4 replies to this topic

[Douglas]

According to my risk summation system, this whole danged coming week is pretty much a risk window with peaks in risk on Monday the 24th of February and Thursday the 27th, but the other days have such high readings that they can't be ignored either. Sorry, not much help timing-wise, but do watch out where you walk in the market next week, there may be land mines strewn about your path.

 

Last week the Tuesday risk window caught a low that didn't hold, so not very helpful, but the Thursday risk window caught the hard turn down, so that made up for it a bit.  Worrisome that last Friday was not a risk window given the plunge.  I suppose we'll see why this coming Monday.

 

 

As I noted last week, even though it's not the 4th of July, there is the potential for some real fireworks this coming week on Monday February 24th or maybe a bit later in the week, since next week is a crash window with the peak in risk on Monday.   I know that I've pointed out these crash risk windows a bunch of times in posts here and none of them have amounted to a hill of beans.  The probability of such an event next week is very, very low, but higher than normal.  It requires the day to be in a crash window, check for most of next week, to have a high risk window value, check for most of next week, it requires the market be oversold, check and it requires something to happen that can be perceived as a black swan event.  As you can imagine, that last one's the finger in the dike that will usually stop the flood.  I know that I sound a bit like Chicken Little, but I just thought that I should mention the risk, tiny as it is.  Unusually, there's another one of these crash windows next month - more on that a bit closer to the time.

 

Speaking of hills of beans, the Tuesday and Wednesday of last week risk window for the British Pound that I noted in last week's post didn't amount to anything but a brief slow down in the Pounds ascent.  The CME COT signal for a stronger Pound over the next month or so remains intact.

 

Given the risk noted above, low as it is, for next week, I show some potential downside targets below.  The purple one is just nearest gap fill at about 42,500, the red line is of course the obvious 200 SMA at 41,700, the blue line is a gap fill at about 41,000 which also lines up pretty well with a couple of pivot tops, and the green 38% retracement of the run since the October 2023 low which also roughly lines up with a couple of pivot tops at around 40,100. The first NYSE circuit breaker at -7% or about 40,400 is another possibility I suppose.  Anything lower would take a real nasty black swan. 

 

 

 

Both my primary bullish and the alternative bearish EWave counts remain in play.  New highs kills the bearish one calling for a big "C" wave down, and breaking the 13 January low will slay the bullish one which is still calling for new highs.  

 

Regards,

Douglas

[beta]

Thanks Douglas, your work is much appreciated.  Rising JPY does not help the bulls here; and your next window may coincide with BOJ's scheduled meeting.

 

Re Ewave counts, here's a possible clue:  chart patterns from recent peaks on majors seem to resemble fives, not threes.

 

Best regards. 

Edited by beta, 23 February 2025 - 04:25 PM.

[Douglas]

beta, the cotton picking rain pounding on our flat roof woke me up in the middle of the night, so I thought that I would take a quick look at the futures.  My short term very bearish DJIA EWave count driven by the crash window is shown below in the hourly futures market using a finviz.com plot..  The bearish count manifests itself in nested 1-2-1-2 waves in the 3rd wave currently under development.  The downside party should really get started when (if) the current 2nd wave is complete which could be as early as Monday leading to a 3rd wave of a 3rd wave of a 3rd wave.  This count requires something to happen in the next couple of days which is perceived as really negative for the stock market.  The chance of this occurring so "conveniently" right when the bears need it is somewhere between slim and none. That's why I have my primary bullish EWave count folded neatly in my back pocket.

 

 

Regards,

Douglas

Edited by Douglas, 23 February 2025 - 11:28 PM.

[Douglas]

As to when, finviz.com DJIA future triangle focus at roughly late day Tuesday February 25th might be pointing at a turn as they sometimes do.  

 

 

Regards,

Douglas

[beta]

Take a bow, Douglas.  Brilliant timing well-done !!    

 

p.s. that alt-wave count in your back pocket seems to be in play.  

 

 

According to my risk summation system, this whole danged coming week is pretty much a risk window with peaks in risk on Monday the 24th of February and Thursday the 27th, but the other days have such high readings that they can't be ignored either. Sorry, not much help timing-wise, but do watch out where you walk in the market next week, there may be land mines strewn about your path.

 

Last week the Tuesday risk window caught a low that didn't hold, so not very helpful, but the Thursday risk window caught the hard turn down, so that made up for it a bit.  Worrisome that last Friday was not a risk window given the plunge.  I suppose we'll see why this coming Monday.

 

 

As I noted last week, even though it's not the 4th of July, there is the potential for some real fireworks this coming week on Monday February 24th or maybe a bit later in the week, since next week is a crash window with the peak in risk on Monday.   I know that I've pointed out these crash risk windows a bunch of times in posts here and none of them have amounted to a hill of beans.  The probability of such an event next week is very, very low, but higher than normal.  It requires the day to be in a crash window, check for most of next week, to have a high risk window value, check for most of next week, it requires the market be oversold, check and it requires something to happen that can be perceived as a black swan event.  As you can imagine, that last one's the finger in the dike that will usually stop the flood.  I know that I sound a bit like Chicken Little, but I just thought that I should mention the risk, tiny as it is.  Unusually, there's another one of these crash windows next month - more on that a bit closer to the time.

 

Speaking of hills of beans, the Tuesday and Wednesday of last week risk window for the British Pound that I noted in last week's post didn't amount to anything but a brief slow down in the Pounds ascent.  The CME COT signal for a stronger Pound over the next month or so remains intact.

 

Given the risk noted above, low as it is, for next week, I show some potential downside targets below.  The purple one is just nearest gap fill at about 42,500, the red line is of course the obvious 200 SMA at 41,700, the blue line is a gap fill at about 41,000 which also lines up pretty well with a couple of pivot tops, and the green 38% retracement of the run since the October 2023 low which also roughly lines up with a couple of pivot tops at around 40,100. The first NYSE circuit breaker at -7% or about 40,400 is another possibility I suppose.  Anything lower would take a real nasty black swan. 

 

 

 

Both my primary bullish and the alternative bearish EWave counts remain in play.  New highs kills the bearish one calling for a big "C" wave down, and breaking the 13 January low will slay the bullish one which is still calling for new highs.  

 

Regards,

Douglas