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Today is a Risk Window, But The Crash Risk Window Opens Tomorrow


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#1 Douglas

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Posted 15 March 2023 - 03:35 PM

I didn't find the time to publish the weekly risk windows this past weekend, but today and Monday were the two risk windows for this week.  Monday's low only held for 24 hours, so it was a dud.  Today's low looks better with a nice hammer candle stick appearing to form (as I type there's about a half hour left to trade). 

 

A crash risk window opens tomorrow March 16th and closes next Wednesday the 22nd.  Given that J. Powell blinked and bailed out uninsured depositors at SVB, he may have short circuited this dangerous window, maybe.  For it to play out, another shoe will need to drop.   If the Fed goes full Arthur Burns at the meeting next week and pauses rate hikes or even cuts rates, then that will certainly slam closed the risk window.

 

The reversal today was in the neighborhood required to complete the "b" wave down in my Elliott wave count, but something is rotten with the structure of the "c" wave in this "b" wave.  Maybe it has more work to do.  The next couple of days should clear things up.  More on this later. 

 

Regards,

Douglas



#2 Douglas

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Posted 16 March 2023 - 12:53 PM

My updated DJIA EWave count is shown below which assumes that the Fed has yet, once again, ridden to the market and banking system's rescue staving off a crash by yet again printing reams of funny money by backstopping a couple of big insolvent banks. 

 

I know I look silly publishing these crash risk windows that don't amount to a hill of beans, but I tell you this crash risk window was the real deal and could have seen a monster if the Fed had not acted.  Unfortunately the unintended consequences of the Fed's  actions will be felt in the future when big banks, who now know with absolute certainty that the Fed has their backs no matter what silliness they get up to will step even further into lending lunacy, a moral hazard of the first order.  I am, of course, just a bit premature in declaring this crash risk window dead since it does have a few more days to rise like a phoenix from the ashes it was sent to by the Fed and bite the market.  Needless to say, I'll sleep better after next Wednesday.

 

hdXIvXG.jpg

 

Regards,

Douglas


Edited by Douglas, 16 March 2023 - 12:53 PM.


#3 K Wave

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Posted 17 March 2023 - 12:07 PM

My updated DJIA EWave count is shown below which assumes that the Fed has yet, once again, ridden to the market and banking system's rescue staving off a crash by yet again printing reams of funny money by backstopping a couple of big insolvent banks. 

 

I know I look silly publishing these crash risk windows that don't amount to a hill of beans, but I tell you this crash risk window was the real deal and could have seen a monster if the Fed had not acted.  Unfortunately the unintended consequences of the Fed's  actions will be felt in the future when big banks, who now know with absolute certainty that the Fed has their backs no matter what silliness they get up to will step even further into lending lunacy, a moral hazard of the first order.  I am, of course, just a bit premature in declaring this crash risk window dead since it does have a few more days to rise like a phoenix from the ashes it was sent to by the Fed and bite the market.  Needless to say, I'll sleep better after next Wednesday.

 

hdXIvXG.jpg

 

Regards,

Douglas

That scenario could play into Apple's April earnings release quite nicely if it starts to run a bit from here....

 

The Big Kahuna is living on borrowed time, but perhaps it can make it into late April......although back below 153 now and bullish bets become very suspect...


The strength of Government lies in the people's ignorance, and the Government knows this, and will therefore always oppose true enlightenment. - Leo Tolstoy

 

 


#4 Douglas

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Posted 17 March 2023 - 01:39 PM

CNBC just announced that half the money the Fed had drained from their balance sheet has been put back on in just the past week in supercharged QE associated with the banking crisis.  Next week's Fed press conference is probably going to be a real doozy if any reporters with half a brain are permitted to ask questions.  

 

K Wave, based on my very crude red measured moves marked below in red from the mid-move consolidations marked in yellow, it looks like Apple might have a shot at the high 170's if this behaviour is repeated, my EWave count "c" wave develops like I show above, and if no other banking crisis shoe drops.

 

5k7YJil.jpg

 

Regards,

Douglas


Edited by Douglas, 17 March 2023 - 01:40 PM.