Wednesday, October 23, 2013

Charts 10-23: 3PDH update

The tape may not pullback much beyond 1740, giving us a week of tedious, low-volume crawl back up to our projected top at 1768 on 10/31.

The thought now is that there are so many TOMO operations and reverse repos in the past six weeks or so, that the wider market may be starved of quality collateral (Treasuries).  Another option would be to reduce the POMO of Treasuries going forward.

Here's an update on the Three Peaks and a Domed House count.  So where does it start?  666 or 1010?  and where does it take us?

SPX 10-23 3PDH
The SPX 568 target for EOM March, 2015 is the trendline between the 2002 and 2009 lows.


Permabear Doomster said...

..and what if we're in the sp'1800s in early November?

THERE MUST be a line at which you throw in the towel.

I am just getting..'politely concerned' that you're turning into a new Daneric.

You keep calling a top, and the market just keeps going higher, not that almost everyone out there - including the mainstream, aren't doing the same.

What is your level at which point you concede?

I don't ask it lightly, since I understand the mindset you're in. Hell, I'm afraid I might even fall back into that overly 'hopeful bearish' outlook.

Christian Gustafson said...

Actually, my position most of this year has been that the top is not yet in, and that I'm waiting for us to get there, looking for the set-up.

I might have bit at the May top, simply because it was a dramatic reversal candle like 2007. But the tape that followed lacked any real impulse, so I returned to my stance -- not yet, no top yet.

Meanwhile, Daneric calls a new top every week, posting the most hackneyed and embarrassing counts to argue his point. He's his own parody. I only discuss the conditions I am looking for for a top. The most important and pressing of these at the moment is that big pink channel on the chart. What will happen when we touch the other side?

The entire rally since 1074 may have been laboring to get us to this point, to cross the channel and complete the larger move, ABC.

Three Peaks and a Domed House fits in here somewhere, as well as some sort of patterned analogy to the 2008 tape (ABC decline). But first I want to see what happens next Thursday. Releasing a POMO calendar during RTH, with a plausibly-complete wave count, and in a turn window, well, that's a recipe for a very powerful reversal.

Christian Gustafson said...

BTW, not going to post a chart for this, but I'm looking for a Durables surprise in the morning and a close lower, at 1735 SPX.

This would complete a 21% correction from the 1759 high, and set us up for a rally into next week to 1768.

Permabear Doomster said...

Well, its 9.25am..sp is set to open 1756/57...

Either an opening reversal..or we close the week on a high.

re: a top.

surely though, how can you not have a level at which you concede? I don't get that.

I mean, you are going to cling to a doomster sp'500 outlook, even if sp'2000, or 4000 in 2015/16 ?

ps. I wish you'd get disqus installed, would make replying a lot easier.

Permabear Doomster said...

Two trading days to go..and sp'1764.99..a mere 4pts from your target.


I could certainly see a retracement/reversal from the sp'1770/80s, but I sure don't see anything lower than the 1730s...which will again make a mockery of the bears.

Whilst the big weekly/monthly charts push upward, seems pointless to short anything.

Anyway..hope you are okay...just hope you are still around when this nonsense finally does put in a multi-year peak.

Jeff Schrader said...

Well we touched 1768 this morning. Looks like we'll revisit again today.

Christian Gustafson said...

Yes, we're still up here in the ether. We have got a New Moon and a major Bradley turn this weekend. The last two Bradleys have been hits.

This week, we have a horribly tedious tape, plus two opportunities for policy shifts from the Fed -- FOMC and the November POMO schedule release on Friday.

Fed TOMO actions continue. Do they really need/want so many Treasuries?

Christian Gustafson said...

Did I say Friday? November POMO schedule release is Thursday at 3:00 pm eastern time ... during RTH ... spooky ...