Sunday, December 8, 2013

Charts 12-06: More 4, please

I'm not on board with Daneric's 1-2 count, but I would like to see more decline in the indexes this week, to 1746 on the SPX, for an A-B-C count.

This would complete the head and shoulders we have in play from the 1779 neckline, give us a C of 4 that is about 1.618x the length of A of 4, and retrace roughly .382 of what I am counting as "W3" on an ending digonal.

It would also be enough of a pullback to satisfy Bryan's historical wish for a pullback of 3% or better before the final (?) top, while giving us the expected Christmas / EOY bonus rally.

Counts below, good luck out there.  HighRev says we're getting into some dangerous waters lately.

SPX 12-06

Here's the larger ending-diagonal.  1746 this week would allow for a W5 similar to W1 to finish up 2013.

SPX 12-06 6M


Permabear Doomster said...


I know a fair few were short from Thursday, and they are understandably desperate for 2-4 days of weakness this coming week.

Might happen, but the bigger trend remains upward into year end...the sp'1830/50 zone looks a given.

If you look at my weekly'8 chart..I think you are miscounting the bigger waves - as just about everyone has since the late spring.

A bigger sub'4 in Jan/Feb..and then a 5' across March/May.

...then we drop 20%..or so.

Regardless, that surely won't be the 'grand' top that so many are looking for.

I have to say..I think next year will be another lousy year for the bears.

Not because we won't get a decent down wave..but because they will remain short, and get nailed on the next hyper-wave into 2015/16.

Have a good week

Christian Gustafson said...

Hey Doomie --

I've only got two quibbles with your ├╝ber-bullish chart:

1. I don't understand the ABC wave 1, unless you expect the others to ABC as well.

2. The corners of blue (2) and (4) should have an uninterrupted trendline connecting them. If any part of the wave (3) between then breaks this TL, then the count is suspect. This is a pretty important E-W rule in my world; I think it comes from Neeley.

Definitely on board for the 1850 into EOY, but I suspect it may be a terminal spike. Budget/debt issues will eat us up for January and early February, until they cut another stupid deal to give us a really sweet wave 2 of some degree.

Permabear Doomster said...

If you think 1850 end year...

and then a rally AFTER the debt ceiling/budget issue kicked ahead...

why would you not see another new high?

Regardless of however you want to count the waves though..the primary trend right now clearly ain't down, and makes any sense for anyone to call a top until the bigger monthly cycles level out.

Even in summer 2011 it took 10 weeks for the market to churn a top..and finally break in late July.

There sure shouldn't be a hurry for anyone to be shorting the indexes.

Christian Gustafson said...

I also added a link to the EUR/JPY cross to the home page, since that seems to be what's most in charge of equities lately.

Permabear Doomster said...

On a monthly chart, dollar looks weak..set for another 1.5/2.5% lower across the next 2-4 months.

As more recognise, 2014 could be about China/Japan...and that won't help the Yen.