Sunday, June 23, 2013

Charts 06-23: Three Peaks and a Domed House (again)

The sharpness of the drop post-FOMC last week surprised me, but the hints have been there for a while now with the series of Hindenburgs.

I'm counting the move as wave 1 of C of 4, with an important condition.  We really can't have a wave 3 off of this that extends.  A minimal 1.618x of the 77 handles gives us a 125pt move; even with a retrace this would break us down through 1500 and possibly much lower.  From the other E-W analyses I have seen, 1500 is looked on as a line in the sand for the top being in.

The remaining waves in C of 4 would need to get bottled up within the current channel or one not too steeply skewed off of it.  Final target for C would be 1510 if it is 1.618x A, but 1530 would be great, too.

SPX 06-23
Assuming we don't break down through those supports, crash, etc, then we get the final rally to new highs.  How about 1751 into September FOMC?  This would touch the upper wall of the 2009 rally channel and actually give us a plausible A ~ C resolution (see notes on 5Y chart).

SPX 06-23 1Y - showing push to 1751 Sept FOMC

Which brings us back to Three Peaks and a Domed House.  If we have one rally left in us, why that would take us to point 23 on the model.  The "expanded" 2008 tape I have been playing with then does a pretty good job of modeling the price targets (dunno yet about time) on the way down.  It even includes a bounce at SPX 666 (3 of C), before reaching a final low at SPX 570 in early 2015.

SPX Three Peaks and a Domed House

Chris Martenson podcast interview tonight -- "Neil Howe: The Fourth Turning Has Arrived".  I'll listen to it on my walk to work in the morning.


Christian Gustafson said...

It's arguable that the 3PDH pattern begins at SPX 1010, back in 2010.

Permabear Doomster said...

I like chart'2.

A rally from low 1500s to either a double top @ 1687..or even mid 1700s - forming wave'5..would be fine with me.

I still concerned of underlying upside into 2015 though. THAT remains a very viable issue the doomer bears need to keep in mind.