Friday, August 31, 2012

Charts 8-31 a.m: Channel wars

We gapped out of the channel I had for wave 4, and are now dipping back inside.

Who will win ... and will we bottom into the close today?  The chart shows the current fight.

Savage knife-fighting in the pits



6 comments:

RP said...

Christian, do you think this wave 4 is a triangle with d up and e down still yet to come, followed by wave 5 up.

christiangustafson said...

Absolutely, Rajeev, as long as we don't head too much higher today.

On the 30-min chart, it sure looks like we have waves ABCD of a 4th-wave triangle in place, with one last drop for E, maybe to the 1400 area.

The re-pop this morning broke the little down channel I had going. A triangle here also relieves us of the anxiety of having W1/W4 overlap.

RP said...

With Monday holiday in US, maybe means drift down into next week with ECB on Thursday (6-Sep), which was always the key date, but suggests Draghi will have to pull out the rabbit out of the hat.
Jackson hole was just a prelude for FOMC on 13-Sep.
Just thinking from a timing perspective.

christiangustafson said...

Ah, meeting runs 12-13, with the formal statement on the 2nd day? Works for me.

Yes, we could eat another day or two here, before we get giddy about the ECB news on 9/6.

Was thinking about the "Slow-collapse" model on the bus to work this morning. It would actually put the 3 of C crash -- a failure to retake the 1200 level on the SPX -- squarely in the Fall of 2013.

I'll put some time into this over the weekend.

RP said...

Think QE expectations by the Fed has been largely priced in. Hence very muted reaction today. The pop was in the morning well before the open led by ECB banking license news. So the last wave 5 rally might be led by some news from Europe (ECB), as timing wise FOMC is the week after.

Look forward to "slow collapse" model over the weekend

christiangustafson said...

SPX 1406 at 3 pm EDT. I just want to note that 1396 would be an awesome close.

If we get it, I'll explain later.