We may have the catalyst now for a giant move lower. We'll see how the U.S. market reacts to the failure of the Senate to approve the automakers request for funds. Futures have dropped in a big way. And if the $/yen has cratered.
Today will probably be the tell-tale day. If the bears can't shove this lower (assuming the news doesn't change - like if Bush rescues them with TARP), then we may see a monster rally.
In my opinion, the higher probability move now is for the S&P to drop down into the 815/820 range and retest those lows. I believe if hedge fund selling accelerates, that level might be sliced through like a hot knife through butter, which would be very bearish and would suggest a retest of the primary lows, if not the creation of new lows. Selling after 3 pm is starting to gain traction again, which was the domain of the hedge funds in the past. This may be their queue to start selling.
Nothing useful to add, but thanks for your observations. The losses in my December SKF and SDS calls are such that, barring horror in the markets, I can only hope for recovery. Got in too early and forked over too much in premium.
most hedge funds have said "no" to redemptions believe it or not. sick as it may be...they wont be redeeming for those clients until Mar - May. On top of this Bloomberg has filed suit to the FED to find out where $2Trillion of thier balance sheet went. they responded "not in public interest" so they are trying to get the information...once this info is confirmed things will get ugly bcs we all know where the money went.
I agree. The problem is, the Fed is probably capable of stalling the discovery process in the courts for YEARS, so by the time we learn of it, it may be a moot point. In any event, the damage will have been completed by then and we will be well on our way toward picking up the scraps that remain identifiable as we salvage what's left of everything.
All the bull hope now hangs on the Senate. This has been a bearish day. If the Senate fails to pass the auto bill, I believe the markets will tank. It might anyway. My charts suggest the rising trend has now been broken (I measure my trend lines from lower bodies, not wicks - the bulk of price is within the bodies). The inside bars have also been broken on the downside. The bulls need now to see the markets IMMEDIATELY (tomorrow) turn around and rally back into the inside bar range.
Tony, recently you posted a video "Grinch...bye bye rally". Have you changed your outlook? VIX is hitting your trendline, and could bounce as you state. But if it fails to hold, it seems that we will have our xmas rally.
I'm looking at 880 and then ~867 as SPX support should VIX trendline hold support. These are 31.2 & 50% fib retraces from 12/5 - recent highs. If these levels hold, the xmas rally is still in the cards. Needs to get over 50-MA at around 920 now.
Thus, perhaps any attempt to break the lows would provide buying pressure, adding to support, and any clear break of the lows would provide sharp and heavy selling pressure as those longs are closed and their primary sells are initiated.
Any clear break of the lows could grow some seriously long legs, imo.
BTW, here's something to consider. Most of the hedge funds are probably sitting tight, waiting to see which way this will play out. If it breaks higher, they will hold on selling until they can see a top form. But if it breaks to the lower side, I can see them liquidating immediately. I would imagine they have buy orders at the daily lows with tight and heavy stop-and-reverse orders under the lows (good risk/reward).
By "main trend," I'm referring to the longer-term trend, which is still clearly down. The short-term trend is up. Technically, I'm inclined to lean towards a break higher. But in my mind, the odds are pretty even now. It could go either way. When it does breakout , the movement will probably be fairly vigorous.
Note that a break lower would also break the rising short-term trend-line, which would immediately switch us back into a bear mode. There's a lot at stake here. It will be interesting.
Hi changingperspectives... You can consider this price action as a "coiling up" event. Price is coiling up, getting ready to spring in one direction or another. There's no way to tell for certain which way it will spring, but it usually tends to spring in the same direction as it was running prior to the coil (higher). In this case, however, the main trend is still down. Momentum has slacked off, which could signal a reversal lower. Flip a coin. Trade whichever way this breaks out.
The second inside day in a row? Will this be scary enough to get the funds selling? The market held above 820, but it didn't test it either. Is the market basing in preparation for a leg up, or is it losing confidence? Meanwhile, I can't imagine that any bailout provided to Detroit will be particularly bullish, especially with the Auto Czar provision potentially a CDS triggering event... Your comments always appreciated.
I agree. It could grow some impressive legs for several weeks if it can hurdle this inside bar.
The futures tonight are supportive. European markets are supportive on negative news. The bulls still have short-term control. It will be an interesting day.
Bulls still do not want to see a test higher and a close near the open. That would be very bad for bulls, particularly after breaking an inside bar and failing to follow through. It isn't likely to happen, but I've seen stranger things.
The VIX still looks bearish. Looks like an inverted cup-n-handle sitting on top of 50-MA. It revisited the 50-MA in only 7 days this time, whereas last time it took 15 days. Negative divergence still present.
If SP500 can hold above 820, inspite of any bad news, I think we have a tradeable bottom. If it can break convincingly above its 50-MA at 925, then this rally may have real legs. The MACD looks very bullish.
...To look at the headlines over at MarketWatch, one doesn't get the impression they are trying to sweet-talk the market up (or even sideways) today. As long as it doesn't simply keel over on catastrophic news, perhaps they are willing to do some blood-letting (and ease the feverish urge to sell) on no news...
Yeah, there's been a bout of bad news. The fact that the market has responded to it (as opposed to ignoring the horrid NFP last Friday) may suggest sentiment is starting to turn. It's my personal opinion that it won't take very much negativity for the hedge funds to start selling hard again. In fact, today's inside bar may be scary enough to them to start selling tomorrow. I suspect breaking that upper daily high might be rather difficult to do. Breaking the low will probably be easier.
... It appears there is one more cycle low ahead of us, the Kress interim weekly cycle bottoming Dec. 18-21. While I am a bit of a sorcerors apprentice with all this, it appears the upturn in the 6 year cycle is likely to turn this low into something more mild than dramatic. I wonder whether some of Tony's behind-the-scenes analysis includes these Kress cycles?
For now, its either-or from you and watch-and-wait for me...
Well, my prayer is now for further demoralization on the part of the bulls, and urgency to raise cash on the part of the funds. This inside day doesn't give cause for happiness quite, but definitely some relief.
Tony has posted an article over at Market Oracle which suggests the old expanding triangle is still in play. Meanwhile...
If it breaks lower, 815 would be the bear target. This is technically (imo) a bull phase until price breaks and closes below about 815. At that point, the bears would have control and a target at or below the primary lows would be realistic.
Until then, this might get whippy with tests of the upside and/or the downside of this inside daily bar. The lines of defenses are now clearly drawn for both the bulls and the bears, short-term.
changingperspectives... you must be happy with what has happened today? Shorts are still in the game. My 2 cents..
Short-term, we have today formed an inside bar on the daily charts. A close below 900 and the inside bar gives the shorts a little bit of fuel, although this is now an "either-or" situation. Shorts will be in play if price breaks below today's lows. Longs will be in play if price breaks above todays high. If the inside bar breaks higher, 1000 would be a reasonable eventual target.
...last comment (I wish these comments could be longer!).
It is entirely possible we could see an equally bearish day tomorrow. That would be the very best of all worlds for shorts (a close tomorrow below 896).
Shorts now need one of two things to happen, and in VERY short order: A close tomorrow below 896, or a piercing test higher and a close right around where we closed today. Anything else, and this thing will likely test 1000, in my opinion.
Ah, yes, I'm short... and "praying for lack of conviction". I sidestepped Friday's rally, luckily, but then reentered with some December options. These aren't improving with age. I agree with you that the market is looking for just about any excuse to rally to 1000, and am grateful for your thoughts on what sort of price action might worry the bulls and embolden the bears It's a pity they never let the market have its capitulation, leaving it confused about itself, and totally confusing to me...
As for hedge funds pulling cash in stealth mode... they haven't been very stealthy to-date. When they withdraw, it makes big waves. With the amount of cash we're talking about, I think it would be hard to be stealthy.
If I were long from the lows, this would be an excellent place to take partial profits and pay for that long exposure. Wise (non-greedy) money management is key if you plan to survive these conditions. If you're short... I say keep praying for lack of conviction.
If it closes above 900 (particularly above about 917), then I'd say a retest of 1000 is a real possibility. But as always, there's a "gray" area. My gray area is if it closes below about 917. A break tomorrow above todays high will definitely be bullish for me and would suggest a retest of 1000 is under way.
So far today, I'm not terribly impressed with the rally. It seems to lack conviction in definitively breaking this 900 level, but we'll see where it closes.
...As much as a falling dollar may run to the market for protection, it seems to me a sustained market rally would suck recent "support" from the dollar very quickly. Either way, a Christmas rally could cost the dollar dearly. I'm wondering whether there's any way to think like the PPT?
The one good aspect of a falling dollar (which would be positive in almost all respects) would be how it would affect exports. Export pricing would drop, which would increase demand, which would help the economy (manufacturing in particular). I'm sure they're just about ready to engineer a dollar decline. Look at the dollar index and you'll see that this zone would be a fairly good technical level for the dollar to start declining. It has to happen sometime. Too much safe-haven activity.
You're probably right about this. They may find a way to engineer a soft decline, and as long as they don't allow gold and gold stocks to shine too bright and attract too much of that sidelined cash... Do you think we've cleared 900 decisively, or does this look like a head fake to you? Are the funds going to be able to pull out their cash in stealth mode, without disturbing the rally everyone wants?
Lots of great comments from all. Thanks. That 896 level in the S&P does have a bit of logic to it--close enough to safety for the morning-after funds, close enough to breakout to have pulled in some fresh bull meat. As for the dollar, as much as TPTB might like to rally the market from now thru the end of the year, or until the next administration takes office, I wonder whether they are reconciled to letting the dollar crash in that same time period...
Thanks for the video, Tony! Not long ago, you said that we were running out of time for a cycle bottom. To the degree that timing can be as important as price in predicting market action, could you update your sense of timing (near-term) on the VIX and the markets? The upcoming FOMC meeting and options expiry only add to the general confusion I'm feeling.
Is this a joke? What credible technician references the PPT? Your short term predictions couldn't be much worse. You called for a "rogue rally" several weeks ago as the mkt sold off. Then a week to 10 days ago you predicted a sharp selloff led down by the financials. We've had precisely the opposite - a strong rally led by the financials.
At this point, I simply tune in so I can fade your predictions. And here's some advice, dump the PPT analysis, and freshen up on your tech analysis.
BTW, if I was a hedge fund in need of money by the end of December, where would I consider a SAFE cash-out point on the S&P? I would consider ANY test of 896 as the best SAFE location to exit. Waiting for anything higher may be wishful thinking. But 896 should be a fairly easily achievable target right now. Just a thought... think like a hedge fund, minus the greed.
His service for more gems like this call? Look at his past few videos, they have been absolutely pathetic timing. Today(Monday) he's calling for a drop led by financials because of the vix channel? Must be the evil PPT working their games.
It would seem hedge funds control the game to a large measure right now (most everyone else is still sidelined). Not even the big sovereign wealth funds want to play very much.
As soon as the hedge funds see a reason to exit, the bears will regain control. They have a *LOT* of money they still need to raise by the end of December in order to handle their hefty redemption requests.
I think 1000 on S&P is realistic IF a rally can break and close above 900. That's still an IF. Maybe a big IF too.
The next logical FUNDAMENTAL move in the markets would seem to be a rally higher. When the market can't rally on news as negative as last Friday's NFP, it will run higher.
But remember, people, that this market has a VERY SHORT-TERM MEMORY! The very first hint of systemic bad news and you'll see profit taking on such a large scale as to reduce any rally to its knees.
That's why I say, the first bearish day and you'll see things tank hard.
im amazed at how they can hold this market up to move at will and time frame. what is the catalyst for the move lower? Auto bailout? clearly, none of the disgusting news that is pointing to an almost certain deflationary period and depression. must be some so called positive news like the autobailout that will proceed the down move. my gut tells me... up on Monday. gap Tuesday lower and lower until at least weeks end. the charts arent saying anything too clear so im using my gut. im short
Wave principle can be used on indices where mass psychology is in action. Although VIX is a traded index, it may not be the place where wave principle is as evident as in case of S&P500 or DJIA.
I am curious as to why do you believe that EWP can be used with VIX?
Tony, the MACD is showing bearish divergence for VIX. Note the negative divergence from 11/1 - 12/5, where VIX makes a higher low during this period, while MACD make a lower low. Classic negative divergence.
Seems likely that VIX falls this week. Furthermore, if VIX breaks 55, then clearly VIX confirms a lower high and lower low, obstensibly confirming start of downtrend.
For how long? Who knows. But definitely bullish for stock market in shorter term. Agree?
I meant to mention that as well but ran out of space. It isn't just MACD. You have negative divergences for a number of indicators. When indicator guidance != pattern guidance you have a non-confirmation, and the pattern is suspect.
Like the Christmas tree Tony! And the posting of course. Should be an interesting week as usual - am bracing myself for the dollar crash. have a good week and...do the right thing!
But that isn't likely to happen anytime soon yet. It SHOULD, but the first agency to do that is going to be enemy #1 and would probably be sued into the ground by the U.S. government.
We may have the catalyst now for a giant move lower. We'll see how the U.S. market reacts to the failure of the Senate to approve the automakers request for funds. Futures have dropped in a big way. And if the $/yen has cratered.
Today will probably be the tell-tale day. If the bears can't shove this lower (assuming the news doesn't change - like if Bush rescues them with TARP), then we may see a monster rally.
rnwton 3 years ago
In my opinion, the higher probability move now is for the S&P to drop down into the 815/820 range and retest those lows. I believe if hedge fund selling accelerates, that level might be sliced through like a hot knife through butter, which would be very bearish and would suggest a retest of the primary lows, if not the creation of new lows. Selling after 3 pm is starting to gain traction again, which was the domain of the hedge funds in the past. This may be their queue to start selling.
rnwton 3 years ago
Nothing useful to add, but thanks for your observations. The losses in my December SKF and SDS calls are such that, barring horror in the markets, I can only hope for recovery. Got in too early and forked over too much in premium.
changingperspectives 3 years ago
most hedge funds have said "no" to redemptions believe it or not. sick as it may be...they wont be redeeming for those clients until Mar - May. On top of this Bloomberg has filed suit to the FED to find out where $2Trillion of thier balance sheet went. they responded "not in public interest" so they are trying to get the information...once this info is confirmed things will get ugly bcs we all know where the money went.
maximumvalues 3 years ago
I agree. The problem is, the Fed is probably capable of stalling the discovery process in the courts for YEARS, so by the time we learn of it, it may be a moot point. In any event, the damage will have been completed by then and we will be well on our way toward picking up the scraps that remain identifiable as we salvage what's left of everything.
rnwton 3 years ago
All the bull hope now hangs on the Senate. This has been a bearish day. If the Senate fails to pass the auto bill, I believe the markets will tank. It might anyway. My charts suggest the rising trend has now been broken (I measure my trend lines from lower bodies, not wicks - the bulk of price is within the bodies). The inside bars have also been broken on the downside. The bulls need now to see the markets IMMEDIATELY (tomorrow) turn around and rally back into the inside bar range.
rnwton 3 years ago
Tony, recently you posted a video "Grinch...bye bye rally". Have you changed your outlook? VIX is hitting your trendline, and could bounce as you state. But if it fails to hold, it seems that we will have our xmas rally.
I'm looking at 880 and then ~867 as SPX support should VIX trendline hold support. These are 31.2 & 50% fib retraces from 12/5 - recent highs. If these levels hold, the xmas rally is still in the cards. Needs to get over 50-MA at around 920 now.
Your thoughts?
schan7230 3 years ago
Thus, perhaps any attempt to break the lows would provide buying pressure, adding to support, and any clear break of the lows would provide sharp and heavy selling pressure as those longs are closed and their primary sells are initiated.
Any clear break of the lows could grow some seriously long legs, imo.
rnwton 3 years ago
BTW, here's something to consider. Most of the hedge funds are probably sitting tight, waiting to see which way this will play out. If it breaks higher, they will hold on selling until they can see a top form. But if it breaks to the lower side, I can see them liquidating immediately. I would imagine they have buy orders at the daily lows with tight and heavy stop-and-reverse orders under the lows (good risk/reward).
rnwton 3 years ago
By "main trend," I'm referring to the longer-term trend, which is still clearly down. The short-term trend is up. Technically, I'm inclined to lean towards a break higher. But in my mind, the odds are pretty even now. It could go either way. When it does breakout , the movement will probably be fairly vigorous.
Note that a break lower would also break the rising short-term trend-line, which would immediately switch us back into a bear mode. There's a lot at stake here. It will be interesting.
rnwton 3 years ago
Hi changingperspectives... You can consider this price action as a "coiling up" event. Price is coiling up, getting ready to spring in one direction or another. There's no way to tell for certain which way it will spring, but it usually tends to spring in the same direction as it was running prior to the coil (higher). In this case, however, the main trend is still down. Momentum has slacked off, which could signal a reversal lower. Flip a coin. Trade whichever way this breaks out.
rnwton 3 years ago
The second inside day in a row? Will this be scary enough to get the funds selling? The market held above 820, but it didn't test it either. Is the market basing in preparation for a leg up, or is it losing confidence? Meanwhile, I can't imagine that any bailout provided to Detroit will be particularly bullish, especially with the Auto Czar provision potentially a CDS triggering event... Your comments always appreciated.
changingperspectives 3 years ago
I agree. It could grow some impressive legs for several weeks if it can hurdle this inside bar.
The futures tonight are supportive. European markets are supportive on negative news. The bulls still have short-term control. It will be an interesting day.
Bulls still do not want to see a test higher and a close near the open. That would be very bad for bulls, particularly after breaking an inside bar and failing to follow through. It isn't likely to happen, but I've seen stranger things.
rnwton 3 years ago
The VIX still looks bearish. Looks like an inverted cup-n-handle sitting on top of 50-MA. It revisited the 50-MA in only 7 days this time, whereas last time it took 15 days. Negative divergence still present.
If SP500 can hold above 820, inspite of any bad news, I think we have a tradeable bottom. If it can break convincingly above its 50-MA at 925, then this rally may have real legs. The MACD looks very bullish.
schan7230 3 years ago
...To look at the headlines over at MarketWatch, one doesn't get the impression they are trying to sweet-talk the market up (or even sideways) today. As long as it doesn't simply keel over on catastrophic news, perhaps they are willing to do some blood-letting (and ease the feverish urge to sell) on no news...
changingperspectives 3 years ago
Yeah, there's been a bout of bad news. The fact that the market has responded to it (as opposed to ignoring the horrid NFP last Friday) may suggest sentiment is starting to turn. It's my personal opinion that it won't take very much negativity for the hedge funds to start selling hard again. In fact, today's inside bar may be scary enough to them to start selling tomorrow. I suspect breaking that upper daily high might be rather difficult to do. Breaking the low will probably be easier.
rnwton 3 years ago
... It appears there is one more cycle low ahead of us, the Kress interim weekly cycle bottoming Dec. 18-21. While I am a bit of a sorcerors apprentice with all this, it appears the upturn in the 6 year cycle is likely to turn this low into something more mild than dramatic. I wonder whether some of Tony's behind-the-scenes analysis includes these Kress cycles?
For now, its either-or from you and watch-and-wait for me...
changingperspectives 3 years ago
Well, my prayer is now for further demoralization on the part of the bulls, and urgency to raise cash on the part of the funds. This inside day doesn't give cause for happiness quite, but definitely some relief.
Tony has posted an article over at Market Oracle which suggests the old expanding triangle is still in play. Meanwhile...
changingperspectives 3 years ago
If it breaks lower, 815 would be the bear target. This is technically (imo) a bull phase until price breaks and closes below about 815. At that point, the bears would have control and a target at or below the primary lows would be realistic.
Until then, this might get whippy with tests of the upside and/or the downside of this inside daily bar. The lines of defenses are now clearly drawn for both the bulls and the bears, short-term.
rnwton 3 years ago
changingperspectives... you must be happy with what has happened today? Shorts are still in the game. My 2 cents..
Short-term, we have today formed an inside bar on the daily charts. A close below 900 and the inside bar gives the shorts a little bit of fuel, although this is now an "either-or" situation. Shorts will be in play if price breaks below today's lows. Longs will be in play if price breaks above todays high. If the inside bar breaks higher, 1000 would be a reasonable eventual target.
rnwton 3 years ago
Not 'The Telltale Heart,' but 'The Telltale Chart.' Ha ha! :-)
TradeLoose 3 years ago
...last comment (I wish these comments could be longer!).
It is entirely possible we could see an equally bearish day tomorrow. That would be the very best of all worlds for shorts (a close tomorrow below 896).
Shorts now need one of two things to happen, and in VERY short order: A close tomorrow below 896, or a piercing test higher and a close right around where we closed today. Anything else, and this thing will likely test 1000, in my opinion.
My own opinion is we're seriously overbought.
rnwton 3 years ago
Ah, yes, I'm short... and "praying for lack of conviction". I sidestepped Friday's rally, luckily, but then reentered with some December options. These aren't improving with age. I agree with you that the market is looking for just about any excuse to rally to 1000, and am grateful for your thoughts on what sort of price action might worry the bulls and embolden the bears It's a pity they never let the market have its capitulation, leaving it confused about itself, and totally confusing to me...
changingperspectives 3 years ago
...Again, I appreciate your informed instincts on the market's mood short-term. I have a hard time with that.
changingperspectives 3 years ago
As for hedge funds pulling cash in stealth mode... they haven't been very stealthy to-date. When they withdraw, it makes big waves. With the amount of cash we're talking about, I think it would be hard to be stealthy.
If I were long from the lows, this would be an excellent place to take partial profits and pay for that long exposure. Wise (non-greedy) money management is key if you plan to survive these conditions. If you're short... I say keep praying for lack of conviction.
rnwton 3 years ago
If it closes above 900 (particularly above about 917), then I'd say a retest of 1000 is a real possibility. But as always, there's a "gray" area. My gray area is if it closes below about 917. A break tomorrow above todays high will definitely be bullish for me and would suggest a retest of 1000 is under way.
So far today, I'm not terribly impressed with the rally. It seems to lack conviction in definitively breaking this 900 level, but we'll see where it closes.
rnwton 3 years ago
...As much as a falling dollar may run to the market for protection, it seems to me a sustained market rally would suck recent "support" from the dollar very quickly. Either way, a Christmas rally could cost the dollar dearly. I'm wondering whether there's any way to think like the PPT?
changingperspectives 3 years ago
The one good aspect of a falling dollar (which would be positive in almost all respects) would be how it would affect exports. Export pricing would drop, which would increase demand, which would help the economy (manufacturing in particular). I'm sure they're just about ready to engineer a dollar decline. Look at the dollar index and you'll see that this zone would be a fairly good technical level for the dollar to start declining. It has to happen sometime. Too much safe-haven activity.
rnwton 3 years ago
You're probably right about this. They may find a way to engineer a soft decline, and as long as they don't allow gold and gold stocks to shine too bright and attract too much of that sidelined cash... Do you think we've cleared 900 decisively, or does this look like a head fake to you? Are the funds going to be able to pull out their cash in stealth mode, without disturbing the rally everyone wants?
changingperspectives 3 years ago
Lots of great comments from all. Thanks. That 896 level in the S&P does have a bit of logic to it--close enough to safety for the morning-after funds, close enough to breakout to have pulled in some fresh bull meat. As for the dollar, as much as TPTB might like to rally the market from now thru the end of the year, or until the next administration takes office, I wonder whether they are reconciled to letting the dollar crash in that same time period...
changingperspectives 3 years ago
Thanks for the video, Tony! Not long ago, you said that we were running out of time for a cycle bottom. To the degree that timing can be as important as price in predicting market action, could you update your sense of timing (near-term) on the VIX and the markets? The upcoming FOMC meeting and options expiry only add to the general confusion I'm feeling.
changingperspectives 3 years ago
Is this a joke? What credible technician references the PPT? Your short term predictions couldn't be much worse. You called for a "rogue rally" several weeks ago as the mkt sold off. Then a week to 10 days ago you predicted a sharp selloff led down by the financials. We've had precisely the opposite - a strong rally led by the financials.
At this point, I simply tune in so I can fade your predictions. And here's some advice, dump the PPT analysis, and freshen up on your tech analysis.
anujbahl 3 years ago
This has been flagged as spam show
It is a bad joke. Fade him out.
Your only getting half the story. For the rest of the story, you must subscribe to his service.
That's how it is.
bill1611 3 years ago
BTW, if I was a hedge fund in need of money by the end of December, where would I consider a SAFE cash-out point on the S&P? I would consider ANY test of 896 as the best SAFE location to exit. Waiting for anything higher may be wishful thinking. But 896 should be a fairly easily achievable target right now. Just a thought... think like a hedge fund, minus the greed.
rnwton 3 years ago
It is a bad joke. Fade him out.
Your only getting half the story. For the rest of the story, you must subscribe to his service.
That's how it is.
bill1611 3 years ago
I must subscribe to Tony's service? And if I did, what would I discover?
rnwton 3 years ago
His service for more gems like this call? Look at his past few videos, they have been absolutely pathetic timing. Today(Monday) he's calling for a drop led by financials because of the vix channel? Must be the evil PPT working their games.
anujbahl 3 years ago
It would seem hedge funds control the game to a large measure right now (most everyone else is still sidelined). Not even the big sovereign wealth funds want to play very much.
As soon as the hedge funds see a reason to exit, the bears will regain control. They have a *LOT* of money they still need to raise by the end of December in order to handle their hefty redemption requests.
I think 1000 on S&P is realistic IF a rally can break and close above 900. That's still an IF. Maybe a big IF too.
rnwton 3 years ago
The next logical FUNDAMENTAL move in the markets would seem to be a rally higher. When the market can't rally on news as negative as last Friday's NFP, it will run higher.
But remember, people, that this market has a VERY SHORT-TERM MEMORY! The very first hint of systemic bad news and you'll see profit taking on such a large scale as to reduce any rally to its knees.
That's why I say, the first bearish day and you'll see things tank hard.
rnwton 3 years ago
im amazed at how they can hold this market up to move at will and time frame. what is the catalyst for the move lower? Auto bailout? clearly, none of the disgusting news that is pointing to an almost certain deflationary period and depression. must be some so called positive news like the autobailout that will proceed the down move. my gut tells me... up on Monday. gap Tuesday lower and lower until at least weeks end. the charts arent saying anything too clear so im using my gut. im short
maximumvalues 3 years ago
are my posts updating?
Erik28tx 3 years ago
Wave principle can be used on indices where mass psychology is in action. Although VIX is a traded index, it may not be the place where wave principle is as evident as in case of S&P500 or DJIA.
I am curious as to why do you believe that EWP can be used with VIX?
amitp2 3 years ago
Tony, the MACD is showing bearish divergence for VIX. Note the negative divergence from 11/1 - 12/5, where VIX makes a higher low during this period, while MACD make a lower low. Classic negative divergence.
Seems likely that VIX falls this week. Furthermore, if VIX breaks 55, then clearly VIX confirms a lower high and lower low, obstensibly confirming start of downtrend.
For how long? Who knows. But definitely bullish for stock market in shorter term. Agree?
Your thoughts?
schan7230 3 years ago
I meant to mention that as well but ran out of space. It isn't just MACD. You have negative divergences for a number of indicators. When indicator guidance != pattern guidance you have a non-confirmation, and the pattern is suspect.
McCallan18 3 years ago
great point schan7230
also, if you look at the vix, it has not stayed under 50 on the RSI for longer than 2-3 days in a row for a LONG LONG LONG TIME!
If it does (its at 48 now) that is a MAJOR change in sentiment.
Im bullish untill the END of the yr (at least)
Obama inaguration (at most)
THEN...its bear time, but NOT now....at all
Erik28tx 3 years ago
Tony, I see what you are talking about and confirmed the pattern in EWP. So you are right. There's three open issues here:
1) Time: How long before wave D & E complete? D is clearly not complete and as EWP says people often don't give triangles enough time to play out.
2) False breakout: Very likely we will get a false breakout for E. We should count on that.
3) Inverse Index: We are using a correlated inverse index (VIX) to determine behavior in the major indices. That's problematic IMO.
McCallan18 3 years ago
Like the Christmas tree Tony! And the posting of course. Should be an interesting week as usual - am bracing myself for the dollar crash. have a good week and...do the right thing!
buffett1000 3 years ago
dollar crash?
if the dollar crashes the stock market will go up!!! w/ commodity plays leading.
a dollar crash is BULLISH for the market!!!!
Erik28tx 3 years ago
Not if it's the result of a debt downgrade.
But that isn't likely to happen anytime soon yet. It SHOULD, but the first agency to do that is going to be enemy #1 and would probably be sued into the ground by the U.S. government.
rnwton 3 years ago