Not only is this rally taking on an ominous tone, but the warning signs are mounting. Dare I say it...the "C" word....
2hour Chart
Small Caps - RUT and Financials - Rifin have been weakening over August and September relative to SPX. In fact, on the last dip these indices tested the level equivalent to 960 SPX. The gap has been widening, and this is a warning to take very seriously.
60min Chart
I guess the red fork line is at 1235 resistance, however you'll notice on the way down in August, the S&P went right through the red fork line. With earnings this coming week, particularly Monday and Tuesday, and the Euro summit next week, perhaps the S&P breaks the fork line and next stop would be 1175 before it drops hard???
ReplyDeleteother thing is the 1257 neckline of the previous head and shoulders is important if the S&P is heading for 1275, if that fails, then the drop will start there IMO.
ReplyDeleteWhat's the C word?
ReplyDeleteI think it starts with "C" and ends with "rash".
ReplyDeleteThe upper red fork line is a common resistance where reversals can occur. I will be watching that line on Monday.
ReplyDeleteI'm not talking about P3 or anything overly large. Let's see, but it is clear there is a lot of emotion in the mkt.
SC, I am a pitchfork newbie so forgive the question. How come you anchored the pitchfork at the secondary 1340 high on July 5, instead of the higher high at 1356 on July 7? If you look at it that way, we are still somewhat short of the fork line. Thanks.
ReplyDeleteGood question. I've often found in similar circumstances that the price stops at the line as configured above (using the lower level). Traders expect it to move higher, but it falls short and reverses a little lower instead. Just a little trick that often is useful.
ReplyDeleteOn Monday that red fork line will be approx 1228 SPX.
1228 is the 61.8% fib of the entire 2007-2009 decline. I also have another trendline passing through the same spot that supported the whole 2009-2011 rally: http://screencast.com/t/MLJCmI11
ReplyDeleteLots of resistance at that point!
Interesting, thanks.
ReplyDeleteMy 1998 cycle suggests this melt up is likely to continue. I'm hoping we come down so I can buy more. If they wanted a crash we should have done it when the SPX dipped below my Aug 9th cycle low. However, RLX never went below that area and has since broken above it's resistance line.
ReplyDeletehttp://tinyurl.com/3gp53q9
http://tinyurl.com/3ebbptq
Next week is October option expiration and has had a modest upside bias. Since the inception of S&P 500 futures, the index has been positive next week 19 out of 29 years.
SC's analysis will turn out correct due to following reasons:
ReplyDelete1. Two week rally as of Oct 14 is on steady declining volume.
2. Oct 11 was Narrow Range 7 period, Oct 20 was 3 day Narrow range over 20 period. Both are contraction flags sitting on top of range.
3. Weekly chart has big bear flag flying in all indices.
4. S&P once closed in bear territory has 9 out of 10 chances of slipping back in bear zone.
5. Look at Gold chart, it never bounce back rally and ready to collapse.
Diamonds, the question is WHEN and WHY?
ReplyDeletePotential all star results from APPLE, and other companies.....Euro summit.....seems to me the rally will continue the rest of the week.
I think shorting NG this week is a better idea!
Futures strong.
ReplyDeleteckorey
ReplyDeleteFutures weak.
Fasten your seat belt SC
ReplyDeleteUnless the NDX breaks, there is no downside.
ReplyDeleteEMINI 240 MIN...........
ReplyDeleteNo mystery......
http://img684.imageshack.us/img684/7609/clipboard02mo.gif
आप कैसे हैं Good read and most simple way to explain how market can behave...
ReplyDeleteHttp://etfdailynews.com/2011/10/16/why-the-fate-of-the-markets-and-gold-is-now-in-the-hands-of-ben-bernanke-gld-slv-sds-tza-sso/
here are some dates im getting for NDX:
ReplyDeleteWeeks of:
8/12/2011 - was low
10/7/2011 - was low
11/18/2011 - ?
12/2/2011 - ? <-- this date is symmetrical to the may '10 crash.
I am getting these from the money flow wave symmetry. Chart later perhaps.
gaberocks11,
ReplyDeleteThanks for your update. Much appreciated. Do you see this wave bottom to be around 28 Oct 11? Any other intermediate dates that you have in your analysis now?
Timer........
ReplyDeleteAs my posts have shown I have been stalking the short side and caught it last night along with others that I update! My focus is on the end of the month and yes there are always additiobal smaller cycle dates along the way (as Gann talked Wheel within the Wheel) but for the purposes here it's better just to look at the cycle end result...........obviously there are many points of tech confluence that come into a trade that I do not show..........Good trading! joed
TBONDS DEC 240 DEC
ReplyDeletehttp://img683.imageshack.us/img683/899/clipboard02k.gif
SPX may be tracing out this pattern:
ReplyDeletehttp://thepatternsite.com/3peaksdome.html
Notice the H&S top similar to SPX earlier this year. Point 27 would be the current position with a drop to point 28 next.
Point 10 would be the July 1, 2010, SPX 1010 low. According to the pattern, price bottoms near point 10....
Excellent site SC...good information and links
ReplyDeletethanks
Gabe does bonds and general market trade opposite? does that mean that stockmarket is going up?
ReplyDeleteThanks
Another great call SC !!
ReplyDeleteIs it possible that AAPL disappoints?
ReplyDeleteI think AAPL's priced in in my opinion. Don't think we see a "surprise."
ReplyDeleteAAPL - i find it very symbolic that Steve Jobs dies near all time high. Could be a significant top, time will tell.
ReplyDeletebluemoon,
ReplyDeletepeople forget that before the IPHONE and all the other Jobs' innovations (pre 2004-2005) AAPL stock was a real dog for 20 years. Without JOb's, I agree that expectations for that company are just too high
having said all of the above on AAPL, momos rule the day and for now this stock has/is showing no signs of any top.
ReplyDeletePK, thats going to be a surprise for sure. It starting to look like gold chart, with volatility increasing, time will tell. My long term TSI is showing negative divergence which should be resolved fairly soon.
ReplyDeleteSC, any thoughts on when the SPX bottoms? You still charting the 24th?
ReplyDeleteNice call SC, the first peak of the double top came within an hour of your prediction. I am still curious to know if you are looking at an Oct 21-24 bottom. Thanks.
ReplyDeleteThat is the plan. From my longer term cycle work there is also a profile (shape) of decline that I have in mind as well as a specific bottoming pattern.
ReplyDeleteI have some very interesting charts coming...
SC,
ReplyDeleteWasn't the plan for gold to be spiking higher as stocks sold off?
SC, have you seen this 15.5 month cycle? it projects possible low around oct 27.
ReplyDeletehttp://goldtent.org/wp-content/uploads/2011/10/013.png
Initially I thought Gold and Silver should dip with SPX starting to fall off, and then spike as SPX approaches bottom.
ReplyDeletethank you SC
ReplyDeleteThanks bluemoon that is in the ballpark as well.
ReplyDeleteSC
ReplyDeleteAre you expecting strong decline today ?
From your timing cycle, you said above that you've an idea of the shape of decline.
Thank you.
any waterfalls involved, maybe later :)
SPX bounced at the yellow midfork 1193. It should accelerate once that breaks. Banks are holding better today so just waiting for them to weaken.
ReplyDeleteSC, for gold to make a higher high from here, to go parabolic again (~$300 up) in one week, markets need a MAJOR event..
ReplyDelete"SPX bounced at the yellow midfork 1193. It should accelerate once that breaks. ......... "
ReplyDeleteaccelerate down, thanks.
Any lower targets for this short-term move ?
Not much follow through today. This is not what i would expect from a market that is supposed to be 200 points lower in 3-4 trading days. Needs to average 60 points down per day...Chart still looks bullish to me unless we can break below 1165 in the futures.
ReplyDeleteAnyone thinks CFTC vote on commodity trading will change the picture? are we entering in new commodity bear market? watch out voting is today so may see wild swing in prices just like we are seeing since morning
ReplyDeletethoughts?
The key is position limits, at least for silver shorts. If they do institute those finally, we may see some bullish action, not sure how soon though.
ReplyDeleteI think it is out already and looks like no change in position limit here is the link for statement www.cftc.gov/pressroom/speechestestimony/dunnstatement101811
ReplyDeleteHoly shit look at the reversal in silver amazing
ReplyDeleteNot what most want to hear but after some softness by the close today I think we rip into the end of the week and then have a larger sell off early next week.
ReplyDeleteAlso note that if that happens we will get a bullish MACD cross so be that sell off may be limited.
Just some food for thought.
yes, it seems silver is growing a hairy bottom... did somebody exit short position or something? such violent move up.
ReplyDeleteSB, thanks for the link.
Wasnt only silver all commodities including gold and oil went up sharply due to sharp reversal in USD; just not sure what prompted usd reversal
ReplyDeleteAnon - I'll show some charts with patterns. Waiting game for now.
ReplyDeleteus buck, testing old resistance:
ReplyDeletehttp://img204.imageshack.us/img204/2435/streamingserver7994678.gif
SC
ReplyDeleteThanks. You also have ST cycles analysis,
do they show weakness into the close today ?
Thought waiting for Bernanke before weakness shows up, for seems no new news from him.
Don't think we'll see too much today.
ReplyDeleteThanks, SC .
ReplyDeleteSC according to your original cycle this week suppossively bullish; do you think todays amazing reversal has changed the cycle Nd your target for low has changed?
ReplyDeleteThanks
SC- Is it possible that your cycles are actually pointing to a high around Oct 21-24th? S&P looks much more likely to make a new high here than it does to continue yesterday's drop, IMO. I do think that we are back in a long term bear market, but short term still looks quite bullish on the intraday charts. Thanks
ReplyDeleteGenerally, my thinking is that we are seeing chop before the drop. I do think the high is in, but more chop looks likely.
ReplyDeleteOne thought I am having is that we haven't yet hit the upper red forkline in cash trading. That would explain why we are burning some time with this chop.
If the high is in, then the current move would be a failed test which would be very bearish. IMO, price action remains quite strong and new highs are in order which would of course eliminate the "failed test" argument.
ReplyDeleteThanks SC
ReplyDeletePK it does look like strong reversal but still has not crossed high; except oil which favours your argument but looking at gold which is only remain in red gives hope to bears; and also dont forget to check volume it is going up today. i havent seen any news that justify this rally unless we dont know something which big players knows already.
SPY DAILY..........
ReplyDeleteShort term cycle pressure up into next time line! Good trading joed
http://img528.imageshack.us/img528/536/clipboard02j.gif
We just hit that red fork.
ReplyDeleteEMINI DAILY CONFLUENCE
ReplyDeletehttp://img338.imageshack.us/img338/3817/clipboard041.gif
SC and Gabe..
ReplyDeletedo we go up from here or down?
What does thT mean Gabe? are we entering new channel? going higher?
ReplyDeleteSC so you think today your target met after hitting red line?
That was the news which was kept under wrap, euro bailout fund approval....looks like market can go still higher on steroid and somepoint will come sell on news effect hopefully
ReplyDeleteat least now we can identify (with a higher degree of confidence) at which point the trend has turned, and that would be all the major indexes (S&P, RUT, NDX) breaking below today's lows. For some that may be way too far but that's the way it is.
ReplyDeleteIt slumped after hitting that fork. Both RUT and Rifin have double tops. That does favour the bears.
ReplyDeletethere have been "one too many" calls for a top so maybe we should wait for confirmation
ReplyDeleteEMINI 5 MIN WORKING CHART
ReplyDeletehttp://img441.imageshack.us/img441/3277/clipboard025.gif
Looks strong into end of week to 1240-1250ish..............
ReplyDeleteThen I see the sell off of some magnitude early next week.
I think building shorts on the way up is prudent.
Boom huge apple Miss...
ReplyDeleteDOWN WE GO CHAPS!!!
My plan is to keep buying the dip as we go. 135 handles up from my Oct 3rd low and counting. May highs will be tested before the end of the year..
ReplyDeleteGood luck to everyone tomorrow. Long time lurker who really wants the bear scenario to pan out. Unfortunately, my own hourly chart flashed a buy at SPX 1211, forcing me to cover and go long. This is a wonderful blog and board.
ReplyDeleteEMINI 240 MAP
ReplyDeletehttp://img90.imageshack.us/img90/8629/clipboard046.gif
Great chart, Gabe. Thank you for sharing your work so freely.
ReplyDeleteEMINI 249 MIN MAP........typos corrected
ReplyDeletehttp://my.imageshack.us/v_images.php
Apple after hour trading price has erased all previous 5 days gain. I think this will drag down the tech sector big time. Are we going back to the 5 day ago price level tomorrow ?
ReplyDeleteSorry Gabe, for some reason Imageshack is refusing to show either of the images you've posted. Perhaps the URL for the second one was incorrect? Thanks for taking the time to post here.
ReplyDeleteSpudthorpe
ReplyDeleteMy fault.........try this!
http://imageshack.us/photo/my-images/256/clipboard046.gif/
Thanks Gabe, that worked.
ReplyDelete