Tsunami's Account Talk

[Tsunami]

Longer term, a possibility for the timing of the coming major top could be August of next year. Using the simple time symmetry method mentioned by Peter Eliades in this article...
Consensus Financial Commentary (last paragraph)

...if you count from the 10/10/2002 major low of the dot.com bubble bust to the 3/9/2009 major low, that was 2342 calendar days....then count another 2342 days from 3/9/09 and you get to 8/6/2015 as a potential top date. As for price, per my last post the trend line projects to the vicinity of around 2250 if not higher.

Going back to my post from last November, we're now approaching that potential topping date of 8/6/15 shown here:

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I decided to look at this again calculate what that date would be using trading days instead of calendar days, and I come up with 7/31/15. That seems too soon for the pattern I'm expecting (a wave B decline next week then another solid wave C rally to a potential final top) to complete, but now I've got a couple days to keep an eye on. Also, the seasonal strategy says to use the C and I funds in July, then switch to the F fund for August and September. So that strategy fits the 7/31 top date perfectly, probably in the 2150's or a bit higher per this year's lower-sloped trend line. Hmmm.

A different topic, this is interesting: https://lunatictrader.wordpress.com/performance/

That might be the best evidence I've seen yet that there really is something to the theory that moon phases affect psychology, and by extension affects the mood of traders. Apparently people are more fearful during waxing moons and more optimistic during waning moons. We just had a new moon so right on cue we should get a falling market next week.

 

[airlift]

Tsunami,

This is a very realistic and interesting scenario; I would like a better understanding of the highlighted area below because it would help me visualize when the wave B de line would most likely start and the wave C rally end, perhaps close to July 31?:

"I decided to look at this again calculate what that date would be using trading days instead of calendar days, and I come up with 7/31/15. That seems too soon for the pattern I'm expecting (a wave B decline next week then another solid wave C rally to a potential final top) to complete, but now I've got a couple days to keep an eye on. Also, the seasonal strategy says to use the C and I funds in July, then switch to the F fund for August and September. So that strategy fits the 7/31 top date perfectly, probably in the 2150's or a bit higher per this year's lower-sloped trend line. Hmmm.:

More specifically, and based on your experience, is it more likely that we drop perhaps tomorrow and Tuesday; and then rise to around 2150's as we approach July 31st? What couple of days are you keeping your eye on and to look for what? Thank you in advance.

 

[Tsunami]

Airlift,

This is all assuming an Elliott wave count where wave 4 ended at last October's low, and since then the S&P 500 has been in a long ending diagonal wave 5 this year. The recent panic low was finally the end of a long sideways wave 4. Within the ending diagonal, each wave consists of three waves (A-B-C)...the sharp wave that should be close to ending was wave A of 5, now comes wave B of 5 which should correct anywhere from 38% to 62% of wave A, then comes wave C of 5 up to the final top. The highest this pattern could go would be about 2198, above that and wave 5 becomes longer than wave 3 was, and that's not allowed by Elliott wave rules...we should all hope for that though (that the ending diagonal is wrong) since it would be very bullish and the market could sail higher well into next year in a different pattern. For a couple of reasons though I favor the pattern of the bull market ending within a month or two since I'm expecting a major 7-year low around October of 2016....not so much per this link below, but per a guru I used to follow, the late Terry Laundry.
Is the 7.25-Year Stock Market Cycle on Schedule? | Elliott Wave International

This doesn't show the close-up details, but shows the overall possible pattern since 2009:
https://pugsma.wordpress.com/longer-term-sp-500-view/
What would bring on such a sharp drop? I have no clue since things are looking OK right now fundamentally.

My guess is the market tops Monday, maybe year the 2135 high to excite the bears that we might have a double top...then it falls for 3 to 5 days in wave B, then surges higher to confound the bears one last time (and get many to capitulate right at the very top) to a peak somewhere between 2145 and 2175ish in the next several weeks. It would be amazing if I occurred in that 7/31-8/6 zone predicted by the simple bottom-bottom-top pattern. I only have one IFT left for July, so I'll just ride it out since if I get out its 100% for sure the market will be higher by 7/31...but since I'm staying in it will probably end up lower LOL.

I'm trying harder this year to follow the seasonal patterns, and for the rest of the year the winning funds tend to be...
July - C or I funds
Aug and Sept - F or G funds
Oct and Nov - C fund
Dec - S fund (the turn to small caps strength actually happens around 12/19 and lasts into March per Equity Clock » Seasonality)

Ideally, I'd love to see that wave "PA" down in the Pugsma link above bottom around 9/30, then the winter months could be the wave PB up following the seasonality pattern, then comes wave PC down in a bigger panic next year, bottoming in Sept/Oct....then it's up up and away for around a decade in a long wave 3 even more powerful than the rally we've had since 2009, presumably since inflation will finally be unleased, and the Millenniels will be reaching their peak spending years.

 

[Tsunami]

Here's a visual look at the pattern I was describing yesterday. What I don't like about this though is that Daneric has this pattern now, and he's usually wrong since he's a permabear...I suppose he has to get it right someday though. What I think he has wrong though is he's one of the doom and gloomers that thinks the index's will free fall down to below the 2009 lows. I don't think things get nearly that bad, just a standard correction lasting 12-18 months.

http://2.bp.blogspot.com/-klwnkig5lL0/Va2QwUcr1RI/AAAAAAAAazY/4eeXL5O2EOg/s1600/Wilshire+Daily.png

Here's a new Elliott wave site I like: The Art Of Chart | A collaboration between Richard Chappell aka Springheel Jack of www.channelsandpatterns.com (shjackcharts on twitter) and Stan Nabozny forecasting moves in price and time on equity indices, bonds, precious metals, commodities other Looks like he might have nailed the dollar high today exactly.

 

[Tsunami]

My guess is the market tops Monday, maybe year the 2135 high to excite the bears that we might have a double top...then it falls for 3 to 5 days in wave B, then surges higher to confound the bears one last time (and get many to capitulate right at the very top) to a peak somewhere between 2145 and 2175ish in the next several weeks. It would be amazing if I occurred in that 7/31-8/6 zone predicted by the simple bottom-bottom-top pattern. I only have one IFT left for July, so I'll just ride it out since if I get out its 100% for sure the market will be higher by 7/31...but since I'm staying in it will probably end up lower LOL.
QUOTE]

So we got that wave B down, deeper than I'd hoped....or, now the question is was that a wave 1 of wave 3 down and this is wave 2 of 3, and when it exhausts in the next day or two the market will collapse in wave 3 of 3 down. It's close to 50/50 either way but with some indicators so oversold and fear so high I'm still leaning/hoping for that one final rally into an August top...like this: http://1.bp.blogspot.com/-fCa4ZaoVlog/VbbEHAd8DiI/AAAAAAAAa3w/9HT480tSlrE/s1600/wlsh2.png

And now the drama for me is will the index's get back to where they were a week ago by 8/1 when I was contemplating getting out at that top but decided not to.

 

[Tsunami]

Only 7 more days until 8/7/15 when this low-low-high cycle ends. Does the market have one final stab higher left in it? I'm not sure and chickened back out today.

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[userque]

Only 7 more days until 8/7/15 when this low-low-high cycle ends. Does the market have one final stab higher left in it? I'm not sure and chickened back out today.

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To me, because of the constricting BB's and the flat RSI and etc.; that chart suggests a strong Break soon. Rhetorical Question: Which direction seems most likely by the chart?


__________________
"...y'all need to hide your kids, hide your wife, and hide your husband..."

 

[FogSailing]

When I reviewed the data earlier and it appears as though 2077 and 2085 are now support with 2131 and 2189 acting as resistance. The RSI and MACD aren't providing any real clues but there could be a negative divergence forming. I didn't see any major negative reaction based on FOMC minutes today. We get GDP data tomorrow, so that should be a big driver (See calendar). I have no choice but to enjoy the rest of week playing home trader and market voyeur.

Economic Calendar: Financial Calendars - Yahoo! Finance

FS

 

[userque]

...Economic Calendar: Financial Calendars - Yahoo! Finance

FS

Also, this calendar gives an estimate as to the impact the news may have on the markets:

Economic Calendar - Bloomberg

 

[Tsunami]

Nice link Userque...

Today's drop could be just a wave 2, with a strong wave 3 up coming by tomorrow...a 50% pullback to about 2087 is what I'd look for in that case...but I'm glad to be just watching in G for the moment since I just have a gut feeling that panic is fast approaching. A drop below Monday's lows and the 200-dma over the next few days would just about clinch it for me that the top is in.

$SPX - SharpCharts Workbench - StockCharts.com

I'm glad to see that so many in the auto-tracker have moved to safety and locked in nice gains. There will be more juicy profits to be had later this summer/fall once this initial panic is over.

 

[Tsunami]

Going back to my post from last November, we're now approaching that potential topping date of 8/6/15 shown here:

Print SharpCharts from StockCharts.com

I decided to look at this again calculate what that date would be using trading days instead of calendar days, and I come up with 7/31/15. That seems too soon for the pattern I'm expecting (a wave B decline next week then another solid wave C rally to a potential final top) to complete, but now I've got a couple days to keep an eye on. Also, the seasonal strategy says to use the C and I funds in July, then switch to the F fund for August and September. So that strategy fits the 7/31 top date perfectly, probably in the 2150's or a bit higher per this year's lower-sloped trend line. Hmmm.

A different topic, this is interesting: https://lunatictrader.wordpress.com/performance/

That might be the best evidence I've seen yet that there really is something to the theory that moon phases affect psychology, and by extension affects the mood of traders. Apparently people are more fearful during waxing moons and more optimistic during waning moons. We just had a new moon so right on cue we should get a falling market next week.

So here we are at 7/31/15, the date when the number of trading days (and I was careful to account for NYSE market holidays so I think 7/31 is right) from the major dot.com crash low of 10/10/2002 to the financial crash low of 3/9/2009 equals the same number of trading days to today. Seems like the market is trying to roll over after peaking in a wave 2 of 3 today; with end-of-month buying keeping it treading water. If so, next week will bring the beginning of wave 3 of 3 down. August could be quite ugly, or not, we'll see.

7/31 was also pegged as a short term top by this guy who's been pretty accurate with his astro/cycles stuff:

Raj Times and Cycles

I don't subscribe to him so don't know his August low date.

 

[anthony]

Concur Tsunami. I'm stepping aside at least for the first half of August. Stayed in I Fund for now because I think it's got one, maybe two days of catching up to do, plus fair value adjustment. Looking for around $66 on EFA then move the next day. I think both C Fund and the S Fund have another 1 to 1.5% potential for gain left in them, but felt like the risk just wasn't worth chasing that. I'll get it later. I'm looking for a re-entry at one of three possible short-term low points or markers, depending on which one holds and has decent looking MACD and RSI indications: 1) 2040, 2) 1970, or 3) 1830 on the S&P 500.

 

[FogSailing]

Tsunami.... a few days ago I saw Bquat provide a chart of SPX and speculated a potential double top might be in our near future. I've always thought of the double top as characteristic of a completing Wave 4 which when reached would result in a correction followed by wave 5. Do you see us at the completion of wave 4? Just trying to get a sense of where you see us in the cycle. thanks

FS

 

[Tsunami]

Tsunami.... a few days ago I saw Bquat provide a chart of SPX and speculated a potential double top might be in our near future. I've always thought of the double top as characteristic of a completing Wave 4 which when reached would result in a correction followed by wave 5. Do you see us at the completion of wave 4? Just trying to get a sense of where you see us in the cycle. thanks

FS

For the moment, the odds for me are that the double top we already saw in the S&P 500 was a very deep wave 2. The top was in May. The slow summer trading is holding it up but as some point soon it should let loose in that scary wave 3 down. The possibility that the final wave 5 up isn't done yet is still there though, and the July low was the wave 4 low. There's just no way to know until either 2135 or 2046 is broken. I moved to the F fund over the weekend but am already wavering after just listening to the guys on theartofchart.net (per Stan, if the S&P finds support at about 2086 early this week, then that would be a wave 2 of 5 up and we'll see new highs around 2165ish). Too much info just confuses things and I should just stick with the seasonality. A bond default in Puerto Rico sure wouldn't look good for bonds in the short term though.

 

[FogSailing]

Thanks for your thoughts Tsunami. I had speculated earlier last week that it appeared as though 2077 and 2085 are now support with 2131 and 2189 acting as resistance. That matches up with your numbers. I'm on the sidelines tomorrow but I'll be watching the market. All the best to you and thanks again.

FS

 

[Tsunami]

Quite the battle going on and the bears are doing a masterful job at luring people in on those face-ripping rallies. At some point soon the rug could be pulled completely out since the bearish Elliott wave counts call for wave 3 of 3 down to get underway here and now. It wouldn't be all that bad, another 5% down or so before a wave B up rally, but I'm content in the F fund which is doing OK as it should per Aug/Sept seasonality. Only prediction I'll make is that I think by mid-September more than just one person will be using the F fund in the tracker top-50.

I have good company, Jeffrey Saut turned bearish in his latest Monday post, and even Warren Buffet is bearish per this Aug. 7th blog post: Blog | The Felder Report | Taking The Financial Road Less Traveled

Don't have confirmation yet though that the correction is underway... today could be just a wave 2 down with a strong wave 3 up coming tomorrow....I won't take that chance.

 

[Tsunami]

Time will tell, but this indicator may have revealed that the bears finally through in the towel yesterday and closed short positions, and are out of cash to re-short and cause another short-covering moon-shot rally anytime real soon....
$CPCI - SharpCharts Workbench - StockCharts.com
...which will finally let the market head into a bit of a free-fall for a few days... I've got some TZA and QQQ puts and am enjoying the ride (so far, have to watch it like a hawk, thank goodness I'm a fed and can do that at work :smile... 2040-2045 will be a big battleground where the bulls need to regain control and try to start that wave 5 up... Hmm, headline on Marketwatch regarding the "death-cross" in the Dow....looks to me like QQQ should easily plummet to the 200-dma another $3.60 below...in which case my puts will swell to a 400% gain... I know better than to count my chickens though, tomorrow could be 500 points straight up.

 

[Tsunami]

One of the best technical gurus I know of is now sharing a bit more of his stuff via Twitter. One of the amazing things about him is he's a top-notch electrical engineer by day, and does this for fun (and profit, his subscription fees are steep) on the side....

https://twitter.com/PUGStockMarket

 

[Tsunami]

This crazy market reminds me of the twisting and turning back-and-forth "Vertical Velocity" roller coaster at Six Flags in Vallejo, CA that I rode a couple weeks ago. The craziest thing I've been on... Wheeeeeee!

https://www.youtube.com/watch?v=2aKA8d1dIPk

The fear was getting too great (I saw this down at "4" this morning: Fear & Greed Index - Investor Sentiment - CNNMoney), the spring wound too tight, so the reversal wasn't surprising....but now the question is does the blast off continue on up to new highs?...or is this just another short squeeze?

I have no clue but am starting to lean toward the new high scenario.

 

[Khotso]

Time will tell, but this indicator may have revealed that the bears finally through in the towel yesterday and closed short positions, and are out of cash to re-short and cause another short-covering moon-shot rally anytime real soon....
$CPCI - SharpCharts Workbench - StockCharts.com
...which will finally let the market head into a bit of a free-fall for a few days... I've got some TZA and QQQ puts and am enjoying the ride (so far, have to watch it like a hawk, thank goodness I'm a fed and can do that at work :smile...

Hey, I love your input and really respect your opinions regarding the market, but ... are you freaking kidding me?! I'll asume that was tongue in cheek.