Saturday, January 3, 2015

Looking for one last high in January

And then it may be time to hit the trenches.  For now, get your dugouts ready, dig them deep to resist heavy bombardment, and stock them well.  Listen for miners tunneling underneath your lines.

An Australian with a Vickers

Friday we retraced .382 of the rally up from 1972 SPX -- clear wave 4 territory.  But if this is a bearish terminal wedge pattern, we have already overlapped wave 1 (which is permitted) and could go a little deeper into next week.  There is plenty of room on the chart.  From this POV, the lower pink trendline is a real line in the sand, it must not be crossed.

SPX 01-02-2015

The good news this week was the top Bollinger Band peaking on the SPX and starting to come in.  A touch of it would set up the next cycle short, and possibly the return of the Bear as well.

Yes, of course the crude oil crash means deflationary hell -- reversion to reality -- is dead ahead of us.

19 comments:

Trading Sunset said...

re: Yes, of course the crude oil crash means deflationary hell

There are often moments in the past half year when it seems like most are now PR spokespeople for the Fed.

Yes.. YOU are touting lower prices are a BAD thing.

It is PURE federal reserve policy.

Serious question... you think higher rates are BAD too ? Ohh yeah... you do. lol
--

Twisted times...and it seems hardly anyone is left who has ANY memory of pre-2007.

I remember when 5% rates were 'fine'... along with $30 oil.
-

*see my alternative scenario for downside after the spring. It is something that might offer something 'fun' into late summer, but from there... we still go up.

Bryan Franco said...

PB - 5% rates and $30 oil took place under a completely different regime. In THIS regime, the fact that nearly every commodity is plunging demonstrates the FEDs inability to create the inflationary "reset" it so desperately seeks. Only a matter of time before Mr. Market accepts this.

benjoyce said...

I need BB analysis please. The daily lower BB looks flat and ready to curl DOWN. Having that lower BB go flat like that is unusual.

benjoyce said...

Also, I remember that if the market fails to hit the upper BB and then closes below the 20 day MA then the odds are high that it will hit the lower BB. IF that situation happens it appears that the lower BB will curl down and that is even more bearish. There is a reasonable data dump this week that could provide dump motivation.

christiangustafson said...

Middle BB -- 20 DMA -- for the SPX is up at 2049. There's your test for today, we would need to retake that to avoid the likelihood of dropping back to the lower band.

If not, Benjoyce is right that the lower BB is back down in the 1980 area. Would that invite some sort of topping head & shoulders?

There is a Full Moon today (1/5), if you care about astro stuff.

christiangustafson said...

Can the Fed control the Moon?

Game on, market challenge is to retake 2049 today.

T.Berry said...

similar start do '15 as '14 (down almost 1% day one). '14 lost 3.5% in jan but turned out pretty well. year ending in "5" plus 3rd yr pres cycle odds in favor of another up year. plus cheap oil as a bonus will lift consumers spending.

gl to all in '15

benjoyce said...

educated guess again:

So we fail to hit upper BB and now we close below 20 dma. This means we hit (the odds are that) the lower BB. But the lower BB is now starting to drop. This means we go even lower than the lower BB. To where? how far down. This whole week we could get bad news. So the market bottoms on Employment friday, just before earnings season comes out. I would guess we hit 1950 on friday (inverted H&S on the weekly) and then rally. Then rally again for the Jan 22 ECB decision. Then rally again for the fomc late jan.

benjoyce said...

another bearish drive is OIL. Let's not be naive and think that oil will stop at the monthly trend line at 46.62 or so. This line goes way back. I bet they slice thru it and the s&p starts to panic some.

benjoyce said...

Andrew's pitchfork support on the monthly chart at spx 1890 or so this week

benjoyce said...

I'm sorry I ment above to be 1900 not 1950. ok I'll shut up, enough from me

christiangustafson said...

If the 2017 low holds, we have a real possibility of an ABC off the high.

2093 -> 2048 "A" 45 handles
2048 -> 2062 "B" 14 handles, .31 retrace
2062 -> 2017 "C" 45 handles

A ~ C

benjoyce said...

Inverse H&S at 1900, also it's the lower BB weekly, Andrew's pitchfork support at 1890. I'm not saying this WILL happen but I'm watching it.

I'm wondering will data this week (including oil and Usd/jpy) be used to drive s&p down to above support and then use ECB & FOMC news (print print $)to drive up prices in sharp manner.

Don't you think by the time Greek elections come around, if they do, that they will be already factored in?

Earnings season starts a week from today? I'm told. and will be great earnings. A reason for a rally next week after a big drop this week

Just my thoughts, NOT investment advice. If I were successful, I would not be tending the wood stove here. 7 degrees F on thursday tomorrow

Bryan Franco said...

Pay attention to IYR the reit etf. It might be leading this whole ending wedge thingy. A sharp reversal down would suggest that it finished wave 5.

christiangustafson said...

Earnings! Opex! RSI divergence on the 5-min SPX! Full Moon!

If we still have one more high, it's into January opex and a long, long week-end.

benjoyce said...

I was nervous on the "rally" this am. Now lower BB is dropping and at the level now, of a double bottom. BUT double bottoms are a bit rare, so look like we go lower than the lower BB

benjoyce said...

At 10 am the services pmi came out and it looks like a weak #. The bull were embolden, it appears, to rally, thinking, "the Fed will delay tightening" But the rally fissled and the bulls began to shit their pants. A weak number is consistant with deflation?

benjoyce said...

I sold my puts at a small profit. Could a had a double yesterday. doesn't look like a big drop till friday empl figure.

rally today with fomc min?

benjoyce said...

Looks like I may have a abandon my slice thru the Lower BB. Fomc min today and empl figure looks like ok numbers and will not tank the s&p. Crude oil numbers at 10am

but we did slice thru that pink trendline. I'm starting to get bullish