I think we will see a sharp spike up to the gap at B 1317 early this week. In the following charts A=C. Both are 95 points, and therefore my estimate of the near term bottom C is $SPX 1222.
I have looked at this in great detail a number of different ways including numerous cycles (most of the analysis is not shown here), and all line up very well. So I have a high degree of confidence in this pathway. I am looking forward to seeing the before/after on this one.
Be prepared for a wild week!
2-Hour Chart
The following chart shows the symmetrical patterns in place. The bottom should resemble a triple bottom similar to the Nov 2010 bottom.
2-Hour Chart
Thanks for the charts
ReplyDeleteThank you Blake. Still early but this is going to set up a fantastic short opportunity soon in my view.
ReplyDeleteGold/silver charts on the way. Working on them...
Thanks! No worries, I have a good long position on silver right now that is doing very well for me... My view is that is will continue to rally for the next couple of weeks.
ReplyDeleteif you are going to try to map gold and silver, it may be easier to just map gold. Silver is such a thin market that it is tough to use cycles and technicals on.
ReplyDeleteThanks for the charts---this set up looks too good to be true-----if it goes down this way it seems like some serious "stuff" globally is going to hit the fan to cause that drop-----can you give a little insight in terms how this movement today is playing into your expecation ( I know that it looks dead on up to this point)
ReplyDeleteSo far so good. I am very pleased with this chart to this point.
ReplyDeleteGenerally I think SPX could see a small pullback soon. Maybe it can test 1304 tomorrow morning and pullback to 1289 or something similar. Then I think it can push up and test the 1317 area.
So far so good with your chart call?? If it doesnt get to 1317 I think the closest pivot is 1313-still see that big sell off from there?? Thanks! John
ReplyDeleteAlso-do you favor shorting the SPX-RUT? TY
ReplyDeleteSC----based on the way this market has handled a nuclear meltdown tsunamie and middle east war with incredible resiliency --- if this chart comes through I think its telling us that another major shoe is going to drop---either Japan goes completly off the tracks or Saudie Arabia goes into some tupe of major conflict internally or Iran comes into the mix----point being this type of drop in that time period is going to require a pretty gut wrenching exogenous event----------------------curious your thoughts on this when you look at the magnitude and short duration of the drop in your annalysis----
ReplyDeletethanks in advance
John,
ReplyDeleteYes, big selloff from around 1317. I often short financials but the % downside should be better on this move in SPX. I am only looking for $rifin 834 on this move, while SPX 1222. Not sure about RUT - will look closer at the downside for small caps.
Long VIX also looks attractive.
mbt,
ReplyDeleteYes, there will be a shock event out of leftfield I'm sure. It is difficult to know what that news would be since there are currently so many potential problems out there.
This is why I focus on the cycles. Since March 2009 there has been a ton of "bad" news. Yet the market has risen sharply.
Maybe while eyes are on Japan, does the focus comes back to Europe? Just a guess. I hope it is not these reactors.
SC---
ReplyDeleteI think your dead on and I expect an event to really shake things up---I keep wondering about Saudie Arabia and Iran---side note I received a text today from my greatest reliable contrarain indicator of all time---he has been a perma bear and each time he is the most convinced its going to collapse its usually a great sign to buy---the text I received from him today was that he was throwing in the towel becuese nothing would bring this market down----I have a feeling this is the cruel directive of this market to completely screw with the most bears and the most bulls----with a lot bears throwing in the towel this may create the perfect air pocket for this market coupled with the bulls assured that the pull back is complete
Lol, mbt, keep us up to date on your contrarian indicator will you! It is a trader's market and yes, I agree completely, deception seems to be the name of the game.
ReplyDeleteBulls are about to believe in the "breakout". Bears will pile in at the bottom not wanting to miss the boat. Then the short squeeze up to SPX 1352 will start. Finally, we will see the real bear market....
It look as though-to the dismay of many-that Atilla at Xtrends won't be posting there anymore=there's lots of bright people there-why don't you put a link whereas your blog is free here it's not like you're promoting ect.
ReplyDeleteThanks John! Looks like the small pullback I was looking for is done, and we grind back up now. I still like the 1317 area.
ReplyDeleteI think 1303,if that, but you might be right re 1317.Im long EDZ Oct calls and TZA Jan calls.Time will tell!
ReplyDeleteYes, 1304 area is important for many reasons, and a major target.
ReplyDeleteVIX dropping hard this morning, also pointing to more rally here.
SC---trying to figure out the time sequence on your 1315-1317 area---It seemed like you were expecting that test this week by the chart but I may be way off on that----can you give a quick update the time range you were looking at for this potential move------
ReplyDeleteThanks in advance
It has been slower than I thought this week. The last 2 days were quiet consolidation. Always tricky for timing but it seems this Fri/Monday looks about right.
ReplyDeleteI like this blog.
ReplyDeletedefinitely looks like your chart can play out. 1300 seems to be a real struggle. maybe one last push to secure bull-believers, and then sell off.
ReplyDeleteMy only concern is that there seems to be too many bears calling for a final drop before heading north. meaning it may not come? (I hope it does though)
I agree "obvious" is always a red flag. The market sometimes has to make an obvious move. What I find is that if the market is going to make an obvious move then there is usually a mechanism that throws off many traders just before the reversal. This is often a trendline or fibonacci breach that most traders are watching and stop cleanout.
ReplyDeleteSometimes it is just the way the market moves that makes traders hesitate for too long and quickly becomes difficult to chase.
In this case, I have some reason to think we might see choppy trading that appears weak, and then a quick, powerful spike up and collapse. There will be some tricky spots, gaps overnight etc... Let's see how it plays out.
SC-wouldnt you call 45 S@P points in five days a powerful spike??
ReplyDeleteLol, it's been strong all right, especially the 3rd gap up in a row Monday morning!
ReplyDeleteSC-Im curious-did you-if you were short-cover before this rally re from Mar17th ect?? Thanks and thanks for all these charts ect.
ReplyDeleteI turned bullish a little early, and did miss the initial downdraft immediately after the Nikkei crash, but then shorted the next day at 1287.
ReplyDeleteYes, I was short, covered in the 1250's and went long there as well. Exited long positions early this week, and went long yesterday morning again. Will be shorting again soon very heavily.
This market is great fun to trade - plenty of action for both bulls/bears.
Please post when you short again.TY
ReplyDeleteI did short some here SPX 1307. I still think it can test 1317, but I can see a pullback here to maybe 1294.
ReplyDeleteFinancials $rifin a little weaker contrasting SPX. Also VIX perking up from todays lows.
SC-may I ask your thoughts on RUT I'm short via TZA calls-thank you!
ReplyDeleteShort RUT should do well. I will fine tune some charts and targets for RUT.
ReplyDeleteSC--
ReplyDeleteIm out of 70% of my calls today---looking to exit the rest tomorrow----probably going to be forced to buy puts to carry over the wknd which I hate doing----market rising on puffs and puffs of pomo smoke here----good size pomo tomorrow and monday
wanted to get your feedback based on the close if your looking for that 1317 tomorrow----the best "f" U job would be a Friday move up and then something to happen over the wknd. for a gap down on Monday
SC---
ReplyDeleteDid you see this article at the close:
http://www.zerohedge.com/article/someone-leak-something
So the bullish spin is they know something ---the other take away is these guys have shown their card to the primary dealers----last week the primary dealers had unbelievable monetary incentive to kill all the put buyers thus the continual gap ups-----
We will see next week if this buyer knew something or whether they now just painted a large target on their ass--
SC-I agree with your 1352 call but could it go there right from here and then head down-rather than seeing 1222 first?? Thank you.
ReplyDeleteWe're in the very final finishing thrust of this rally in my view. Timewise my micro cycle looks to be complete ideally as of tomorrow morning, and that means this rally should be finished almost right away.
ReplyDeleteIt is quite possible we see a reversal tomorrow, or if it is able to hold up and hover into the close, then Monday would look ripe for the selloff.
I'm sure we are going to drop off here first and there is plenty of evidence to support that. Financials $rifin topped on Monday, and leading down. VIX looks like it has bottomed on my charts. Many of my charts are looking unusually extreme. I'll show charts on the weekend.
The intensity really started to pick up towards the end today. The bears are in the pressure cooker. What better time is there to put shorts in place?! Upside to my target 1317 from today's high is 5.5 points and downside is 90 points.
Something to keep an eye on this weekend is the German elections:
ReplyDeletehttp://news.xin.msn.com/en/business/article.aspx?cp-documentid=4735315
Merkel's future seems cloudy. She has been a big bailout supporter.
thanks again SC
ReplyDelete1315 SPX now, I'm heavily short. Also long VIX.
ReplyDeleteBingo 1318!!!
ReplyDeleteit will be amazing if we turn down here.
ReplyDeleteamazing is right.
ReplyDeleteSC-any chance you could tell me what the Mega Bucks Lotto number will be next week also??
ReplyDeleteLol
ReplyDeleteSC-first of all thanks for all the work you've posted. My question is do you think-that once it hits 1352 ect that will end this bull market? I was curious if you've thought about long term ect. Thanks again and have a great weekend.
ReplyDeleteYes, that move to 1352 should be the start of a multi-year ugly bear market. I think the long term bottom is unbelievably far down. Let's just say if there still is a functioning market once the current monstrosity unwinds, that will be a positive.
ReplyDeleteOf course this whole process will take time, and there will be surprisingly long and sharp rallies along the way.
Have yourself a great weekend as well!
SC---
ReplyDeleteThe strength of this market has been awe inspiring--I took the remainng 30% of my calls off today but held off on buying puts---there is another large pomo on Monday and mutual fund monday awaits coupled with the wild card of the market having every incentive to keep this thing up into the end of the quarter
I really like your chart and your annalysis but there is going to need to be a big trigger event over the wknd. to break this pig
SC-will you update this weekend or wait untill you see what gives Monday? Thanks.
ReplyDeleteAny one know a quick way to "reverse" black and white on this site? Using IE 9 in Windows 7 -- and the white text on black background "killing" these old eyes.
ReplyDeleteThere will be new charts coming tomorrow. I am satisfied with this medium term chart and target SPX 1222 as is (no changes).
ReplyDeleteI am expecting a hard drop this week. Tues looks more probable than Monday for the selloff to start. It is possible that Monday retests the Friday high 1319, and that would be fine.
Thank you.
ReplyDeleteSC-I NEVER take this guys advise seriously but Im amazed at the charts he posts,and the time he must put into them, that no one but he can understand. Anyway-its Humble Students site and he just posted-for what it's worth- "extreame bearish on all indices" ect.
ReplyDeleteHello SC,
ReplyDeleteYou expect A = C (95 pts) but any chance we might see A = 1.618*C? This market is so stretched, I think it is doable for SPX to briefly beak 200DMA, currently at 1190. Thanks a lot!
There is good evidence for a bottom in the 1220's, but the key is that I am looking for a triple bottom. That should mark the bottom in any case. We can review once in the 1220's and see how things are shaping up.
ReplyDelete