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,






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,




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,


Email: info@divinechartpatterns.com



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:








      • thanks man..its fine if you actually give out to ppl who are interested..i think everyone interested should be able to see it..

  1. A pop on Tuesday for the usual Fed pop day. Just basing this on the analog to a past historical epoch for the Nasdaq (actually 2 different epochs—–and I’ve brought them up here ad infinitum).

    Dow is really outside/below its lower Bollinger Band so its due for a pop to get back to it but it looks like the Russell 2000 rode its lower band lower for a day back at that historical epoch before the pop (it’s in a similar position right now).

    And we’ve got the Grand Ritual Bowl next week in NYC but I don’t get the meaning of the the 2 teams involved in particular Seattle. Which means the ritual might already be in process. They celebrated the 12 th fan concept in Seattle last weekend ad nauseaum as expected even adorning the Space Needle with a 12 flag LOL and displaying a 12 on one of the buildings in the Seattle skyline. And the typical numbnut PEDHAWK fan thinks its about him.

    The NFL and the networks really did jump the shark with that Seattle -SF game last week but I will discuss that and the new mind-controlled mega-heel #25 of the PEDHAWKs (probably setting him up as a foil to the savior Popgun) later. (It actually isn’t anything new but his exposure just went mega-viral)

  2. I’m looking for a choppy day today, with a smaller wave 1 up and wave 2 down to happen. Then a smaller wave 3 up all day Tuesday, with the smaller wave 4 down and 5 up to happen before Bernanke speaks at 2:15 pm on Wednesday. This should make up a larger wave 2 up from the low on Friday and setup a larger wave 3 down to happen into the close and to the end of this week.

  3. The Nasdaq followed suit. Traded down to lower BB and below 50 day average only to finish the day above the 50 day average. 3 down days off the top. There should be a big pop tomorrow with Apple being the catalyst? I heard Apple was downgraded earlier on the day….just so happening before its earnings release after the close.

    • Same pattern that preceded those recent Fed decision meltup days. Makes lower low earlier in the session, rallies and then drops into the close but not making new intraday lows…..the formation of a A up B down, then C up???

  4. I can see one reason for Seattle making it to the Superbowl. It means that both teams will be original AFC teams which means that no matter who wins the Super Bowl, the stock market LOSES!!! The operators keep the Super Bowl indicator amazingly accurate. Of course, after the SB, I bet we get a contrarian rip off your face rally…..among other reasons.

    Seattle probably the only team in the NFC that is an original AFC team. I was expecting the operators to get San Francisco into the SB so that we could have an old fashioned 80’s (1987) themed NFC beatdown of the AFC with the Broncos playing their traditional 80’s role. I mean they even brought Elway back to the Bronco’s where he orginally played the role of Tebow’s stern daddy figure but now they can use him for the ’87 ritual. And boy does he look like an a-hole these days so the role is fitting.

    SF has a huge public backing so Vegas prospered with favorite Seattle winning but strangely Seattle opened as the favorite even though Denver with Popgun has a huge national following. Predictably the line has moved so that Denver is a favorite. But who benefits? I can’t imagine Popgun and his record-breaking 55 TDs has been propped up for this all these years to become a pick six machine in the Grand Ritual Bowl but then again it would give dramatic flair to the SB. Popgun has some interesting numerology in terms of years (37 years old) and weeks.

    Anyway, the PED Hawks are the only team that could get me root for Huckleberry Popgun, QB to the masses, with all of their DBs jacked up on roids including #25 whose so deformed from them that he looks like a vampire and makes the Legatian priest seem like Brad Pitt in comparison. Still I don’t think I can get myself to root for him.

    Parts of this message may self destruct in the future.

    Apple was hit hard in after hours but the Nasdaq has been recovering. The Nasdaq did open lower in the prior two instances.

    • Well, it appears the Seahawks spent their first year in the NFC West. (1976) But I still consider them an AFC team. They spent the majority of their history in the AFC. 1977-2001.

      They are owned by one of the Microsoft co-founders so are they representative of the tech bubble??? Apparently, the SF 49ers are the most bullish team based on the SuperBowl indicator so that maybe a reason for their failure against the PED Hawks.

      • Gold and gold stocks in particular have been following another historical epoch in the markets right down to the exact timeline. In another Friday during the third week of January, a certain group of indices topped and dropped down to their early year lows only to rally back to their Jan highs by early March. I don’t know if they can match that analog if a certain little ritual plays out in the meantime but gold and gold stocks are pretty beaten down already.

  5. Nasdaq didn’t pop like I expected today but it did put in an inside day. Unusual action for a fed day and the state of the union address day. Makes me worried that something in tonight’s speech might ignite things. I need to look at some data. A certain little component of a certain indicator was putting in a triple bottom low over the last few months and is bouncing today. Maybe there’s room for a bounce to the O area.

    • Geccko, we should rally tomorrow (at the open most likely) to produce some kind of smaller wave 3 up. The target is that 1810 SPX area. Then I’d expect the market to drop into a smaller wave 4 down into the FOMC meeting.

      Once it comes out I’d expect the “mis-direction” first move to be to the upside to quickly complete the wave 5 up and take out bears that put stops right above the 1810 area. Then I think we’ll rollover and sell off into Thursday. But I think we’ll stay above the current low of 1772 and close over 1784 for the end of the week.

      • Nasdaq version got to the same -66 area yesterday as it did back in 2000 but it did this after it’s flash crash, then rallied to the 0 line. Nasdaq futures are higher now but I wouldn’t be surprised if everything gets reversed tomorrow after a gap up higher…. by the Fed decision…..it is 1-29 after all.

        There should be a rally to 3550 $ndx…..then let’s see how things play out.

        Only thing is is a known misdirection artist is calling for the same scenario.

        Then Tom DeMark is calling for a break of SP 1752 following an upclose to say that a heavy decline has begun.

        • Yes, I think the level to short is the 1810-1815 area on the SPX… and I think we’ll see it near the open. It only makes sense to put in the high early in the day as I’m sure there will be some selling before the FOMC meeting at 2:15pm.

          And while I do expect a shakeout move to the upside right after the minutes of the meeting are announced it’s not worth taking that chance if we see the 1810-1815 area hit in the morning.

          Maybe the FOMC “shakeout” doesn’t happen and the market just drops from whatever Bernanke says (or doesn’t say?). Either way, the shorting zone should be in that area and waiting for a quick move up after the meeting is too risky to chance in my opinion.

          The break of the 1752 should happen as I could easily see 1700-1725 being hit. I don’t know if we will get it this week or not but I certainly think one should be short before Bernanke speaks.

  6. Hi Red, I am still lurking around here. I sent in my request for the update from Ali. No response yet.

  7. Long is the way to go! Looks like we came close to our 1810 SPX area after the bell yesterday as the futures soared up to 1800. Then this morning they dumped them and put in a higher low of 1768.50 ES. Clearly they didn’t want the bears to short at 1810 SPX area so they did the move overnight when they couldn’t take a position.

    I was expecting an A wave up from the 1772.95 SPX low a few days ago to hit the 1810 area, and the a larger wave 5 down to break that low. This current move up from 1772.95 looks like a wave 4 up and inside it we have a 3 or 5 wave pattern. The A wave up started yesterday and I think we are in the B wave down this morning.

    That leaves a C wave up to complete the larger wave 4 up, which I now suspect they will do after the FOMC meeting. Too many people are now expecting a big dump after Bernanke speaks so I’m thinking they will fool us all again and actually rally it up afterwards.

    So, at this point I think long is the way to go until that 1810 area is reached. Then we’ll see if that appears to be the end of the wave 4 up or if it gets extended into a 5 wave pattern instead of a 3 wave pattern. If it ends up “not” being an ABC wave up then everything changes and we could actually have completed the move down from the 1850 high to the 1772 low and are on our way back up to make a new high.

    Yeah, that sounds crazy with the charts looking so bearish but you know how they like to fool everyone. Then there’s the possibility that this move down this morning was truncated 5th down. That means the whole down move is over for at least a week. We could rip up much higher then everyone expects.

    This is a common practice by them to get everyone bearish and then squeeze them to new all time highs. While I’m not sure one way or the other on the new highs I firmly believe long is the way to go for awhile. Look to the 7th of next week before even thinking about shorting big again.

    • Let me also add that while I think “long” is the way to go right now I’d still exit around 1810 area to re-evaluate the charts again. I’m still not sure on this 5th wave down scenario? If completed then we rally for awhile… and by that I mean a week probably.

      If the 5th wave down isn’t finished then we should drop one more time from the 1810 area of resistance. This time it should break the current low of 1772 SPX and possibly hit 1750 area as previously suggested.

      This is a tricky area right now but I do believe they will rally up from the FOMC meeting. The question will be… “will it hold”? That I can’t answer yet. I will say that there is NO positive divergence yet in the short term charts. This implies another lower low yet to come… and then a rally all of next week.

        • It’s a tough call either way Seawind. Just a feeling more then anything that they will squeeze the bears after the FOMC meeting and rally up to that 1810 area. Most everyone seems bearish on that meeting so you have to think that they will do the opposite.

          Of course Thursday should then “also” do the opposite of what most traders will be thinking at the close today. So if Bernanke says something really positive then traders “should” be thinking that that selling is over with.

          That’s when you would drop the market one more time into a final 5th wave down to end the whole first larger wave 1 down from the 1850 high. Then you rally all of next week while all the traders have flipped to bearish again at the bottom of that 5th wave.

          These people are masters at tricking the sheep and that scenario makes the most sense to me… if I were a gangster like them.

  8. Since we have been selling off for a week now in front of the announcement of the Fed tapering another $10 Billion (which they just did with the FOMC minutes being released) you have to ask yourself if we have “sold the rumor and will buy the news” just like they do with stocks?

    You know they love to “buy the rumor” (of expected good earnings) on some stock a week or so before they announce them. Then once they turn out to be good (as expected) they “sell the news”. Only this time I think the opposite is happening and we are about to start a rally up to at least that 1810 area for starters. They are holding the market up right now above the Monday low of 1772 SPX and that’s a “tell-tale” sign that they are luring in bears before a squeeze.

  9. The operators are good. They had me fooled. Of course, I thought there would be a Fed statement today which I didn’t find out about until just before the open. I was so worried about their usual Fed release shenanigans. That’s ok. Everythings back on the timeline which wouldn’t have been the case if there was a rally today.

    Russell 2000 did what the Nasdaq should have done yesterday.

    Nasdaq version of a certain component rallied to -36 back in 2000 on its equivalent day from that year. Yesterday, it popped to -41….

    • I am still leaning bullish for the short term, but if they lose 1770 SPX by the close today the market will drop like a rock. But if they hold the line they should bounce for several days. The weekly chart needs to hold 1768 by the close on Friday. So if they are going to stay above that they better not let it collapse here. This is the line in the sand Geccko… lose it and the bears win!

  10. After perusing the chatter on the blogosphere, it seems that the posters—-errr–the bears—-errr—the trolls have universally gotten out of their shorts today. Everyone is looking for a rally apparently over the next two days including the best tell, astro-energy dude.

    MMM reports before the bell. Its earnings might provoke a nice reaction. Fellow Dow stalwart, Boeing, got taken apart today. Interesting that I haven’t seen anyone mention MMM but I see a flood of calls on QCOM and FB.

    It won’t take much to get the Dow and SP below its December lows. The retail stocks have already dropped below their December lows. Once that gets taken out, a waterfall decline should unfold quite quickly. I don’t know where DeMark gets SP 1752 as his trigger, the December lows should be a pretty simple waypoint.

    The European markets had the sweetest looking reversals today ala a similar time double 6 years ago although they finished off their lows. The Nikkei currently is putting in an impressive reversal as well.

    As for the 2000 model, the Nasdaq and Russell 2000 both closed below their 50 day averages and lower BBs just as they did back then. A certain component of a certain little indicator also finished in a similar position.

    • Well, in 2 instances I looked at the markets actually rallied presumably from the open and in the 2000 case up to the lower BB so maybe no monster MMM miss. (attempt at a reverse jinx). Tomorrow===1-30-14 or 27???

  11. $ndx got to its 3550 target that I was looking for 2 days ago basically. Went up and hit its now declining 20 day ema—RSI 14 hit the 50 level just as it did back in a certain historical epoch.

    Boeing continued to get hammered and its chart looks just plain ugly. MMM was down as well. Euro and gold both were hammered.

    Now let’s see if we can get to DeMark’s target of 1752 off an upclose. Need to check out comments from the blogoshphere. One dude who so far has been right but nevertheless I am suspicious of had us rallying on Friday.

    • The charts say we rally in the morning on Friday but could easily drop back lower into the afternoon. However, with Google tanking afterhours and taking the Nasdaq down with it we might not go up tomorrow at all? Too hard to tell right now? They could reset the short term futures charts afterhours and turn them back up by the morning.

      • We might levitate tomorrow, as they like a green market for the weekend shows, WE HAVE SUPERBALL!!! but next week will there be enough earnings and will there be no bad news out of emerging markets to keep us up? That’s to be seen.

  12. We have a possible wave 3 (or C?) up from the low today… which means we “could” go green by the end of the day and really climb higher then many will expect. It’s very possible, but of course not something I can say will happen today. Could be pushed out until Monday?

    • hey Red, That doesn’t make sense.

      If we break above the 50 day MA..this market will surely break new highs.

      Recent price action is a 5 day wide bear flag. Weekly charts are bearish – for the second week in a row..first time since Nov’2012.

      If we break <1767 next week,..we'll drop hard to 1710/1690….then we'll know 1850 was a key intermediate 3' top.

      regardless..have a good weekend!

  13. I am moving my target for a low out to Tuesday or Wednesday. Everything is muddled at this point. Not really oversold but also don’t like seeing inside day red bars for a lot of indices on mildly negative breadth. A lot of hollow candlesticks as well. But then again indices were held up on monster earnings pops from Goog and CMG and I doubt we have any pre-opening earnings releases like that on Monday morning.

    I had a low for today because it was the first day after a new moon which has seen a first wave bottom in 3 instances for 3 historical epochs. It still might produce a bottom. Plus we would finish the month down and there would be endless chatter about the January barometer. Plus the start of Yellen’s new term. And a possibly negative Superbowl indicator triggering. All the ingredients in place for a rip roaring in your face contrarian start of the new month rally.

    Except the market did not achieve the ideal configuration for a first wave bottom. No final washout to get the pundits in a hysteria and blather endlessly about the January barometer. In a certain historical epoch that the Dow is following quite impressively, the low came in place within the first 3 trading days of the new month. The Dow also did close below its December lows ever so slightly. The $vix looks bullish and is still making new highs. And the euro looks like it’s in a complete freefall at the moment.

    • Hmmm, might have gotten an HO signal…..or observation???? 68 new highs and 80 new lows for $nyse according SC. That’s right around the threshold for a signal.

  14. Just a little tidbit of my Superbowl preview:

    Denver was a Superbowl participant in the two Superbowls surrounding the event of 1987 ie the lesser grand ritual and they were destroyed both times 39-20 by the New York Giants in January 1987 and 42-10 by the Washington Redskins in January 1988. They were led by QB #7 who returned to the team a few years ago in some sort of executive capacity where he functions as the de facto team leader.

    It is worth noting that the 1987 champion New York Giants might not be playing in this year’s Superbowl but their spirit will be there.
    They were also champs in 2008, 2 years ago, following the Superbowl won by the 1929 champion Green Bay Packers. They also lost to last year’s champion Baltimore Ravens in the 2001 SB, 34-7, the culmination of the 2000 tech bubble bursting season and in the midst of the tech meltdown on January 29,2001.

    In an interesting coincidence, both of this year’s SB participants, the Denver Broncos and the Seattle Seahawks played the Giants during the year and both played at their stadium in New Jersey(the Meadowlands). Both teams defeated the Giants. The Giant’s QB is Popgun’s brother. He has won 2 SBs to Popgun’s 1.

  15. Superbowl Preview part deux:

    The betting line on the SB seems like a trap line. The Broncos, led by Popgun and his record-breaking 55 TDsd, the highest scoring offense of all time, and with an average large margin of victory are only favored by 2.5 pts and this after Seattle opened as a slight favorite. One would think the betting public would jump all over this line considering the popularity of Huckleberry Popgun, the QB of the people with a net worth of somewhere around $200 million, and his endless hype and gazillion commercials. The public likes to bet on favorites and marquee teams led by marquis players. Considering that Denver has only won one game by 7 points or less all year so the line really doesn’t make any sense unless Seattle is truly the better team which will be brought up in SB preview part deux deux.

    So on the theory that the operators should benefit the most out of any outcome then Seattle should win the game but they should also win it dramatically to keep up with the 1987/88 SB similarities.

    Then there is the recent case of SB 45 when the Patriots came in led by Tom Brady and his record breaking stats with the highest scoring team of all time only to lose to the 1987 champ Giants.

  16. It was mentioned a few days ago that Seattle with the NFL’s top ranked defense finished first in scoring defense, turnvovers/(margin), and yardage allowed, the first team to do it since the 1985 champion Chicago Bears, widely considered the top defense of all time and a team that crushed the AFC champion in the Superbowl. The next year another team with a smothering defense the New York Giants pummeled the Broncos in the 1987 SB.

    And here’s how some of the similarities to this season compare to the season leading up to the 87 and 88 SBs. Denver, the AFC champion feasted on teams from the inferior AFC and the NFC LEAST. Seattle slugged its way through the much superior NFC and materialized as the NFC champion. They played in a division that featured 3 teams with a winning record and a fourth one that finished 7-9.

    Denver had a similar bend but dont break style defense to its 80s counterpart. They gave up 24 pts a game during the season that was masked by Denver’s high octane offense. They dropped that total to 17 pts in the playoffs but they played some weak playoff teams and those games were at home. The Patriots in particular had a very depleted squad with their best offensive and defensive players already out for the season. The Denver squad of 86-87 did lead the AFC in scoring points allowed but no one compared them to the Bears, Giants juggernaut squads of the time.

    This year’s Seattle squad also had a ridiculous low yards per pass attempt allowed which is probably the most vital defensive statistic in this pass happy era. It doesn’t help that their DBs are so jacked up that they’re like linebackers roaming around in the secondary and they play an aggressive bump and run type coverage that they almost dare the refs to throw flags. But considering there have been only 7 pass interference calls made in the playoffs, their aggressive tendency doesn’t seem to be in any jeopardy from the refs.

    Bill Polian mentioned 5 metrics for a SB champion that favored the Seahawks over the Broncos.

    Among them were rushing attempts on the season, turnover margin, and ypa allowed (mentioned above but that might have been a 6th metric).

    And historically the team with the NFL top ranked defense in the SB has generally won the SB.
    This was the case in the 1990 SB when the top ranked defense of the Giants squared up against the high octane offense of the Buffalo Bills and defeated the Bills 15-13. The Bills were coming off putting 50 pts in the AFC championship game and 40 pts a week earlier.

  17. It’s pretty simple here now… either we rally into this coming Friday the 7th and put in a lower high around 1810 area or we continue down in the 7th and put in a bottom. If we continue down then the Legatus meeting will be a turn to the upside with a new rally starting which should continue into July.

    If we start climbing back up tomorrow and tag 1810 area then that would setup a massive wave C down starting next Monday and continuing for 3 weeks or more. I don’t know which one is going to happen as today went deeper then I expected. It’s a toss of a coin at this point.

  18. I’m thinking now that based on the charts we should rally into mid to late next week. This implies that we almost (or are?) finished with the first larger Wave 1 down from the 1850 high and will soon be starting the larger Wave 2 up.

    Since the Wave 1 down took about 3 weeks we should have around one week up for the Wave 2… which should be choppy and look like some type of ABC pattern when finished. This pushes out the 7th as a likely top and moves it to next week sometime.

    If this is correct they must squeeze out the bears in this wave 2 up and that means they must go above 1800 SPX. I don’t know how high or what date we will top but next week is the more likely time period to try to get short before the larger Wave 3 down starts.

    Of course is all off the table if we make a new high above 1850, but from a technical stand point the damage that has been done doesn’t support that theory. Whatever the upside target is next week I think it’s a HUGE shorting opportunity.

    I’m actually praying this doesn’t happen but it’s really looking bad on the charts right now. And with the Fed pulling out money from the market twice since late last year it doesn’t look like this one is going to be another “Bear Fake-out” like in the past.

    We have been given the “approximate” date and road map so we really must take this one very serious this time. Past Legatus meeting have had “turns” in the market either during the meeting or shortly after the meeting. This time I think it will be shortly after the meeting as that makes more sense with the charts.

    Throw in the fact that the free money supply of $85 Billion has been reduced to $65 Billion with the last two $10 Billion Dollar cuts and it all spells disaster!

  19. I’m going to low my upside target bounce to around the 1770-1780 area as we’ve yet to find a short term bottom and bounce. Based on what I’m now see I’m expecting the rally to start tomorrow or Friday, but it should only be a small choppy A wave up and B wave down (to put in a higher low).

    Then the C wave up should happen Monday and end Tuesday morning somewhere in the 1770-1780 SPX zone. Therefore I believe Tuesday the 11th will be the top of a very short lived wave 2 up with the entire move from 1850 down to the current low being the wave 1 down.

    If so, then Tuesday should be the best spot to short before the crash wave 3 down starts. I guess it could start this Friday the 7th but there is usually one quick wave up to shake out a few bears and get some bulls long. It should be fast and up hard, but end just as quickly.

    Possibly Obama says something positive over the weekend to spark this strong bounce? Since a lot of bears will hold their shorts over the weekend I’d think there would be head fake move up before the crash. I’m counting today’s move down as a smaller 5th wave down inside a medium 5th wave down (that started at the 1798 high), inside a larger wave 1 down from the 1850 high.

    The downside target is the 1725-1730 area to end this final smaller 5th wave down, and medium 5th wave down and larger wave 1 down. So, the entire wave 1 should end in that zone and allow for a larger wave 2 up.

    This larger wave 2 up really shouldn’t last more then 2-3 days even though the larger wave 1 down lasted over 3 weeks. If we were still in a bullish phase then the wave 2 up could last over a week, but since we are in a bearish phase now any rally will be shorted hard.

    This coming crash wave is going to scare a lot of people and I’m sure I’ll be one of them. I just have to keep focused and remember that my downside target low should hit in about 3 weeks, which is around the end of February. So by the 28th I’d look to sell. My target is around 1500 area on the SPX.

  20. I’m going to move my target for a low to Friday. This is about where the 377 year cycle should kick in.

    We haven’t gotten the washout I’ve been expecting and certain indicators are still muddling back and forth in negative territory but not really oversold yet. A certain component of a certain indicator reversed back down today while the indicator finally dropped below its 50 day average. The Nasdaq version is actually even more negative in both indicators.

    There’s a lot going on overseas overnight tonight (actually early morning) and it is 3 years 9 months from a certain event.(1372 days) 31 weeks from July 4 as well. And the final washout from a certain analog to a certain historical epoch did occur on the Thursday Friday of the first week of the new month.

    I’ve been reading some recaps of Tom DeMark’s remarks today and he is incorrect on his trading day count. Today is 24 TDs. He seems to be indicating that a decline over the next two days would bring on the watershed event. I disagree. I see next week as super bullish as the new Fed chairman will be conducting some important speeches in D.C. which should be greeted by the standard meltups in the markets.

  21. I still think there needs to be a final washout. Trading day wise the market was due for a bottom at 23 tds but the correction was really too shallow at just under -6% to really be a bottom. Yellen doesn’t speak until Tuesday so there is room for 2 days down.

    I am getting some contra trollish indications that there will be a decline tomorrow. I guess DeMark is the new Prechter. Throw him on to CNBC (and explain the double ninen analog) just prior to juicing the markets. Well the analog comparison is toast so the operators can now open the trap door.

    It is 2-7 tomorrow and guess what happened on this date 85 years ago???

    • It’s James Deen’s 28th birthday tomorrow, star of the Canyons, my 2nd or 3rd best film of the year. Lindsay Lohan is 27 years 7months5days old tomorrow.

      My top film of the year: Rush followed by The Canyons and Hunger Games.

      Rush: The German Grand Prix of August 1, 1976 depicted in the film was 13,703 days ago tomorrow.

  22. I think we are going to tag that 1775-1780 spx area tomorrow and the drop on Monday… but I think it will only be a B wave down with today’s move starting the A wave up. Then probably a C wave up on Tuesday to complete the entire wave 2 up. Could hit 1800-1810 area on the 11th-12th before rolling back down again.

  23. Considering how high we have went today I’ll be looking to go short over the weekend. We have completed a 5 wave pattern up from the 1737 low and could just be in the first A wave of a larger ABC pattern inside wave 2 up.

    This would imply that we drop Monday into a B wave down that puts in a higher low (maybe 1750-1760?) and then rally back up to 1800-1810 for the final C wave inside a larger wave 2 up.

    However, if that’s not the pattern and then it’s possible we have completed the larger wave 2 up with just 5 smaller waves inside it, instead of an ABC pattern.

    Therefore, picking a spot sometime today to short seems wise as we have high odds of either a higher low happening on Monday from a B wave down, or a break of the current low and the start of the crash wave 3 down. Either way if you are short you can catch a nice move down.

    If it’s just a B wave down then you can exit the short sometime Monday and even go long the C wave up too? Then short again from a higher level for the start of the larger wave 3 down. And of course if this is all we get on the upside then the move down next week should be really ugly as will likely be the start of the larger wave 3 down.

      • Based on today’s strong move up this could easily continue into Tuesday the 11th of next week. While we should pull back slightly on Monday I wouldn’t expect much on the downside that day. Then back up again into Tuesday seems likely.

        From there we’ll have to re-evaluate everything to see if Legatus was a bottom (it started on the 6th) or a top (as we are in the middle of it now)? The charts look very bullish on the short term and move upside seems likely early next week. Only some unknown shock could take the market down hard on Monday, and I have no way of seeing what that is?

  24. On Friday we had a very strong rally and while it looks on the charts to be very bullish with a bottom now being put in I don’t think we are done yet on the downside. It’s still too early to tell if we are going to go back down and breakdown through the 1737 low or hold above it with a higher low, but we certainly should be turning back down again.

    I’m looking for another 5-10 points more on the upside before we rollover and start the next move down. That’s somewhere between 1803-1808 SPX, which should hit on Monday (or Tuesday if we drop back 5-10 points Monday forming a bull flag into the 11th).

    There is a possible “inverted head and shoulders” pattern in the making if we go down and put in a higher low (maybe in the 1760-1770 as shown in this chart: http://stockcharts.com/public/1092905/chartbook/214659881;). But, do note that the market is still in an “intermediate” term bearish mode and about to end the “short term” bullish mode.

    While the “long term” mode is still bullish that shouldn’t start until early March. This means we should be heading down the rest of this month and be lower then the 1737 current low. This “implies” that the “right shoulder” might not play out and instead we start down in a nasty wave 3 (or C?) with the up move from the 1737 low being the wave 2 (or B?) up.

    So I wouldn’t get too wild about going long in the 1760-1770 area thinking it’s just a pullback before a new rally up much higher starts as that might not be the case. The charts just don’t support it yet. After another new low is put in the weekly charts should bottom out and allow a new rally to start, but I don’t think we are there yet.

    But for now let’s just take one day at a time and look for that slightly higher move up of 5-10 points to get short and see how far down it takes us? We (us Bears) could be pleasantly surprised when it continues down past the target zone of the right shoulder and keeps on falling?

  25. I thought that we would have saved some of the pop for the Yellen speech on Tuesday but the SP has already done a 57.5% retrace which is what would have expected for the entire pop based on one historical analog. Euro and the Australian dollar have already rallied hard in particular the Aussie (going into its rate meeting last week). A certain component of a certain indicator has also rallied into positive territory but its Nasdaq version surprisingly is still in negative territory.

    I looked back at the first decline in October 2007 and the first pop looks quite the same as the current snapback. On October 31st, a certain little component of a certain indicator rallied to the same spot as it currently stands at right now. The market topped that day and dropped 40 SP points the next day. Too many are talking up the double ninen analog which has me worried. I probably can’t get a good feel until Wednesday or Thursday……if we decline into Wed. on some pessimism then maybe the Thursday Yellen speech can induce a dramatic rally. But Tuesday will be 12 years 5 months from a certain little event and then Wed. is the 205th birthday of the 16th president so I would tread cautiously around those dates although the market currently isn’t in precarious condition but it could get there quickly.

    The Dow, retail stocks, and emerging markets have underperformed on this rally which is another red flag although I suppose they could play catchup but that would imply the Nadaq probably making new highs.

  26. Janet Yellen (the new Fed Chairman) speaks Tuesday at 10am, and it’s a double eleven day… hmmm? http://federalreserve.gov/whatsnext.htm

    Do you think we’ll pop and drop from something she says? I certainly do! As I discussed in the new video I did yesterday we should make a small wave 4 today (and we are) and then pop up tomorrow for a small wave 5 up and hit the 1803-1808 area to clear out the overhead stops… then we drop!

  27. Is it just me or is this choppy sideways action that’s forming a perfect bull flag just a little too obvious? While there should be bears’ stops sitting just above 1798 SPX they’ve had all day to close them up now. What if there’s not hardly any left as they could have switched to bulls and went long assuming the bull flag means a guaranteed breakthrough to 1800 and more?

    While I still think we will breakthrough I’m a little concerned about how high they will go up? If there is a lot of bears’ stops overhead then they could easily squeeze them to 1816-1826 area. But if there’s hardly none then we could just barely clear the area and drop back hard the rest of the day.

    Let’s also pay attention to the time that Janet Yellen is speaking tomorrow as that could indicate how high we go? The later in the day it is the higher it should go I think as more time equals more bears to squeeze. But, she’s speaking at 10am… which is right near the open. If she says something positive (like what… she’s going to reverse what Bernanke did and put back the $20B he withdrew?), then we could rally to the higher zone all day.

    I just don’t see that happening though, which tells me we are going to get a slight pop high when she speaks and then head down the rest of the week with a target zone of 1640-1650 by the end of the month.

    So if you are waiting to short just be fast on the trigger as you might not get much more upside and time then early tomorrow morning.

    • Down move seems right, your target for the time frame just sounds a little too extreme. Maybe by March sometime. However, for gamblers, if we pop tomorrow, those 2/28 170puts will likely be .25 or less. so 20x your money

  28. I would wait until 1770 is breached for confirmation Keep in mind the day we put in the current high was not an important day Red.And we’ve been hugging the 1800 level for awhile. Think about it this way, If yellen says something to drop the Market, every vear and then some, will go heavy short. However, if the H&S plays out with a bullish bias, we could make a new high around the 20th.. Another double 11, and more fitting day to put a high in on/ Plus. at that point, I don’t know what bear would be left. This is my take. Or a lowert high wouldmake more sense. Maybe 1820/30 area for a final squeeze,

    • That’s too far out for a turn to be accurate with Legatus. Either we bottomed at the meeting just one day before it started on the 5th (the meeting was the 6th-8th) or we top today just 2 trading days after the meeting ends.

      If we bottomed then we should be going up for several months and make new all times highs. If we top today then we must break the low. While Legatus isn’t accurate 100% of the time on turns it’s above 70% from my research. So the question is… will it be a bottom or a top this time, or just a failure to produce an important turn?

    • today was manipulation plain as day. Everything she said would have tanked a market operating under free will. Of course she has no intention of actually tapering the taper, her blathering was necessary to setup the market going into free fall so then she can be the great savior later down the road when she keeps the welfare program afloat and the market goes up again, but meanwhile the insiders will grab a large chunk of wealth on the downside. Today was just needed to shake out the last of the bears (sheeple class) so hopefully some of us went short!

  29. Chop, chop, chop, chop… when will the tree fall down? Thursday maybe? How about Friday? Or will it be next week? A weekly close below 1788 area is all the bears need to take down the bulls. Some how I think we will stay above that level this week and leave us guessing for next week. But in the next day or so I do expect some selling.

  30. Market crash canceled. Main Stream Media is putting out stories about the 1929 crash and chart comparisons, and since they always mis-lead the sheep in the wrong direction we have to now start looking for bullish setups.


    So any down moves will be done to work off overbought short term charts and we should then resume the up move. Truly said how well they can manipulate the charts (and the sheep), but unless we have changed some how and the truth is now allowed in the main stream media I’ll have to continue to assume that every story is still put out to mis-direct us.

  31. That’s why I don’t stress shorts as much anymore. It’s not worth it. Bull runs are much slowe, and last much longer. Making them A lot more cinsistently profitable

  32. Most bears, who don’t hedge well, have long lost all thier money by now and we still grind higher By the time they actually win, the reward will likely be mch smaller then what they have lost

  33. The next important ritual date is this Thursday the 20th… so possibly we see an important top on that day and a nice down move to start right afterwards. Since we are so close to a new high I’m going with the assumption that we will get one. However, it’s normal to expect a pullback first before a breakout so possibly we fall back first and then push through?

    Meaning that “maybe” we run up and hit the 1850 area of resistance Tuesday and then pullback 10-20 points? Then recapture the level and break through it by 20-30 more points to lure in the last bull? Then I’d expect an important top and a reverse to the downside to start.

  34. The market looks a little tired here gang. We could have a pullback to reset the short term charts from the their overbought conditions here in a day or so. Then I’d expect another move higher to breakthrough the 1850 high, but it probably won’t happen until next week.

    This move down and then back up should create a negative divergence on the charts, which is needed for the final high to happen from this big move up from the low last week on the 5th. After the high happens next week I think we could then (finally) see some decent selling happen.

  35. The Nasdaq tried to break out above 4290 but it failed. I am expecting a 3-5% down. Same for the SnP failed to break 1850 for a close.

  36. I’m kinda expecting this chop to last another week as they frustrate both the bulls and the bears. I could look similar to the month of July 2013 when the stayed in the 1700 area for several weeks and then popup up to 1709 to clear out overhead stops.

    Then they fell back down to the 1700 area chop zone and stayed another week before dropping for a 5.7% correction. This time we are looking for larger correction so the final exhaustion move up should be in the 20 to 30 point range over the current 1850 chop zone.

    It could look more like the May 22nd move up with put in the long topping tail and then quickly dropped to start a 7.5% correction. The main difference between that period and the July period is how high they went with the exhaustion move up and how quick they fell.

    My minimum exhaustion move up area is 1870 zone and maximum is 1890 zone, and I’m expecting it to happen in the first week of March or the second week… possibly another “11” day like March the 11th or the 10th as they are both 11’s. However, the 11th is a double eleven and the 10th is only a single eleven.

    That May 22nd date was a double eleven and produced the exhaustion move up, so I’m leaning toward March 11th which March 10th my second guess. This means we should chop around all next week teasing the bears and the bulls. We should see any major breakdown or breakthrough.

    Of course if we rally up to the 1870 or 1890 area before either of those dates then I’d re-evaluate the charts at that point. If it does come early I’d still be looking for a nice long topping tail to form on the daily chart candle pattern like the one we see on May 22nd of 2013.

    My theory is that the deep the correction the more likely to have a bigger “exhaustion” move up on the last day to clear out every last bear that put stops above the 1850 zone. This recent pop up to 1858 doesn’t seem to me high enough in my opinion.

    Then there is the fact that the MACD’s were up in the 20-25 area at the May 22nd high and the July high showed a reading of 15-20 before it topped and rolled over. Right now we are in the 5-10 range on the MACD’s on the daily chart and need about one more week to let them go up higher into the same range as those 2 prior highs.

    Naturally it won’t be exactly the same as either prior date but we should still look for choppy action with fakeout moves up and down until the final flushout move up happens.

  37. Today is 28 Trading Days Later from the SP mid January closing high, an important td turning point seen in some of the historical market epochs. Dow is still following the double ninen episode structurally but has deviated in the timeline. It popped up to its early January lows which have since provided resistance over the last few days.

    It looks like JAZZ and the biotech sector got things started today to the downside.

  38. Just to give everyone an update: We now know that Legatus was a bottom and not a top. It was hard too tell since it happened on the 5th, just one day ahead of the 3 day meeting from the 6th to the 8th. We could have also rallied up and topped on the 11th, just 2 trading days after the meeting… but we didn’t.

    Moving forward we have since put in a new high which means the Primary Wave 3 up from the 10/04/2011 low is still in play. Breaking that down to smaller waves and I believe we are in a final 5th wave up from the recent low on the 5th of February. Inside of that 5th wave we have smaller waves and currently I think we are in a smaller wave 4th down today.

    That leaves a final smaller wave 5th up, inside a little larger wave 5th up, inside a Primary Wave 3 up still yet to come. The target zone is 1870 area for a shorten wave 5th and 1890 area if it extends.

    Then I’m expect Primary Wave 4 down to start with a projected low around the topping zone from the 2000 and 2007 peak highs… with is basically around the 1550-1600 SPX area.

    The Primary Wave 2 down lasted around 5 months from May 2011 to late September early October of 2011. But since this market is “contracting” and not “expanding” (like the 1987 low to the 2000 high) I’d expect the time period to be much less.

    Ali speaks in his posts about the “harmonic’s” of waves and while he nor I can be perfectly accurate in dates, level’s and wave counts I do believe his studies about harmonic wave cycles are correct.

    Put simply, Ali bases his analysis on each wave up and down getting shorter in time as the whole market is in a “contracting” stage now. That implies that this coming Primary Wave 4 down will be much quicker to happen then the Primary Wave 2 down did.

    I’d estimate it to end within 2 to 2 1/2 months versus the time needed for Primary Wave 2 to bottom and end. And therefore the following Primary Wave 5 up will also be shorten in time as well, not lasting 2 years like Primary Wave 1 did.

    Considering the fact that Lindsey Williams said that the Obamacare Euthanize System isn’t going into full enforcement until 2015 and that they won’t collapse the entire banking system until after it’s in effect I have to think that in order for them to first steal the money from everyone’s 401k pension funds and do the “Global Currency Reset” (GCR) that they MUST crash the stock market before 2015.

    Why you ask? History shows that the last time they did a GCR was at the bottom of the 1929 stock market crash, which was in 1932/33 time period. How else can you get away with robbing the sheep? You must first scare them into believing that they must be robbed in order to save themselves, and that implies a HUGE panic.

    So this poses the question… how do you steal their money with a GCR before you collapse the entire banking system? The only way I can see that happening is with another stock market crash, which means we need to so how complete the Primary Wave 4 down and Primary Wave 5 up this year… and allow enough time to crash from that final high too!

    Yeah… sounds impossible to me, as when you look at how long the Primary Wave 1 up lasted you think we should have a similar time period for Primary Wave 5 up. But let’s examine other facts we have, like the fact that QE1 was fueling the first Primary Wave 1 up and now we have the current QE program being slowly removed.

    In fact, the last comments from the Fed’s indicated that they “could” be raising interest rates in 2015, which means ALL of the current QE money must first be exited out of the market. And that means to me that there will be no one but the retail sheep buying up the market when Primary Wave 5 is in full play.

    Sure, the institutions will be buying the start of Primary Wave 5 when Primary Wave 4 bottoms. But the retail sheep will be buying it at the topping area between 2000 and 2200 SPX. But this time there won’t be any Fed money to support the market. So the first correction that happens won’t be supported by the institutions.

    Since they know that the free money will be almost gone by then (and will be completely gone soon thereafter) I fully expect them to just be in FULL ON sell mode. They know that an interest rate hike is likely to happen in 2015 and when you add that to the free money being exited out of the market I just can’t see any reason for them to buy the market anymore.

    I’d guess that they will be moving into gold and sliver at that time as they will see the writing on the wall and know what’s happening. Of course I’m not implying that anyone should buy gold or silver now as I can’t say if it’s bottomed or not? But certainly I’d expect the big institutions to be moving into gold when the stock market tops out and/or starts crashing.

    My charts don’t go back before 1928 so there’s no way to compare the period back then to see if the Primary Wave 5 up lasted a “much shorter” time then the Primary Wave 1 did. And I just can’t believe that they could do a Primary Wave 5 up from around May of this year and end it in September or October to allow time for the crash to happen before 2015… but never the less this is something that is possible with the information I’ve seen.

    If it wasn’t for the QE program being withdrawn and the hint of interest rates increasing in 2015… and the talk of them collapsing the entire bank system after Obamacare goes into full effect (according to Lindsey Williams) I would have speculated that they would extend Primary Wave 5 up until 2016/2017, and top out in the Dow 30,000 area.

    But that doesn’t seem possible at the present time with that information. Sure, Lindsey Williams could have been given bad information but the facts about the QE being withdrawn and possible interest rate hikes came right from the Fed’s themselves. That information is about as accurate as we sheep will ever get.

    The only thing that could change the timeline now is if the Fed’s decided to cancel the withdraw of the QE and not raise interest rates… which is possible I guess. Then we could extend the Primary Wave 5 up out until late 2016 or early 2017. But right now it’s looking like they plan to “magically” complete both Primary Wave 4 down and Primary Wave 5 up this year… and then start the crash near the end of 2014 or early 2015.

    For now though let’s just focus on the short term as Primary 5 up could last 4-5 months or another 2 years, it’s not possible to figure out right now. But Primary 4 down is going to start soon I believe and it should be a little easier to follow.

    With the nice pullback today, which should continue some into tomorrow, we will successfully put in the negative divergence I’m looking for on the daily chart once this move bottoms and we turn back up into the rest of this week and possibly early next week.

    Monday the 10th seems like a good topping date, but let’s just let it play out the way it wants. First we need to see this selling hold in the 1830 (or higher) zone and then turn back up. So far I count 4 waves with one more wave 5 down still to come. That could happen later today or early Tuesday. Then I think we start the move back up.

  39. In tribute to last night’s Academy Awards and its big winner, let’s harken back to a notorious moment from the celebrated sci-fi flick of last year.

    Today is March 3rd, which was when Mardi Gras took place in 1987, a date that held some GRAVITY for George Clooney. Clooney regaled the audience and Sandra Bullock on how he ventured down to New Orleans at this time, just as things started to go haywire in the flick and space debris was sent hurtling towards the space mission’s location. Tomorrow, 3-4 will be Mardi Gras in 2014. And it should be noted it was the RUSSIANS who shot down their own satellite that set things in motion for the catastrophic events that were to transpire. Another case of life imitating art in the operators’ MATRIX?

    Then there is the case of last year’s Superbowl (not the 1987 redux Popgun fest from a few weeks ago….but the PEDHAWKS did put up 43 pts on the 1987 Superbowl losing Broncos) that ended in a 34-31 final score highlighted by a 34 minute delay when the power shut off in the New Orleans Superdome. It’s hard to believe the big event is set for tomorrow considering it takes an x-amount of days off a secondary high before denouement is achieved. But something is hidden in that number.

    Gravity didn’t have the greatest story so it didn’t deserve the BEST PICTURE award but then none of those films did but based on its technical achievements ie cinematography, visual/ sound effects, music it might have been the most astounding cinematic experience of 2013. (Rush still might have it beat on those measureables though)

    Haven’t seen 12 YEARS A SLAVE, but based on the clips I have seen it does look a bit didactic although watchable. Probably got the award based on the numerology in the title more so than its groundbreaking exploration of social issues. 12 (365) DAYS a SLAVE….Slave does have the infamous SL combo 19-12.

    Then there is the new Liam Neeson release NON-STOP which cleverly uses the ONS combo…(ONS Jr. Market, the CanyONS etc.) It also induces alot of 9-x-11 like paranoia. It’s very similar to another Neeson vehicle from a couple of years ago UNKNOWN (same director) with its excessive use of numerology, dark hidden messages and explosive undertones.

  40. Considering that we have now hit the lower target zone of 1870 SPX we must rollover later today and put in some type of topping tail for this first target to be valid. If not, then the likelihood is strong that we’ll go up toward the higher target zone of 1890 area before ending this rally.

    If we do head up higher there is the “even number play” that acts like a magnet for the market, which is of course 1900… meaning that if they get up to the 1890 area they should push up further to tag 1900 (give or take a few points either side).

  41. I’m still expecting more chop all week long. With next week having another FOMC meeting it’s unlikely that traders are going to do much in front of it. If they rally into the meeting then I’m now looking for 1900-1920 SPX for a top.

    If they stay under 1900 all the way up to the 19th then I’d expect some wild swing high to happen on that day around the time the meetings are released. Since we are so overbought now I don’t see anything but down after the meeting.

    The only thing I can see that would cause a rally is if they halt the withdraw of the QE that is currently happening. So far they have cut back $10 Billion 2 times now bring the total from $85 Billion down to $65 Billion. I’m expecting that to continue.

    Therefore, assuming that Janet Yellen says that the Fed is “staying the course” I think we’ll top out around that date and start our larger move down afterwards, which should continue through the rest of March and most all of April I think.

    Until the FOMC meeting is over with I don’t see any major moves up or down and therefore am not taking any positions currently. Daytraders can of course but I’m not a daytrader, so I’m doing nothing.

      • Scenario One:

        At this point I believe we are going to do the same pattern as what happen prior to the Legatus meeting Feb. 7th-9th and more importantly the 7th… which was the deadline date for the debt ceiling.

        As we know we sold off in front of that deadline putting in the bottom on the 5th and then we rallied from there on out until a few days ago. It’s the old “sell the rumor, buy the news” event again.

        So, since we have an FOMC meeting next Wednesday the 19th (which the Fed is expected to cut another $10 Billion from the QE) I’m expecting a bottom going into that meeting and then we should start the rally up to 1900-1910 from there. It’s likely to be choppy and should take 2-4 weeks.

        On the low side I see the 1810 level as support from a horizontal trendline and 1815 from the 20 week moving average. Of course there’s the “even number” play of 1800, which could act like a magnet too.

        In order for that to be the low it needs to happen going into this coming FOMC meeting next Wednesday. If so, then I could see a rally up from that level for 2-4 weeks starting.

        Scenario Two:

        We could also put in a bottom either today or Monday morning around the 1828.99 20ma on the daily chart and/or the prior low of 1834.44 making a double bottom. From there we could rally (especially since you know about “Turnaround Tuesday’s) up toward the downward sloping trendline of resistance coming in around 1860-1865.

        Then at the FOMC meeting on Wednesday we top out with that rally to the 1860-1865 area being some kind of wave B up while the current move down is the wave A down. That would leave a wave C down yet to follow after the FOMC meeting, which could take us down to the 1770 area.

        We must rally into the FOMC meeting for that scenario to play out. If we drop toward the 1810-1815 area into the meeting then I’ll be expecting them to rally up from it. Look and listen to the news as if they talk a lot about the $10 Billion more expected to be cut out of the QE then I’ll be expecting a bottom.

        If on the other hand you hear them talk with a “positive bias” toward it… like “it’s already factored into the market” (or other words telling us sheep not to worry about it) then you know to WORRY ABOUT IT!

        We’ll see in the charts as so far we have NOT put in any positive divergence to indicate that the bottom is in yet. There should be a move up to that falling resistance area at 1860-1865 at some point to make the wave B up and allow for a lower low (1810-1815 area) to happen and make that positive divergence.

        When that happens is unknown? If it happens into the FOMC meeting then the following move down (the wave C) should be stronger and allow for a break of 1800-1810 with a target low area of 1770.

        But, if we some how rally up to that resistance are of 1860-1865 prior to this coming Wednesday (as suggested in scenario one) and then turn back down for the wave C to bottom into the FOMC meeting then I’d expect the 1800-1810 to be the low, making that wave C down weaker.

        The reason I suspect that is based on the time frame needed for each scenario to play out. The first Scenario is much shorting in time and therefore I would expect the distance up and down to be shorter as well.

        The second scenario puts the 1860-1865 wave B up top happening on the FOMC day which of course expands the timeline out more on the wave A down and the wave B up. That would indicate that wave C down would have more time to play out too.

        Couple that with the “fear factor” of the market hearing that the Fed’s are indeed going to continue withdrawing the QE money and there’s no reason to expect any rally as there’s no further news event to give the market a reason to bottom and therefore rally.

        On the other hand, if you bottom into the meeting at say the 1810-1815 area then you might rally from something positive out of the Fed meeting. Since the charts are oversold on many shorter time frames anything “not negative” from the meeting would justify a rally.

        However, a top into the meeting would indicate that the market is “expecting” something positive and wants to get a head start into the predicted “good news rally”, but that rally would work off most of the oversold conditions on the short term charts allowing for another wave down to start should the news NOT be as positive as they expected.

        So while I would NOT go long I would go short should we hit the 1860-1865 resistance area. The projected move down from that zone won’t be determined until we know when that level is hit.

        If hit on Monday then “Turnaround Tuesday” should play out to the downside with the expected low of 1810-1815 going into the FOMC meeting on Wednesday. If hit on Wednesday then I’d be looking for a lower low to follow… like the 1770 area, which should take 3-5 days I’d guess.

        All in all it’s a tough call still, but there is still a possible rally to the 1900 area in play, but I don’t see it happening until first we bottom out the coming wave C down, and right now we still seem to be in the wave A down… meaning it might not happen until mid-April.

        • re: ‘and then we should start the rally up to 1900-1910 from there’

          Weekly charts are now saying ‘no new highs’.

          If market closes next week <sp'1830…its very likely over for the bulls for some months.

          We all see the divergences, we all know the market is tired after the giant ramp from Oct'2011.

          Look to copper…that IS a major warning.

          • I don’t see the weekly charts saying that just yet, but it’s possible I guess. I don’t think either of us will know until we first bottom on this short move down and then turn back up for “just a lower high” or to “make a new high”?

  42. Tomorrow is Pi day in the month/year of the PI. Also the last trading day before the full moon.
    Some indices indicating that a breakdown is occurring right now. Copper basically crashing.

    Dax and other European indices already in a precarious condition. Dax already down to its lower BB and now through it with it closing substantially below it today leaving it the potential for a followthrough big move to the downside??? The US Dollar looks to have bottomed today putting in a large hammer bottom and even I don’t think I can jinx that bottom considering all similar bars for the dollar have produced a bottom going back a year. Momentum and rate of change have been lessening with the latest declines. Oil conversely was rallying in a similar manner to the dollar’s recent decline and topped out and then declined, basically freefalling since the start of the month.

    A drop below the March lows for most stock indices would probably accelerate the downdraft and all are near there right now. Crude oil already has dropped through its early March low area. And pretty much all of the indices put in monster bearish engulfing reversals today which were similarly seen 4 days off the top in 1987 and 2000.

    Gold and gold equities have been following the action of a certain market in a historical epoch right down to the exact timeline and should now be starting a new multi-month decline. Will stocks now follow? Agricultural commodities recently have had a major spike along with gold/silver now setting up for the deflationary collapse? (clearing out all of the shorts in the meantime )

    I’ll probably put out a little piece on LOST, Non-Stop and the Malaysian Airlines similarities over the weekend. I did notice in the LOST opener, the debris of the airliner forming first a 111 and then in the next shot a 11, a numerical combo I have mentioned/ seen in the past. (in the Bowie video I am afraid of Americans etc. etc.). A major 700 year anniversary also coming up. The last 700 year anniversary kicked off the last bear market.

  43. HYIP Finance High profitable returns 10000% of your deposited
    – Automatic payout directly to your e-currency account.
    – Minimum spend is only $300.
    – You may make an additional spend as many times as you dlike.
    – Payments made 7 days per week.
    – DDoS protection powered by Boost-Server
    – Use our referral program and earn up to 12.00% of referral deposits!
    – Support 24/7.
    – High profitable returns.
    Invest Now
    Investment Insurance

Comments are closed.