4 replies to this topic

[Douglas]

According to my risk summation system, the days this coming week with the highest risk of a turn in or acceleration of the current trend in the DJIA are centered around Tuesday October 25th and Thursday October 27th.  The risk windows are a bit fuzzy this coming week with sizable risk numbers the day before and the day after the peaks on Tuesday and Thursday, so late afternoon of the day before and early morning of the day after both should probably be included in these risk windows.  

 

Last week I thought that the three Monday, Wednesday and Friday risk windows would give the week an "M" or a "W" shape, but it somehow managed to result in both.  The Monday the 17th and the Friday the 21st risk windows saw the most convincing turns.  Gaps and long candles are now both pointing up.

  

 

Not to be out-pumped by the BOE, on Friday the Fed apparently leaked that it was about to tapper the increases in the Fed funds rate. With several Fed minions on the podium this past week, I don't know why they couldn't have just said this themselves instead of going through the back door. I suppose they may have just been testing the waters to see what the market reaction would be to such a move before they came out and committed. If this stock market rally really gets going, I suspect they'll reel back in this trial balloon before it creates a new economy stimulating stock market bubble.

 

The timing of this Fed market pumping move is also a bit curious given the current extreme risk window.  They could also be trying to do a little bit of preventative pumping, stepping in front of any crash risk given the plunging long bond and the October market hazard zone.  

 

If you yanks think that you have a mess is D.C., just cast a jaundiced eye towards London where the residents are changing so fast at #10 Downing Street that it's now listed on Airbnb.  This time they've promised to limit the new leader selection process to just one week, so by next weekend we should have a new PM.  At least over here in the UK if we get a clinker in charge, they get rid of him/her pretty pronto unlike in the States where you're stuck with them for four years, you can't even seem to impeach them out when they do something bat crap crazy or go off script senile.  

 

The new Fed stance has probably started playing dirges for my ill-begotten E-Wave count.  Unless some pea shooter Fed minion speaking this week deflates this trial balloon, the bottom of the first leg of the larger bear market is probably in.   I'll post an update to my E-Wave count later in the week if it clearly suffers a mort subite.

 

Regards,

Douglas

 

 

 

 

[slupert]

According to my risk summation system, the days this coming week with the highest risk of a turn in or acceleration of the current trend in the DJIA are centered around Tuesday October 25th and Thursday October 27th.  The risk windows are a bit fuzzy this coming week with sizable risk numbers the day before and the day after the peaks on Tuesday and Thursday, so late afternoon of the day before and early morning of the day after both should probably be included in these risk windows.  

 

Last week I thought that the three Monday, Wednesday and Friday risk windows would give the week an "M" or a "W" shape, but it somehow managed to result in both.  The Monday the 17th and the Friday the 21st risk windows saw the most convincing turns.  Gaps and long candles are now both pointing up.

  

 

Not to be out-pumped by the BOE, on Friday the Fed apparently leaked that it was about to tapper the increases in the Fed funds rate. With several Fed minions on the podium this past week, I don't know why they couldn't have just said this themselves instead of going through the back door. I suppose they may have just been testing the waters to see what the market reaction would be to such a move before they came out and committed. If this stock market rally really gets going, I suspect they'll reel back in this trial balloon before it creates a new economy stimulating stock market bubble.

 

The timing of this Fed market pumping move is also a bit curious given the current extreme risk window.  They could also be trying to do a little bit of preventative pumping, stepping in front of any crash risk given the plunging long bond and the October market hazard zone.  

 

If you yanks think that you have a mess is D.C., just cast a jaundiced eye towards London where the residents are changing so fast at #10 Downing Street that it's now listed on Airbnb.  This time they've promised to limit the new leader selection process to just one week, so by next weekend we should have a new PM.  At least over here in the UK if we get a clinker in charge, they get rid of him/her pretty pronto unlike in the States where you're stuck with them for four years, you can't even seem to impeach them out when they do something bat crap crazy or go off script senile.  

 

The new Fed stance has probably started playing dirges for my ill-begotten E-Wave count.  Unless some pea shooter Fed minion speaking this week deflates this trial balloon, the bottom of the first leg of the larger bear market is probably in.   I'll post an update to my E-Wave count later in the week if it clearly suffers a mort subite.

 

Regards,

Douglas

 

 

 

 

Don't forget Yentervention and the bond buying panic.

[Douglas]

slupert, Japan is definitely a black swan source worth keeping an eye on.  The relatively low interest rates in Japan should keep putting pressure on the currency, and the truly massive debt levels should equally put pressure on the JCB to intervene as they did late this past week.  Looking at the fxtop.com Yen chart below, it looks to me like the currency could have a long way to go before it gets back to the exchange rates in the 1980's glory days of Japan.   

 

 

If the JCB loses control, the potential JGB train wreck there could roil the world's bond and stock markets.  With 5% or possibly higher actual inflation there including food and energy there is no way 10-year JGB's should be yielding a lousy 0.25% as shown in the marketwatch.com plot below, something's got to give.  

 

 

Regards,

Douglas

[Douglas]

Today's rally is getting awfully close to my line in the sand (LITS on the plot below) beyond which I will be forced to once again change my E-Wave count.   My line is really a zone between the 61.8% retracement of the sell off since August high and the 31.8% retrace of the entire current bear market leg down since January, somewhere between 31750 and 32130 where I expect the current advance to fail and turn back down.  The change will probably just amount to moving the large red "A" at the end of projected move up to the mid-October low.  This allows for a "B" wave rally which could last for months and could retrace a good fraction, if not all, of the sell off.  

 

I suspect whether this E-Wave count change is needed or not will hinge on what Fed minions say (or more likely leak) in the next few days leading up to the November 2nd Fed presser.  IF they confirm the "taper" in the Fed funds rate increase, then change is needed, if they vehemently deny any such easing, then maybe not.  Their deafening silence since the first WSJ leak about the taper is very telling and does not bode well for the count shown below.

 

Regards,

Douglas

[Douglas]

Today's DJIA rally ran just above the LITS zone that I noted above and filled a gap in the DJIA at the dark blue line then turned down late morning. The sawtooth action reminded me that I haven't looked at Andrew's Pitchforks in a long while, which was a mistake as shown below. 

 

 

Hard to know if the Fed taper trade is over or if it still has enough umph left to break through the light blue Andrew's pitchfork center leg which is more or less at the top of the LITS zone.  If it does, I'll post the revised E-Wave count that I mentioned above.   

 

Regards,

Douglas