10 replies to this topic

[Douglas]

According to my risk summation system, the days this coming week or so with the highest risk of a turn in or acceleration of the current trend in the DJIA are Monday October 3rd which is part of an extended risk window from last week and a window stretching from this coming Friday the 7th through Monday the 10th.  There is also a moderate size cluster of turn risks at the center of this coming week, not sufficient to merit a risk window tag, but significant enough to see some sort of market disturbance.

 

Last week the Monday the 26th risk window was a dud, no high, no low, no good.  The end of the week Thursday afternoon thru Monday the 3rd risk window may have tagged a low late Friday afternoon, or it might appear this coming Monday in the extension of this risk window.  

 

 

While everyone was speculating when J. Powell would pivot, he got upstaged by the BOE head who not only stopped QT but restarted QE with a bang this week joining the new UK government who's cutting taxes and also trying to pump up the economy.  Apparently, a number of UK retirement funds were overloaded with longer maturity guilts (UK speak for bonds) which were so severely underwater due to the recent rate increases that they were on the cusp of having to default on some pension obligations to meet the limit on their maximum permitted drawdown.  Rather than face an angry mob of walking cane wielding pensioners banging at their door, the BOE threw in the towel on their inflation fight and poured money into the gilt market driving rates down and into buying the Pound driving it sharply higher.   

 

I'm sure J. Powell was taking notes for when (not if) he is also "forced" by some as yet unknown fiasco of his own making into restarting the money pumps.  You know it's going to happen, the only question is when.  So far, at least, the air is being let out of the stock market slowly, but that also means, so far no capitulation and no panic creating a low of importance, resulting in selling which is painful, but not sufficiently so as to elicit a pivot.  Well, October has the reputation as the month of bottoms, so maybe the market was just biding its time until a more favorable calendar window for a real gut-wrenching plunge to roll around.  Halloween may not be the only scary day this month.  Boo!

 

Regards,

Douglas

Edited by Douglas, 01 October 2022 - 06:22 AM.

[pdx5]

Yes, I am patiently waiting for capitulation day. Earlier this year my FF was 3500 in 2022 for S&P500 and that is getting close. My 74% cash is itching for action. If down 1% on Monday I plan to nibble more on longs.

[K Wave]

Yes, I am patiently waiting for capitulation day. Earlier this year my FF was 3500 in 2022 for S&P500 and that is getting close. My 74% cash is itching for action. If down 1% on Monday I plan to nibble more on longs.

Going to the Covid lows...at least...

 

Has happened already to so many stocks...this kind of cancer does not just disappear...it spreads everywhere

 

AAPL TSLA AMZN MSFT GOOGL all gonna get there...and likely more...well maybe not Covid lows on TSLA, but far, far down from here.

 

This is not anything like the last 40 years market now....new rules...

 

You will see soon enough...

 

#WatchTheMegaCaps

Edited by K Wave, 01 October 2022 - 10:32 AM.

[K Wave]

Deere yet another one gettin' setup for the huge plunge..the big CAT already way out in front.

 

[K Wave]

SPX did not get quite as low as I thought it might in September, but June low still busted, as expected.

 

The down part of the roller coaster ride now gets started in earnest with full downside momo as the last cars have come over the top...

 

Edited by K Wave, 01 October 2022 - 10:40 AM.

[Douglas]

K Wave & pdx5, I was all beared up too at the beginning of this past week, but then the BOE head threw in the towel and restarted QE despite the inflation.  Driving your tank in reverse is no way to win a war.  The BOE head apparently saw systemic risk which overwhelmed his dark heart's desire to damp down prices.  Now, you could argue that what he saw was just the part of the iceberg sticking out of the water and his boat is still heading for a Titanic redux.

 

If J. Powell cranks up the funny money presses too, it will be hard to keep this market corralled in the pin.  Of course, if the SS US hits the iceberg before Powell pivots, then maybe a quick trip into the cellar before lift-off might still be in the cards.  It all depends on whether it's the chicken first or the egg and whoever gets it wrong will definitely have egg on his/her face.  I suppose we won't have to suffer in suspense for too long now that the BOE has panicked.  In pretty short order we should see what sort of stuff J. Powell is made of, and I'm horribly afraid that it clucks, pecks and craps in a barnyard.

 

My S&P projection for the market possible sojourn into the cellar is shown below.  The purple line sits straddle a gap that if is the measuring type, projects down into the 3200 neighborhood, and the green horizontal line at about that same level is supported by three pivots, so 3200 or there abouts looks like a pretty good target for a quick visit in the coming weeks.

 

 

Regards,

Douglas

[K Wave]

K Wave & pdx5, I was all beared up too at the beginning of this past week, but then the BOE head threw in the towel and restarted QE despite the inflation.  Driving your tank in reverse is no way to win a war.  The BOE head apparently saw systemic risk which overwhelmed his dark heart's desire to damp down prices.  Now, you could argue that what he saw was just the part of the iceberg sticking out of the water and his boat is still heading for a Titanic redux.

 

If J. Powell cranks up the funny money presses too, it will be hard to keep this market corralled in the pin.  Of course, if the SS US hits the iceberg before Powell pivots, then maybe a quick trip into the cellar before lift-off might still be in the cards.  It all depends on whether it's the chicken first or the egg and whoever gets it wrong will definitely have egg on his/her face.  I suppose we won't have to suffer in suspense for too long now that the BOE has panicked.  In pretty short order we should see what sort of stuff J. Powell is made of, and I'm horribly afraid that it clucks, pecks and craps in a barnyard.

 

My S&P projection for the market possible sojourn into the cellar is shown below.  The purple line sits straddle a gap that if is the measuring type, projects down into the 3200 neighborhood, and the green horizontal line at about that same level is supported by three pivots, so 3200 or there abouts looks like a pretty good target for a quick visit in the coming weeks.

 

 

Regards,

Douglas

For first wave perhaps.

 

But market is going much lower, and will not go above the August highs for a very long time to come.

 

Popped bubbles do just magically re-inflate.

 

And that Covid funny money fueled bubble was EPIC. The following disaster will be equally so.

[K Wave]

Here is just small sampling of what is likely coming for the bubble stocks that are just starting to pop now. And there are many way worse off than those below. These are just some of the visible ones, including a few former Mega Caps.

 

This will spread like an out of control cancer.

 

When AAPL MSFT GOOGL TSLA AMZN look something like these, ask yourself where SPX is likely to be. Those monthly MACDs on the Mega Cap stocks will not stop until well below zero now that they are all in HARD DOWN mode after the insane moves up....just as the stocks below have done, but on a slightly different time line in the longer scheme of things.

 

The Mega Caps (large portions of the indexes) bears just started to fight in earnest in August.....long way down from there.

 

Don't overthink it....

 

 

 

 

 

 

 

 

Edited by K Wave, 01 October 2022 - 01:03 PM.

[Douglas]

K Wave, yes, that leg down that I show above to the 3200 neighborhood is just the "A" wave of what I think will be an A-B-C bear market stretching into late 2023 or even longer depending on how messy the "B" wave is.  Ultimately, I expect the bear market to reach the "4" of previous degree sitting at the March 2020 covid low.  This, of course, is all pie in the sky hypothecation of the first order.  Not in my wildest dreams do I suppose that the market will dutifully obey and follow my roadmap, but bear market it is, and they go down, so at least of that much I'm fairly certain.  Oh, and I've never been accused of overthinking, not thinking, yes, but a dearth rather than an abundance thereof. 

 

Regards,

Douglas

Edited by Douglas, 01 October 2022 - 01:01 PM.

[K Wave]

and here are the BIG 5 monthly as of September for the visual aspect of where things could be headed.

 

These stocks will continue to drive the indexes for some time to come.