In a previous post I had said that we were forming a top similar to the 2007 top due to the cycles. That appears to be the case from the following chart comparisons.
I had also said that April 15th was important +/- in my timing cycles. I thought it would mark a bottom and it did, but it wasn't the large decline just yet. It marked the bottom of a smaller decline at 1303. This is still within the topping process similar to the 2007 top. We should rally back up into the 1330's now.
I am anticipating a freefall to the calculated target at 1206 in May. I will update a timing estimate and explain further at a later date.
10min Chart
This is the 2007 top. Remember, we are trading from right to left.
Weekly
SC- you are using the 2 year period leading up to the 07 top to project a move that will take less than a month to play out? Not criticizing, just trying to understand. Basically, you think the move down to 1206 is going to take the same shape, but happen in 2-3 weeks rather than this move up to the 07 top that took 2 years.
ReplyDeleteSC, I enjoy and appreciate your work, but I would like to know what makes you think these sorts of patterns repeat reliably, particularly in reverse directions and on very different time scales. It may be that certain recent market movements resemble portions of prior patterns, but what gives you confidence that the remainder of those patterns will play out? I am not trying to criticize; I would genuinely like to understand your thinking on this. Thanks.
ReplyDeleteI'm going to show a post soon to put all the abstract pieces together in a way that is much easier to follow. I think some are misunderstanding what I am saying in this post.
ReplyDeleteThis isn't a fractal in which I am comparing similarity of the current and 2007 tops.
In fact, what I am saying is that we are "unwinding" the big picture cycle, and are at the 2007 top right now. So to determine how the mkt will act going forward, this is the place to be looking.
You have the basic idea, and you are correct, the shape is the important part. The 1206 SPX bottom should be the same shape as the 2002-2003 bottom (triple bottom). This chart with the 2007 top is just a zoom in from my big picture chart several posts ago. So actually it is more like 5 years from the bottom in 2002-2003 leading up to the 2007 top.
You have brought up a critically important point. The market always rises slowly, but falls much faster. The "Great Bear Mkt" will be much quicker than the "Great Bull Mkt". From the speed at which we are unwinding currently, I can actually calculate an estimate of when the entire Bear mkt will finally bottom out.
Perhaps this indicates that ultimately fear is a much stronger emotion (survival instinct) than greed.
Ok..lets see if the easter bunny brings some rotten eggs to the party this holiday shortened week. It's got a chance with the opening we're going to get this morning.
ReplyDeleteLet's see how things shape up. My last VIX chart a few posts back indicated a peak for VIX today.
ReplyDeletelooks like a good set up to go long the dollar here this morning
ReplyDeleteBlake,
ReplyDeleteDo you follow SLW?
There is a comparison that can be make between SLW and SLV. Usually they trade closely in sync. SLW has not followed SLV up recently so they are diverging. It could be a sign SLV is nearing the end of it's blowoff top. Just a thought.
Thanks
SC- yes, I have been watching that very closely. I am currently short silver futures. Thanks for pointing it out. I am just looking for 1-2 severe down days for silver though before another push higher
ReplyDeleteI shorted silver at $42.6. I hate being short silver, it is incredibly uncomfortable, but it looks like a good set up to me. I will probably revers my position to the long side around 40-41
ReplyDeleteOk that makes sense. It does seem stretched at the moment.
ReplyDeleteThe weakness of miners comparing to gold and silver futures is explained by the huge success of leveraged etfs. Funds don't nedd to leverage on stocks anymore.
ReplyDeleteThat won't last forever. A company can stay overvalued for a long time, but non underprices for long. When silver goes up, earning of the miners goes parabolic. I think it will be the miners to catch the silver, and not the opposite.
G.
http://www.ellipsetrading.com
We will soon find out. Today or tomorrow we should turn around, or I will be moving to the sidelines. I still favor a severe drop for a couple of days though. And this is the type of action I would expect to see before it takes place...there is nothing g that is poitning to an obvious sell off here, that is why it will turn into panic selling or a day or two. I am speaking of silver of course. I will close out my short around $40, probably this week.
ReplyDeleteI hope for a gold&silver correction. In fact what i expect is a cycle close (the one that last about a Month)that started on 15th March.
ReplyDeleteBut i'd rather go flat than short. I mean, i admire people who is so cold blooded to short the preciouses sector, but it's like admiring one who's going to run the Pamplona bull race, heading in the opposite direction of the bulls :)
G.
It is a trade like any other, defined risk with what i view as a favorable risk/ reward ratio. If you have a habit of holding losing trades ubtil they wipe you out, then itwould be a very dangerous trade. If you have a predetermined liss ahead of time, i do not see where the bravery is needed.
ReplyDeleteLooks like new top underway.
ReplyDeleteYes, looking great!
ReplyDeleteclearly wrong on my silver short, took the loss late last night. The dollar is a turd.
ReplyDeleteSC, are you still seeing this further bounce into the 1330's as part of a large top formation before a rapid decent to the low 1200's materializes? If so, would you not put on some shorts up here soon enough?
ReplyDeleteYes, according to plan. I doubt anything higher than 1340,and it could stop anywhere in the 1330's.
ReplyDeleteThere should be heavy resistance right where we are currently trading this morning. So a dip later today is possible. Housing data at 10ET could cool off things perhaps.
Couldn't resist and put some shorts on. Neither RUT nor financials Rifin are agreeing with this rally. Neither are anywhere close to the early April tops.
ReplyDeletehow do you feel about AAPL? Might be the catalyst for new highs, but by its action today, could be a sell the news type earnings. (already sold my calls at HOD today)
ReplyDeleteEveryone will have their sights set high for AAPL after yesterday's tech earnings. So it seems more likely to disappoint than not. It does seem a little sluggish at the moment.
ReplyDelete