Saturday, August 23, 2014

Market charts with the 3PDH and vacation photos

Today I saw an osprey on an early morning walk along the shore of Puget Sound.  As I walked the beach north of Golden Gardens during an ebb tide, I saw a large bird approaching, too large to be a gull.  Bald eagles are a common sight in the north end of town, so I assumed it was one.  Just as the bird drew up even with me, it pulled up, stalled, and dove into the Sound, right in front of me, maybe 40 feet off the beach.  It fell like a stone, revealing itself as an osprey.

We're approaching another "candidate top" here, near the top of a long-term trendline of serious overhead resistance and plausibly-complete wave counts.  The SPX is close to its daily and weekly top Bollingers, while the VIX and volatility ETFs are close to their bottoms.  A decent short-term Elliott structure and pre-holiday break week are an excellent setup for a final run up into the 2020 (!) area on the S&P 500.

As expected, I'm bearish and looking for the right entry here.

Black bear, Bogachiel Trail, Olympic National Park

First, the market needs to move sideways for a few days, pretty much like Friday, biding time with enough space on the chart for an unbroken W2-W4 trendline.  Then we have the second release of Q2 USA GDP late this week into a couple of low-volume pre-holiday sessions.

SPX 08-22 20D

SPX 2020 late this week is long-term overhead resistance and an excellent opportunity for a change in trend.  Note that the timing here lines up for September FOMC to be some kind of bottom.  We sell-off ahead of expected austerity and bounce on the actual announcement mid-month.  From here we start to chop south through the levels of the long-term Domed House.

SPX 08-22 1Y

Here is the larger "Three Peaks and a Domed House" structure and count, with its final target of SPX 1074.  I'm willing to be more realistic now and push this low off until mid-March, 2015, followed by a B-wave bounce.  Still, the descent will be relentless and truly vicious.

SPX 08-22 4Y 3PDH

This model makes sense if you think about it.  By removing QE stimulus, we return to our starting point, the September 2011 lows.  Please note that this will be wave "A" of a larger deflationary depression epic crash.  K-winter, ladies!

VIX and volatilities have room to drop as well; UVXY at $20 or better would be great.

VIX 08-22 9M
UVXY 08-22

Last week I took the girls out to Olympic National Park for a two-part adventure: 3 days on the coast on the Ozette Loop trail, and 3 days in the mountains at Deer Lake above the Sol Duc drainage.  The girls are developing a really solid sense of trail etiquette and now carry their sleeping bags and clothes in their packs.

So first we headed for the beach.

Olympic beach south of Sand Point
Sea star in a tidepool
More tidepools off Sand Point
Hundreds of Velella jellyfish washed ashore
An offshore haven for sea lions

We completed the circuit and spent a night at a motel in nearby Sappho on highway 101.  The town of Forks, WA, is looking really bad again, following the faddish boomlet of tourist visitors from the "Twilight" books and movies.  Now many of the Goth-y tourist shops that had opened up are closed and empty.  Buildings on the main drag are visibly falling apart.  The coastal towns are hurting.

We headed over to Sol Duc and up the Canyon Creek trail, and managed to get the best tent site at Deer Lake.  Here we watch deer frolic outside the tent.

Deer at Deer Lake
Sol Duc Falls

After arriving at the lake, I made camp and parked the girls in the tent for an hour while I scouted the upper basin for bears -- I saw two.  The next day all of us returned to see if we could find them.  We failed to see the bears again, but the girls gorged on alpine blueberries and huckleberries.  We had ten different kinds of berries on this trip.

Picking alpine blueberries
Searching for bears in the "Potholes" basin
Claudia's salamander


Anonymous said...

Toba Time and Orlov Take a Beating Here:

Apparently RE and his patriarchal pal Orlov drag out the Toba horseshit yet again (I didn’t actually listen to this crap). Toba is the first refuge of dumbass deniers. As indicated by the BBC’s headline more than a year ago, “Toba super-volcano catastrophe idea ‘dismissed.’”

Excerpts follow. Of course, they’ll continue to be ignored by RE and his anti-science ilk.

In the past, it has been proposed that the so-called Toba event plunged the world into a volcanic winter, killing animal and plant life and squeezing our species to a few thousand individuals.

An Oxford University-led team examined ancient sediments in Lake Malawi for traces of this climate catastrophe.

It could find none.

“The eruption would certainly have triggered some short-term effects over perhaps a few seasons but it does not appear to have switched the climate into a new mode,” said Dr Christine Lane from Oxford’s School of Archaeology.

“This puts a nail in the coffin of the disaster-catastrophe theory in my view; it’s just too simplistic,” she told BBC News.

The results of her team’s investigation are published in the Proceedings of the National Academy of Sciences (PNAS).

NTHE Question #10

Nice vacation Photos.

Christian Gustafson said...

Toba's an interesting theory, but is it a heated issue?

Does it lean more on geological or genetic evidence?

Personally, I always just liked it as a metaphor for the uber doom.

T.Berry said...

hate to go out on limb but think 50/50 chance one more plunge to 1950 before snp hits 2100 this year. sub 1900 ain't happening. though snp could just rally through year end from here. still no reason to sell. no reason to fight fed, they won't lose. 2350 snp's next year maybe higher.

T.Berry said...

btw, 2k's a nuthin-burger, it's going much higher.

Bicycle said...

Value of Manufacturer’s Shipments for Durable Goods Industries, Bearish Megaphone

Bicycle said...

Value of Manufacturer’s Shipments for Information Technology Industries, Bearish Descending Triangle

Bicycle said...

Last chart from the night, but it will be controversial one.

Illinois is not far from emerging from our 15-20 year employment depression, and will rise like the Phoenix...

...or maybe it means that things are about to get so bad that you all are going to have to migrate back to the mid west to pick corn by hand just to have a job...

All Employees: Total Private in Illinois, Bullish Descending Broadening Wedge.

Christian Gustafson said...

Bicycle, as a kid, I worked in a McDonald's in Beloit, WI. Had a great time working there with our crew, did everything there but change the fryer oil (no, thank you).

So I've got that going for me, which is nice.

Christian Gustafson said...

We have some source of stress in the market later this week as Russ Winter points out, there are a lot of Treasurys to move, and no QE on the table for it.

That and the GDP release in the general context of a pre-holiday low-volume creep up.

Bicycle said...

All Employees: Total Nonfarm in the District of Columbia, Bearish Ascending Broadening Wedge.

Bicycle said...

Forget the SPX and SHORT THE DOW

Dow Jones Industrial Average, Bearish Rising Wedge

Christian Gustafson said...


Bicycle said...

it's been years since i've been to a Domed House but I do love the Wisconsin.

Bicycle said...

Here we can see the population for 20-24 year olds has a similar bearish formation, but it's about 5 years behind the ones for 16-19 year olds:

Civilian Noninstitutional Population - 20 to 24 years old, Bearish Rising Wedge

Unless that breaks earlier than the chart for 16-19 year olds, that would indicate a phenomenon that would only affect the young.

This caused me to pull up a chart of historical birthrate trends in the United States:

Crude Birth Rate in U.S., 1800-2010, Bearish Descending Triangle.

OMG, what on earth is going to happen for the birthrate to fall towards zero in this country? Has the Monsanto screwed up our food that badly?

T.Berry said...

crazy to short a bull market let alone a multi-year secular bull. good luck shorting guys, downside possible 2-3% but upside 20+ over next year. dow jones sees 20k in 2015. much safer being long imo.

Bicycle said...

This morning on the tumblr, we discuss impending Chinese collapse, and also the Dolph Lundgren:

Christian Gustafson said...

Bicycle --

Your chart-blogging is proceeding at a feverish clip these days.

You are clearly finding your voice, your unique snowflake-ness.

We in the Deflation Land (well, just me, really) salute you.

Phat Repat said...

Nope, though I lurk more than comment I too appreciate bicycle's chartographic depiction of what could be. Very intriguing.

Bicycle said...

This one's a story of the past, have a look at this crazy chart that tells the story of the Chicago steelmaking industry!

Wholesale Price of Steel Scrap, Heavy Melting for Chicago, IL, Late 1800s to 1960, Series of Pennants, Wedges, and Triangles, Terminating in Bearish Ascending Broadening Wedge.

Oh, yeah, also have a look at the CBOE VIX for AAPL...