New Higher High Still Coming Or Lower High?

… by Ali Firoozi Yasar

A shot to the new highs but April is the month you need to watch closely!

As you know, incoming US economic data in early 2014 have been largely disappointing and the Fed blames the weaker performance mainly on the impact of unseasonably cold weather on consumer spending, industrial activity and construction. In January, retail sales data came out well below expectations, existing home sales and housing starts started trending significantly lower, US manufacturing activity also appeared to be decelerating , industrial production declined at the beginning of the year, durable goods orders continued to contract and ISM manufacturing index dropped to an eight month low.

US real GDP is expected to advance 2.8% this year and 3% in 2015, roughly a percentage point above 2013. Actually, the Fed believes the events and factors at play are short-lived and the US economic recovery remains intact. Actually, this bunch of weak economic data has not yet convinced them to let the market drop as it has all been the weather’s fault not anybody else….

As for the geopolitical tensions, Ukraine crisis cannot just be ignored. Actually, it is a global crisis and will not be a one-day news story which will fade away soon. You see, it has a real potential to be escalated real soon. All eyes are on Russia and Ukraine, watching them closely.

As you saw, after a sharp decline to open the trading session on Monday, the markets immediately recovered all over the trading day following Mr. Putin’s latest statement, relieving the buyers who were actually looking for value on the dip, and the buying has been continuing to open up the session for tomorrow so that we can see a shot back to the highs. In fact, buyers are all in control, buying the dip whenever they get a chance and we may also have new all time highs. But how much is it going to last?

In my previous post, I mentioned that the market could exceed the levels on my charts, as I somehow knew the “central planners” would be able to get the situation under control, and then put the blame on the bad weather. But how are they supposed to fight the serious events that are about to come up in April. Yes, you heard me, April! Actually, next month will be a rough month for investors and financial markets. Keep an eye out for the markets around these dates, April 15th, 24th and 29th.

I have repeated over and over again that the market will have to correct on the monthly chart as the cycle has just completed and they (central planners) are trying their hardest to hold it up as much as they can. Whether it is a serious geopolitical tension or a financial crisis which might pop up out of nowhere in April and cannot be blamed on the weather, the stock market will have to retrace a major portion of the gains which has been accumulated since the rebound of 2009. If that does not happen, I will sure need to go back to the drawing board to just find out what is wrong with my cycle analysis.

 

May you profit handsomely,

Ali

www.divinechartpatterns.com

info@divinechartpatterns.com

 

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… by Red

Is this the start of Primary 4 Down or is there one more move higher still to come?

(to watch on youtube: www.youtube.com/watch?v=atoahCbWYt0)

Looking at the charts on the various time frames I could argue a case for both scenario’s.  One will be right and one will be wrong so we simply have to play the safest bet which I think will be long around the middle to the end of this coming week… but ultimately we know that the powers that be already know which one will play out and it’s our job to read their minds.

For right now I think we can all agree that the direction is currently down.  But a bottom should appear sometime this week, with the 19th-21st being the idea time frame.  Why?  Simple really.  The coming FOMC meeting on Wednesday the 19th should gives us the clues we need.  Assuming that nothing changes and the Fed’s decide to continue with their plans to withdraw more of the QE money then we should logically expect some negative reaction from it afterwards.  But, as we all know, the market thinks and reacts ahead of the news… which means that “most” of the selling should be about over with by the time the news is released.

I’m looking for a target low of 1810-1815 SPX for the first area of support.  But, I suspect that for that level to work out as being the low we really need to rally some ahead of this coming FOMC meeting.  Technically, we are do for a bounce but with the meeting still in front of us I suspect that we will not bounce any and just continue drifting lower due to the fear of the “unknown” from whatever will be said at the meeting.  So, we could actually drop to that zone going into the meeting instead of bouncing up to an overhead downward sloping trendline of resistance in the 1860 area.

While we know that one should never trade off the news as it’s already built into the charts ahead of time we also should know that with some pending (possibly negative) news lurking just a few days away shouldn’t expect any turn back up just because some short term charts are getting oversold.  The market does react to news as it’s put out their by the powers that be to mislead the sheep in the wrong direction by having something to blame the selling or buying on.  Of course if there was no Fed meeting this week then I’d expect the market to bottom around the open on Monday and start rallying from oversold short term charts… but that’s not the case here!

So, we should expect the market to chop around until the FOMC minutes are released Wednesday around 2:15 pm, with a downward bias of course.  I suspect that we’ll end up dropping to that 1810-1815 area prior to the meeting… which should get a lot more short term charts (and the daily too) in an oversold condition, which means the bottom will be near.

Then once the news is announced that they have decided to “stay the course” (meaning to continue withdrawing money) we should see another move down out of fear (done by the retail sheep of course), which could drop us to the rising trendline of support in the 1790 area.  Bears should be all over it as it breaks down through the “even number” level of 1800 and that’s about when I think we’ll bottom.

I’ve noticed that “Skynet” (the name I’ve given to the super computer that manipulates the market) has routinely pierced through important levels briefly to lure in the last retail sheep just before switching and going the opposite direction.  It should be the same thing for the bulls “if” we rally up to new higher highs in the coming month hit 1900… which of course should be pierced by 5-10 points to trap those bulls long.  While I don’t know if we are going up to new highs or not I do believe the coming low will trap the bears short… which is why I suspect 1800 will be broken briefly.

I’ve seen this happen many times in the past and have calculated that these moves usually last 18-20 calendar days and drop 80-100 SPX points.  They also don’t give use bears many chances to get short with a decent bounce.  While I’d love to see a bounce to that downward sloping trendline of resistance (around 1860 now) we might not see it at all?  That bounce might not show up until after we bottom in the 1790 area, and then it will of course be lower (in the 1850 probably).

I think the thing to do is to see where the market trades at on Monday and Tuesday prior to the meeting.  If it doesn’t fall to the 1810-1815 area and instead chops around in this 1840 zone then we could see some brief rally up to hit that trendline right around the FOMC minutes to scare out the bears that are currently short.  Then a drop to that 1790 area within a couple more days following the meeting.  That would suggest a low by Friday the 21st, which could be the plan Skynet has for us sheep?

The other plan would of course be a continue drop into the meeting with a low in the 1810-1815 area when the minutes are released, followed by some panic selling to the 1790 area, and then a rally back up to start from that day forward into the rest of the week or more.  The only thing I see here that has high odds is that we will continue down more next week and probably bottom in the 1790 area.  Then the rally that follows could put in a lower high (then the 1883 high) or make one last higher high in the low 1900 area.

Therefore the safest plays I see here are to short any decent bounces with a exit low area of 1790 and then get long for a rally to at least the downward sloping trendline of resistance, which should be in the 1840-1850 by then.  After that I don’t know?  We’ll have too see what the charts tell us at that time as well as the propaganda being pitched to us sheep on the main stream media news channels.

If they continue to preach the end of the market scenario then we should expect the resistance to be broken and another higher high is likely.  If they talk about the market going to new all time highs then we should be shorting and expecting that resistance to hold and the expected right shoulder (of what should then make up a nice “head and shoulders” pattern) to become some type of “Wave B” up or “Wave 2″ up… meaning a big wave down should follow.

It’s really too early to know which will play out so for now I’ll just be focused on this coming week and will as always give you guys updates in the comment section as things change and play out in real time.  Making forecasts this far in advance are just to be used as a general road map of what to look for… not to trade off.  The charts change daily and the best I can do is tell you what I see today.  Always read the comments for updates.

Red

When will the stock market bubble burst?

February 9th, 2014 Update

Why will the huge stock market correction happen real soon?!

…by Ali Firoozi Yasar

I am not being paranoid here and aside from the cycle-work, there are clear reasons that a dramatic decline in the stock market is on the way. Actually, it could strike any day now. The market is just hitting pre-crash tops, we being at the beginning of a new bull market is all over the financial media and companies are still reporting positive earnings but you folks should be aware that the stock market is on the verge of another huge decline.

The annual S&P 500 consensus earnings per- share is expected to come in a lot lower than originally predicted. You see, estimates were so close to $125 in January 2012, and now have dropped 10% to only $112. In spite of the warning sign of declining earnings, the S&P keeps on going up.

The investors and traders are extremely bullish on the stock market now. As a matter of fact, the reading is getting close to a 10-year high, and most of you guys can tell from experience what happens if market sentiment is at extreme levels one way or the other. If the small traders are so bullish, you’d better be cautious. You know better than anybody else that what happens to sheep?! Sheep gets slaughtered.

Actually, I could name many other factors but now we have enough evidence and clear reasons (aside from my work) that the stock market is awaiting a drastic correction which could result in a dramatic stock market decline,  50% unemployment, and 100% annual inflation starting this year.

The charts I showed you in my last post the general trends of the market. In other words, the market may or may not exceed the levels I indicated on the charts. Actually, I only wanted to warn you guys to be prepared for the “unthinkable”.

I hope, you guys will consider this a wake-up call, especially those who are not prepared or willing to admit an ugly truth.

May you profit handsomely,

Ali

info@divinechartpatterns.com

www.divinechartpatterns.com

 

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February 3rd, 2014 Update

…by Ali Firoozi Yasar

As most of you folks are ware, we have recently received important news about the economy: GDP, Weekly jobless claims and pending home sales data and also an additional $10-billion QE tapering through the FOMCs latest statement.

S&P500 Daily 6

The annualized GDP rate sounded OK. Consensus was for a reading of 3.0% but in fact, the 4th Q estimate 22% in three months. The weekly jobless claims were supposed to show a reading of 327,000 but the actual data was a bit quite worse, at 348,000 new jobless claims. And eventually, the pending home sales data came out which was really terrible! You see, economics’ consensus was for a small depression of -0.5%; however, the actual release was  -8.7%.

Please check out the chart No.1 below. As I had already anticipated, the market topped out and the prices kept on moving down, finding support at the 1761.00 area. You see I am not so precise on the charts as I solely intended to show you the model, not focusing on the exact  price&time levels.

S&P500 daily M4

Now check out chart No.2, even though the markets will do what they are supposed to do, the main- stream analysts and advisers attributed the brief rebound on January 31st to the better then expected GDP figures and they would still like to see if the rebound is able to maintain the momentum to the upside, hoping the prices will go to the Moon, not knowing there are not many buyers left and it is time for a good break.

The prices will bounce real soon, back-testing 1810.00 area in order to suck in more retail traders, or we could see the market rally briefly, then a sideways chop, after that a drop to the lower levels as indicated on the chart. You see, my business cycle suggests that the U.S economy is ailing now; you may also see bad earnings reports during the coming days, adding fuel to the flame, consequently the market will have to correct and have a good break before it starts recovering again.

May you play it safely and profit handsomely,

Ali

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When will the stock market bubble burst?

…by Ali Firoozi Yasar

Hello folks!

Hope all is well with you guys.  I know it has been a long while since I last posted on Red’s blog.  I have been super busy at work, so my apologies for the long absence.  But now it’s important to get you all this update as the time is near.

The stock market is at a critical moment!  Goldman Sachs has suddenly decided to warn all of us that the stock market could decline by 10 percent or more in the coming months!  But are they just honestly trying to warn their clients that the stocks have become overvalued at this time or is it just another agenda at work?!

Whether it is an agenda or not the stock market has just entered a very dangerous zone.  Stocks are massively overpriced and investors have been borrowing huge amounts of money to buy stocks.  Consequently, the margin debt at the New York Stock Exchange is truly at a crazy level!

These kinds of behaviors and signs actually indicate that another bubble burst is on the way.  On top of that the state of overall U.S. economy is getting worse while the market is soaring to new highs.  It is not a good sign folks.  The U.S economy is in a very bad condition now, in fact it’s in a much worst condition then it was the last time we had a major crash back in 2008.

Employment is much worse now that it was at that time and the U.S banking system is more ailing with more debts than it was back then.  It owed about 10 trillion dollars but today the debt has increased to more than 17.2 trillion dollars.  The market keeps on fooling the masses with this illogical bubble, but this “fooling” can’t continue.

I highly suspect this massive stock market bubble will not last for much longer, and a lot of financial market experts are now advising and warning their clients to prepare for a substantial pull-back.  You see the market was manipulated by the Fed in early August when a dramatic decline was due.

A lot of people had already been aware of that, which was probably the reason for the delay until now.  The bottom line is… the energy of the current run has fully been drained and the Fed is not able to fight it any more.

Actually, it can be likened to a man who has been holding a big weight over his head for a little while but now his energy is getting depleted.  So he takes a quick shot of Adrenaline to keep him going a little longer (aka “more printed money secretly injected into the market… [most likely]), and you know it’s his 4th, 5th, 6th shot or more?  With each time the effects last a shorter time compared to the one prior, and I think this is the last shot before the weight is dropped!

S&P500 monthly(business model) copy

As mentioned above, the market was manipulated by the Fed in early August and it has been tolerating the burden since then.  They are not able to hold it up anymore.  This is actually what I see in the S&P500 based on the cycle work and harmonics.  I am afraid I cannot give out much information here as it could be leaked and copied.

S&P500 daily2

I believe the market will put in another high but the length of the rally will be relatively smaller, then a sharp decline to the 1350 area is possible.  After that, a rally back up to new highs (the 2100 area is very possible) will probably follow.  You see, it can be a huge opportunity to enter the market with a large short position when the time is right.  As soon as the decline kicks off there will not be a major pullback to re-enter so you would want to make sure not to miss the ride at the very top.

S&P500 weekly2

S&P500 monthly3

May you profit handsomely,

Ali

Email: info@divinechartpatterns.com

http://www.divinechartpatterns.com

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The Date For The Coming Crash Has Been Given To Us By The Elite Themselves

…by Red

(to watch on youtube: www.youtube.com/watch?v=g3kZh_RjXjA)

Email me for password…

red (at) reddragonleo (dot) com

This content is password protected. To view it please enter your password below:

 

 

 

 

 

 

Global Currency Reset Planned Within The Next 90 Days

Stock Market Forecast For 2014

(update made on January 2nd, 2014)

(to watch on youtube: www.youtube.com/watch?v=rKaaWIej2wQ)

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Lindsey Williams puts a date of “90 Days” until the elite will reset the currencies of 204 countries world wide!

While I can’t say that he’s going to be right… or wrong but this is first time I can recall him stated an exact time frame like this.  He’s previously stated dates like “by the end of 2013″ or “by the end of 2012″ the dollar will be basically worthless.  That’s not very specific as it’s too speculative due to the nature of what one person calls worthless versus what someone else states is worthless.

But I will admit that the “buying power” of the US Dollar is a whole lot less today then it was in 2011 as I’ve personally seen prices rise on food significantly in the last  2 years.  And I’ll noticed the trickery of the companies selling food products by keeping the price the same but by decreasing the size of the container that it’s in.  I now see 59 ounce bottles of orange juice instead of 64 ounces, which is a half gallon.  Other things they just rise the price on them or keep the box the same size but put less in the bag of chips as they just have mostly air in them inside a large bag.

(to watch on youtube: www.youtube.com/watch?v=xz-Mlomuwes)

It’s crooked but it’s all planned and done by the elite to keep us sheep stupid, fat and too tired to fight them.

I’m actually surprised that they let Lindsey state a time frame for the global currency reset.  So either they are setting him to look like a fool when it doesn’t happen or they are telling the truth and just don’t care if we sheep know about it as there’s nothing we can do to stop them.  That’s true I’m sure but while we can’t stop them we can profit from it… “if” it really does happen in the next 90 days?

The 90 days starts from December 4th, 2013 so that means it’s should happen by March 4th, 2014.  Now if you listen closely to Lindsey’s words you’ll notice he states that “if Christine Lagarde gets her way” (she’s the head of the IMF) then this global currency reset WILL happen.  The thing that stands out to me is that he says that we’ll first see them raid the pension funds of America and then shortly afterwards they will reset the dollar.  So if we don’t see them raid the pension funds then they won’t be resetting the dollar by 30% as he states.

So how can you profit from this you ask?

Simple really… “if” we see them confiscate the pension funds and nationalize them within the next 90 days then there is a very good chance that Lindsey will be correct and that they will devalue the dollar here in America (and the other 200+ countries) “shortly thereafter” as he states.  What Lindsey doesn’t tell us in this video is what the new reserve currency is (but I think I heard somewhere it’s going to be the Chinese Yuan?).  But regardless of what the new currency will be one thing will NOT be affected negatively and “should” go up an equal percentage to the value the dollar goes down.

That “thing” is GOLD… and “if” this happens as Lindsey states we could see gold go up 30% overnight when they devalue the dollar 30% overnight.  If one was to time this correctly and simply go long on gold via GLD by buying some “calls” a small fortune could be made.  While I can’t tell you what to do, which strike price to buy or when to buy it… you can figure this out if you just keep your ears open to see if they raid the pension funds first.  As if that happens you’ll know that they could do the currency devaluation shortly afterwards… and it should all happen before March 4th, 2014 if the 90 day period is correct.

You should know by now what time period I’ll be looking at hard for a decision to be made (or canceled?) as I told you all many times to pay close attention to when these people meet at this organization because many times (not always) “turns” in the market happen shortly before, during, or after any of these meetings.  The next meeting is February 6th-8th, 2014 so when the elite meet during this meeting they “should” make their final decision to “do” or “do not” reset the currencies and steal the pension funds.

Therefore my personal plan of action will be to look for them to steal the pension funds first and then shortly there after to devalue the dollar by 30%, and so I would be looking to buy some gold calls prior to the devaluation but after the pension fund raid.  Now I might also by a small position of calls simply ahead of the February 6th-8th meeting with the expectation that “they” will be stealing the pension funds right after the meeting.  They could do them both at the same time and therefore we’d miss the opportunity to get some gold longs via GLD Calls… which is why I might get some early in case they trick us and do it all together where we can’t get long in advance.

I will suggest that those of you that are familiar with options to login to your account daily and look at the amount of “open interest” that shows up every day in the various strike prices of the “GLD Calls” for the month of January, February and March 2014.  Why?  Because insiders WILL load up on gold calls shortly before this global currency devaluation happens.  If you see that please make sure you share that will everyone here on the blog by taking a screen shot and posting in the comments (or email it to me and I’ll post it).

To Watch on youtube:  https://www.youtbe.com/watch?v=NAT0xVIBl98

As far as the market I’d guess it won’t necessary move it too much but I’m sure there will be some fear and therefore selling in it.  I just see the biggest opportunity is in betting on the huge move up in gold.  Right now the market is selling off some but I wouldn’t be surprised if we rally this coming week and into the end of the year.

Red

P.S. Here’s the link to the article I speak of in the video…

http://www.safehaven.com/article/16985/gold-early-1930s-vs-early-2010s

P.S.S. If you want to watch the full version of Lindsey Williams’ video it’s here:

To watch on youtube:  https://www.youtbe.com/watch?v=ytP2wzwhR_Y

The Stage Is Being Set For A Possible 3000 Point Drop In The Dow…

The Debt Ceiling Deadline Is October 17th, 2013 And Legatus Is October 8th Through The 17th…Coincidence?

(to watch on youtube: www.youtube.com/watch?v=dZwDHAovXEo)

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Hello everyone…

Red here… back from vacation!

Over the last month or so I’ve been quietly making money in the junior stock market and enjoying some much needed rest.  I’ve been eliminating all the stress of wondering what will the government do next to manipulate the big market by simply not playing it.  It’s too easy to make money in the junior and penny stock market that I just didn’t want to write other post on where I think they will take the S&P500 to next.  Why worry about it when you can make money in the junior market without sleepless nights.

If you read this blog in the hopes of finding that one secret golden piece of information that will allow you catch the exact top (and/or bottom) of the stock market so you can make a huge profit on the move down then you’ll love profiting from all the new junior stock picks I plan on putting out in the coming months.  I’ve been able to successfully align myself with the right connections where we spot this junior pennies just days before they explode higher!

I mean picks like PGSY that we discovered back on 8/30 at .02 cents just before it ran up to .07 for a 350% gain in only 5 days!  That’s HUGE!  I realize that this market might be new to you but not playing it with gains of 50%-100% are common place… and most moves only take a couple of days!  I’m in love this market market as it so easy to make money in it now.  The connections I’ve aligned myself with are able to spot practically every winner in advance of them exploding upwards.

You see, there are “tale-tell” signs that show up before hand and the pro-traders I’ve surrounded myself with in this market know EXACTLY what to look for to find every one of these winners.  Again, I’m not trying to sell on making money in the junior market instead of the big market, as if you are killing in there then congratulations.  But if you read this blog because you’re not making money regularly trading the nasdaq, s&p, russell, dow, etc… then YOU need to make a change!

Yes, yes, I’m going to give you an update on what I see in the big market in the coming weeks but I’m personally going to stick to trading these incredible junior picks I’m getting.  Think of it like this… we bears (that’s most who reads this blog) have been like small fish (maybe 1-2 feet long) swimming in the big bad ocean looking for food and trying not to get eaten from all the huge sharks around us (wall street market makers and manipulators), while I just escaped and found this nice quiet pond of water (the junior stock market) with nothing but small 1 inch minnows swimming in it just waiting to be eaten by a big fish like us!

If you align yourself with successful people and follow what they do then you’ll become successful too…

I’ve do just that in the past month by making the connections with other successful traders in this junior stock market, which is something very few will ever be lucky enough to achieve.  But you my dear reader are now one of the lucky ones as you will get access to all these HOT junior stock pick (some Nasdaq too) in my newsletter. So unless you have your own connections (like may Jim Cramer is your buddy) in the big market you’ll going to still be a small fish swimming in the big bad ocean of sharks… unless you decide to join me in my quiet little pond?

This coming month and many months afterward my partner and our connections will be finding many more new winners BEFORE they explode higher and we will be giving them all to YOU in the newsletter so you can become a WINNER too!  The coming bear market expected is something that is hugely positive for the junior stock market as traders flock to them in times of uncertainty… which is what I’m expecting in October and November of this year.  Of course next year appears to be worst… which is GREAT for the junior stock market!

If you’re not on my newsletter you’d better get on it asap as the coming turbulence in the S&P500 is going to make the junior stock market just that much better.  Kinda like the farmer restocking the pond with fresh new minnows!  Don’t get eaten by the sharks, come take it easy in the pond.  You can join here: http://reddragonleo.com/newsletter-sign-up

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The coming stock market crash…

So everyone is wondering if the stock market is still going to crash in October?  And the answer is… “define Crash?”  If by crash you mean a total collapse like in 1929 and what Lindsey Williams speaks of in his messages he gets from his elite sources, I’d so NO.  If you mean will it have a 2,000 or 3,000 point drop in the DOW, I’d say YES.

Based on what I’m seeing in the charts we have either already completed or will complete in the coming early days in October the very large Primary wave 3 up from the 1074.77 SPX low in late 2011, which sets up the stage for a Primary wave 4 down that only has to remain above that 1074.77 low of Primary wave 2 down to be a valid Primary wave 4… which is one hell of a drop!  I’m not expecting anything remotely close to tanking that far down but instead I’m simply looking for the gap up open from January 2nd, 2013 to be the target zone bottom.

That’s somewhere between 1420 and 1460 on the SPX, which is also about a 3,000 point move down on the DOW from the current high.  However, I’m not sure if the high is in yet or not?  Inside this large Primary wave 3 up we have 5 Major waves and we appear to have completed the 5 Major wave up at the recent 1729.86 high… but it’s possible that we still have a little more to go yet.

Naturally there are smaller waves inside the Major wave 5 up as well, which started at the 1627.47 low.  Since it’s a 5th wave it too will likely have a 5 wave pattern inside of it.  I currently can see a 5 wave pattern up from 1627.47 to 1729.86 which all makes up a the 5th Major wave up inside Primary Wave 3 up, which “if so” will complete that large wave and allow for a Primary Wave 4 down to start.

The timing of a huge wave down starting soon and the coincidental timing of the debt ceiling deadline… and the Legatus meeting is something bears need to be very aware of.  The charts only say we are about to see a Primary Wave 4 down start (which can easily be 3,000 DOW points) but add in the other events that happen to be timed out to occur with the topping of the Primary Wave 3 up and I’d say we have really great odds of a big move down coming this October.

As for a date…

It depends on whether or not we have topped at the recent 1729.86 high or not?  While I can count 5 waves up in this final Major Wave 5 from the start of it at 1627.47 there’s also the chance that those 5 smaller waves are just some type of A wave and the recent move down to Friday’s close at 1691.75 SPX wave a B wave down… all still inside that final Major Wave 5 up.  This leaves us a smaller C wave up yet to come inside Major Wave 5 up… and that should then complete Primary Wave 3 up from it’s start at 1074.77 in 2011.

So, if A = C then we can guess at the final high by adding the points moved up in the A wave to the coming expected low of the B wave (which I think we’ll see Monday October 30th, 2013).  And since that A wave started at 1627 and ended at 1729 we have about 102 points, which added to say around 1680 for a estimated low on Monday (for the B wave down still inside Major Wave 5 up) that puts our upside target for the C wave up around 1782 (102 points added to 1680).

Personally I think that’s too much to expect and I’d be more likely to believe that we’d have a shortened C wave that just barely goes above the 1729 high… maybe we get to 1750?  I just don’t see 1782 with the current debt ceiling news hanging over the market right now.  I guess if the news media comes out and says “all is well, we feel positive that we’ll reach an agreement before the October 17th deadline” then the market “could” relax and rally up that high.

But time is running out as October is coming upon us very fast now.  It just doesn’t look like they will have enough time left to produce another big wave up before that deadline date hits.  A shortened wave C up to complete Major Wave 5 up and Primary Wave 3 up seems more likely.  There’s a lot of “negative divergence” patterns showing up on different time frames in the various indicators (like the MACD’s, the Histogram Bars, etc…) which tells me we “could” already be topped?

If we are already topped…

Then we have started the first wave 1 down inside of Primary Wave 4 down.  This move looks about done with a little more downside possible on Monday before we can expect a wave 2 up to start.  If this is the case then by this coming Friday October the 4th I’d expect the wave 2 up to end and allow a wave 3 down to follow the next week.

This should be a tricky period as after a 5 wave pattern down happens it will have made up a likely Major Wave 1 down inside Primary Wave 4 down.  This means we could bounce up hard in an ABC Major Wave 2 up that could possibly come from a positive announcement on reaching some type of agreement about raising the debt ceiling or extending it into a future date.  So if we see that happen on the 17th I’d expect a rally until the 22nd with that date being a likely top for Major Wave 2 up because it’s a “double eleven” date… and you know how they like to use the power of Numerology in the market.

Think about that for a moment now.  If we are in a Primary Wave 4 down (that can go 3,000 DOW points down easily) and inside that large wave we complete a Major Wave 1 down (into the 17th for the positive news outcome regarding the debt ceiling) and further completing the Major Wave 2 up by the 22nd then we are looking at a Major Wave 3 down to start inside a Primary Wave 4 down.  That my friends should look like a crash wave!

This is again just speculating but it’s a strong possible count if we have already topped and they announce some positive news on October 17th about the debt ceiling issue.  You remember November of 2012 when the market sold off in front of the first time we experienced this debt ceiling issue and once it was raised we quickly bottomed at 1343 and rally hard into the rest of the year and into the first half of 2013.

We should expect the same to happen again once they actually announce the raising of the debt ceiling for the 2nd time.  But, it seems likely that they will play around for awhile and not make that agreement until after we have sold off into the 1420-1460 SPX zone to complete this expected Primary Wave 4 down.

The question is, how do to do it?

Delay, delay and delay is the answer I believe.  You tell the news that we politicians are working hard to resolve this issue and get a bill passed to raise the debt ceiling limit as soon as possible… but we don’t have a deal yet.  However, we are going to agree to extend it until late in November (again)… which tells the market to sell off until that period when they agree to raise the debt ceiling just like they knew they were going to do anyway.

It’s all just a dance timed out perfectly to allow the market to correct hard in a Primary Wave 4 down scaring the hell out of traders and getting every bear in the world on board short… which then allows them to squeeze the bears up into early 2014 for Primary Wave 5 that finally will end the entire bull rally from the 666 low in 2009… and further allow the real stock market crash to begin!

These are the possible moves that are likely coming in October and while I’m not sure with one or which way they will play out I do feel confident that a Primary Wave 4 down will start at some point this coming month.  It could already have started or we could have on more higher high still coming?  Regardless, we should still bounce some next week into Friday October 4th.  It will either end up being called wave C inside the final 5th wave up to complete Primary Wave 3 up, or it will be wave 2 up inside Major Wave 1 down inside Primary Wave 4 down.

Therefore, the logical thing to do is to watch and see how high the market bounces into the end of next week before shorting.  If they some how spin something the law makers say next week to sound like a deal on the debt ceiling will be made soon then the pressure will then let up on the market and we could see a decent move up.  I’m still NOT expecting a move to 1782 but a slightly higher high over 1729 is possible.  Of course it could fail to make it and fall just under 1729 and make either what we could call a double top area or some other Fibonacci retracement level that is 10-20 below 1729.

I would welcome a squeeze up to make a new high as that makes it easier to fall when it rolls over as the bears would have been stopped out.  But I can’t control what they decide to do with the market between now and October 17th, instead I’ll just be listening closely to their buzz words (as Lindsey Williams likes to call them) for clues.

We all know that they WILL raise the debt ceiling limit, but when is the question?  There will be mixed signals from law makers as the play the dance to move the market in the direction they want.  But come October 17th I’m NOT expecting them to say “we’ve decided to raise the limit”, but instead I am expecting them to state something positive to squeeze out the bears with a rally into the 22nd (this assume we make a 5 wave move down into the 17th to create Major Wave 1 down).

However, if they have not went down into the 17th in a Major Wave 1 but complete that wave the week or so prior, thereby rallying up with Major Wave 2 (inside it should be an ABC pattern of waves) and the topping out before the deadline date, they should say something negative like “we’ve not reached any agreement yet and will be setting up another deadline in late November”.

Naturally you can expect the markets’ reaction from a statement like that to be very negative, so we’d see that Major Wave 3 down inside Primary Wave 4 down start immediately!  Again, that would be your crash wave!  This all assumes the plan is to continue down some more to make the Major Wave 1 and then back up into the 17th for the Major Wave 2 completion.  This plan suggests the high for Primary Wave 3 up from 1074 is already in at 1729 and we have already started the first Major Wave 1 down inside Primary Wave 4 down.

The other scenario is that we still haven’t topped for Primary Wave 3 up and we are head to possibly 1750 SPX or so into the end of next week or even into early the following week.  Then as the days count down toward the October 17th deadline the market starts Major Wave 1 down inside Primary Wave 4 down as it waits for the announcement concerning the debt ceiling.

On that date the law makers decide to extend the limit for another month pushing the deadline into late November.  The market rallies from the relief of the news to make the Major Wave 2 up inside Primary Wave 4 down.  Then on October 22nd the market exhausts its’ rally and realizes that the debt ceiling issue still hasn’t be solved yet… and panic sets back in causing Major Wave 3 down inside Primary Wave 4 down to start.

Bata-a-bang Bata-a-Boom!

There you go…

Likely top for Major Wave 2 up inside Primary Wave 4 down should happen on either October 17th or the 22nd.  Then Major Wave 3 down starts inside Primary Wave 4… and that my friends the the wave down you want to ride!  It’s the surfers dream wave that happens once or twice in a lifetime (found during hurricanes and tsunamis… which coincidentally is the same thing it will feel like in the stock market I believe).

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Will the next market crash happen before or in mid-October?

… update from Ali

Hi folks!

I know it has been a quite while since I last posted on the blog, talking about the market plunge due in early August and such. Yes, actually my bad! You see I project most of the turning points but I really did a bad job projecting the crash. I knew for sure, the market would put in a top early August and it really did but that would not lead to a collapse or anything. You see, with a lot of people already being aware of August 2013 being a critical month, new energy was added to the market, changing the harmonics. On top of that, the Fed was also aware of the market being so close to the plunge so they did their best to hold it up through a lot of money printing. Then at that time the market was also traded by “Big Dogs” to attract as many buyers as they could.

The current situation is fooling everyone one now. You might think, no war with Syria, no war with Iran, positive GDP numbers and the stock market will go to the Moon but here are the real issues, the debt ceiling drama and budegt deficit crisis. You see, the drastic measures to avoid hitting the debt ceiling will probably be exhausted in mid-October and also the budget deficit will likely soon go all over the press.  In addition to the current economic issues, we also have a monsterous “New Moon “ coming on October 4th. Generally, October is going to be a difficult month for everyone and I suppose we are in for a rough couple of months.

Now I would like to turn your attention to the S&P500 weekly chart.

Weak attempt

As you see, I have plotted the 20-day moving average to indicate the moving support and resistance levesl. Not that I apply such method in my market analysis but I am simply doing this to indicate a very important support level at 1656 area on the weekly chart. You see, the prices will likely soon hit it, then bounce a little bit. I assume it will be a weak attemp to make a higher high. Whether the market is able to make a higher  high or not, the next attemp will be so weak. DO not let it fool you!  All you would want to do is to wait for a “set-up bar” to form, then short the market without hesitation.

May you profit handsomely,

Ali

Email: afiroozi (at) rocketmail (dot) com

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Red

P.S.  Another reason to expect a bounce is the goverment shutdown that happens (or doesn’t happen… which is what I think will happen) that is set for September the 30th at midnight.  That’s Monday of course and there is supposed to be a vote that occurs on it at 8pm EST tonight (Saturday the 28th) while I’m writing this post.  So kind of agreement should cause the market to rally.  Maybe it is announced later tonight or possibly Monday after the close?  Don’t know which but once it’s announced (and again, assuming it’s positive) we should rally from the government remaining open for some future extended time period.

References:

http://www.legatusmagazine.org/conferences/

http://www.reuters.com/article/2013/09/25/us-usa-fiscal-debt-idUSBRE98O0LU20130925

http://www.news10.net/rss/article/258858/2/The-government-shutdown-explained