Patience bears...

13 Mac 2022

2D chart of SPX vs. 1D chart of NDX during 2000 bubble top. It took NDX 24 days to paint an obvious zigzag on the daily... for SPX it took 52 days. If we use that ratio and apply it to the moving averages you can see that NDX found support (and continued to) at the 200 moving average and SPX found support at the 185 moving average. Conversely I've shown the 110 and 105 moving averages in orange acting as near term resistance. Too many similarities here for me not to pay attention to the cyclical moves here.

I'm still of the belief that this initial wave down will not stop until it tests that major resistance line (same thing happened in 2000) but I may need to extend my timeframe out a bit after looking at the weekly chart. The current trajectory of the drop is simply way too steep and the Gann angles need to shallow out before that inflection point.

As said before I am bullish for the coming week or 2 as I don't think this thing is just gonna draw a perfect wedge and keel over, Initial reaction to FOMC recently has been mixed but there has usually been a multi day rally afterwards. Bears shouldn't get greedy here and instead wait for signs of bearish divergence on hourly RSI. I've been expecting an expanding diagonal to finish this out and that's what you see in the NDX for the final wave of the initial move down.

A 440/460 call spread on SPY looks like a good idea on the bounce, but we'll cross that bridge when we get there... As always all my shorts are going on QQQ and my bullish bets on SPY. But honestly based on this projection it's quite possible bears may need to wait many months before that big fat red trendline is broken and the real selling starts.

Fun useless fact: The NDX painted 4816 at the top before keeling over... the SPX? 4818!.... Coincidence?!?!? ;) Let's hope the SPX doesn't end at the where NDX wound up... 795.

15 Mac 2022

Nota

As expected the index is bouncing HARD off of that 185 MA. I'm expecting it to head back up to the bottom of the lost channel one more time to chase the 100 MA.

15 Mac 2022

Nota

Here is a more nuanced approach to gauge the length of this bounce... If the rally continues into the week, we paint an ABCD and follow the dotcom bubble path to wave (v) of A. If it can't rally past the .618 retrace after FOMC then we use the pandemic model of a three drives to complete wave (v)

18 Mac 2022

Nota

ABCD complete as expected and ready to test 200 DMA and fill the gap above also as expected early next week.

Despite what seems like unanimous bullishness, I'm expecting momentum will come to a halt next week and turn around the following week if not on Friday. A rejection indicated on the drawing will virtually guarantee a lower low.

21 Mac 2022

Nota

As expected rally hit a brick wall today and painted it's first red daily candle. Since the ATH, a red daily candle has basically meant an inflection point was close and a local top was imminent. Check out how the 1x1 Gann angle here has rejected all previous rallies in the last drop. I expect the 2x1 (red) to do the same for this drop.

22 Mac 2022

Nota

See anything familiar? Current ABC rally from bottom is following waveform of previous ABC to a tee... Expectation is exhaustion gap tomorrow in an attempt to reach .618 retrace, followed by a small dump, then pump on Thursday with likely another exhaustion gap up at a higher high on Friday.

Still not quite sure what people are buying here... that dot plot was pretty hawkish and the initial selloff was the right reaction. But I guess since Powell said he doesn't see a recession (I mean what else is he supposed to say?) we're going back to ATHs?

Control area is 4400 to 4350. My guess is whatever point we stop those levels will be the .382 and .500 retrace respectively (see chart)

23 Mac 2022

Nota

Roadmap for RoW.

23 Mac 2022

Nota

Recall the original chart comparison to NDX in the 2000 bubble... here we are again, with the same moving averages and on the 2D chart the SPX paints an inverted hammer just like the NDX on the daily.

I gotta admit I'm surprised at how poorly SPX performed today relative to QQQ... tells me all a lot of the buying is retail trying to crowd the tech trade. At the very least we'll get a double top here... bothers me that there's a gap overhead, and neither the .618 or the top of channel/Gann angle were tested. It may take a retrace lower before we see those though. Regardless, the larger move down is yet to come.

24 Mac 2022

Nota

Yesterday I noted how the S&P has been severely underperforming QQQ... and here is an illustration of how the swoon of retail chasing the crowded mega tech trade has portended an eventual downturn. I think we'll see SPX 4400 very soon...

30 Mac 2022

Nota

Gapped and ran over significant resistance... FOMO is indeed rampant right now. And this breakout feels... wrong, as in unsustainable for not just technical reasons. Feels like early 2018 when the Fed was just about to start running off its balance sheet and the index went parabolic in January... only to give it all back during just the first week of February.

I think release of the Fed minutes in the 1st week of April can be a similar catalyst if actual details about the pace of the run-off surfaces. Currently I've got the VIX bottoming on April 1st. I believe as we get closer to earnings season the market will start to roll over.

2 Apr 2022

Nota

As expected the breakout turned out to be fool's gold... The 4 day chart prints an inverted hammer and NDX rejected at .618 at the convergence of the 100 and 200 day moving averages.

We may yet double top or perhaps even make some kind of marginal higher high, but I'm calling wave B over.