market crashes proceed in three waves -- ABC.  The question now is whether "A" and "B" are in, and we are beginning a destructive 5-wave impulse "C" to new lows.

Channel break?  A plausible "B" wave triplet complete?

S&P 500 hourly + channel break OMG

Let us propose this scenario:

  1. "C" down has begun, selling into EOM, support ~2075 from prior lows
  2. Bounce into June FOMC is on "hope" that the Fed will buy equities - 2460?
  3. Fed declines to buy equities
  4. A real market crash to ~1040 S&P after June FOMC, 3 of "C"
  5. Late June to July opex on EOQ2 fund rebalancing and new "hope"
  6. By late July CMBS, CLOs, RRE all imploding, market follows down
  7. Shocking new historic lows - 520 on the S&P 500?
  8. Fed announces direct purchases of $SPY, $QQQ at the EOM July meeting
  10. MMT and start of the final collapse of global credit monetary system

S&P 500 hourly "C" wave to 520

Good luck to all friendlies.