There is now an overlap on the futures market between this low and the 6/28 high. We would account for this by utilizing this count instead, but this is contingent upon the market becoming bullish, which I don’t know for certain whether it will, though I continue to favor the view.
It seems to me that someone is being liquidated tonight. Strange for them to sell before the Asia session even opens. So someone is being forced to capitulate (unless Russia invaded Alaska and I missed it).
If this is a capitulation low (which seems likely to me), then the whole structure can be a 1-2 of cycle (yellow) degree:
Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.
With a slight recount, I have good fibs at today’s low. I would like to see a rally from here.
Ideally what I would like to see is depicted by the speculative path below. I would like to see a rally back to the neckline that—by the time we get to it—only looks to be in 3 waves. That could be the orange 1-2, followed by the green 1, for instance. A pullback into a close up there would be beautiful, setting the stage for what will look like an a-b-c up, to be followed by a crash, but will instead be, as I believe, the nesting leading to a 3rd of a 3rd to the upside (for the green 3):
Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.
I expected the rally to fail, and that worked. And during that failure, I became somewhat agnostic because the drop hasn’t been entirely as I would have liked it to be for the bearish case. And because of that I have given close to equal weight to both bearish and bullish outcomes, but I now think I have enough information to hold a conviction.
And that conviction is bullish.
I detailed some of my initial thoughts here, and I will discuss a few more now. To summarize some of my prior thoughts, I wanted to see the meat of the move lower blast through 4000, but the meaty part of the move happened way too high, spending all of the fuel. And so here we are, having reached seller exhaustion, mere points below that level, and just barely under the 50-day SMA. That’s not a great sign, I don’t think. Because we are now due for a very big rally, and that will mean that we will have found support on 4000 and the 50-day SMA. And that is largely fatal to the bearish case.
So here we are, with a 5-wave pattern, probably now complete. It’s much clearer on futures, so I’ll use that to demonstrate it:
Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.
I posted this as a thought before, but I can’t immediately find the post (it wasn’t long ago). If I find it, I will place a link.
I am not yet convinced that we won’t have a stronger reaction to the 4000 area and the 50-day SMA. We may count “Wave 4” as completing here. Doing it this way gives us a different slope to the channel (because it’s based on the top of “3”) and we’re challenging this channel now, which wave fours typically do.
I’m not yet in the mood to get too bearish.
Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.
We are approaching equality of legs (on this count alternative) and have reached the 50-day SMA. I would expect a reaction higher near these levels.
Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.
Compatible with both the bullish and bearish pictures, I would still expect some more of this drop to be retraced. What I have pictured below is the bullish count, but that need not be the case, as we may just be “one-twoing” our way down still. Regardless of that, we have the head and shoulders neckline above us, and that should be retested, I would expect. Noting as much in Discord this morning, I discussed how I have taken some calls, expecting such a move over the next few days.
So, hopefully we see another leg up, at least.
Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.
I will make a couple of observations on the S&P 500, taking into account the gap down tonight and where it sits because of that.
If we are in the bearish count—which has been my strongly favored view until recently—we are sort of doing what I had hoped. And I want to elaborate on what’s maybe missing.
But first, let’s note a couple of things.
We can draw parallel (green) rails, and we gapped under the lower rail.
And, if—just for the sake of testing—we treat the decline off the recent high as a 3-wave move, we’ve come almost exactly to “equal legs” right at 4000 on the nose.
The first thing is quite bearish (loss of potential channel support). The second might be bullish (equal legs might be a place for this part of the decline to end). These are in conflict with each other (as things stand right this second).
Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.
It has been a while since I have visited this stock. The last time I did, I identified a potential bull flag up at the highs late last year, but as that structure failed to produce a rally, I retracted that call about two weeks later. That was fortunate, as the stock has just completely fallen apart ever since.
I have taken the time to recalculate the fibs as it stands here, and it appears to be in a very large a-b-c corrective structure (in yellow) that will span years. I believe we are now in the cycle (yellow) “b.” Within that yellow “b,” it seems to me that we have probably completed pink A, and are in pink B now. And within that, I suspect we may have a rally ahead of us. Because the price range is so extreme, I have selected the lowest fib (23.6% retracement of the decline) which also coincides with an Orange A to Orange C relationship as a potential target. That will also take us to an area of a prior consolidation (the orange box in the middle of the chart).
So, after such a long and harsh decline, it would make sense for this to see some relief, and so long as the low at Orange B holds, it may produce a rally into next year.
Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.
When I first initiated access to my work (when I first produce it) using Patreon, I made some guesses at what I thought folks would like, and I set things up that way.
Since then, I have had time to review what folks actually use most on a regular basis, based on where folks visit on the site most frequently. In response to what I think folks like the most, I have simplified the tiers that I set up back then. I have reduced them to just two.
Tier 1 members ($20/mo, just $0.66 per day) will have access to all of the articles I write, regardless of their topic. I usually have at least something to say about the S&P 500 every day (and I discuss the kinds of trades that I am taking and why), and I often write about other assets less frequently and I produce general commentary regarding the markets throughout the month. All of these articles may be read by members of this tier.
Tier 2 members ($35/mo, just $1.16 per day) will have access to the articles above, plus they will be able to access the “Current S&P 500 Count” page (where I often keep an alternate count), the “Other Selected Counts” page where I keep counts (updated every week or two) for about 20 different assets (including some commodities, stocks and crypto), and they will be able to access my Discord Chat Server (which now replaces the older interface I had been using before). Note: I’m not always super active in chat, because I’m not really a day trader, but I enjoy chit chatting with folks, and if something does come up during a session, I enjoy discussing it.
I hope these changes are welcome.
A few additional notes:
To access the private Discord chat server (for Tier 2 members), you will need Patreon to assign your Discord account to a specific role on my chat server in order to be able to view the private channel. This is an automated process, performed by a bot of theirs. To do this, you must link Discord to your Patreon account, so that it can assign you the appropriate permissions. It’s fairly easy to do. Instructions may be found here. Once that is complete, you may visit my chat server here and, if Patreon has assigned you to the proper role, you should be able to chat.
I will leave the old chat platform up for a while during the transition (probably a few weeks). I will still need a few of you to migrate to Discord so that I can make sure it’s all working right. It’s a much more powerful service, so I think it will be better.
I have removed chart requests as a feature from the site. Few people used that, and it can sometimes take several hours for me to produce a proper chart (and discussion), and I needed that to be in a very expensive tier, and it’s not been popular, so I’ve taken that away.
You should visit Patreon to make sure that you are in the tier that you would like to be in (I used two of the prior tiers, so most of you should already be where you want to be, but it won’t hurt to make sure). Most of you have been effectively upgraded to additional resources, so I imagine it will be acceptable.
As always please let me know if you have any questions, and thank you for your interest in my work. I am grateful.
Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.
This post is just some chill weekend things to consider. Maybe a companion to a cup of coffee or some whiskey. Nothing urgent in here.
This is back burner stuff, so just tuck this away somewhere and pull it out only in case we need it. As I’ve said, I’m not particularly in love with the bullish thesis, but I also won’t completely dismiss it yet, either. I want to summarize why, and discuss a target possibility and what that could mean for various instruments.
We know that especially by the June lows, sentiment reached absurdly poor levels, levels typically associated with lows that have great endurance (months not weeks).
We know that historically, the market has never topped (so far as I can see) before a hiking cycle has begun (I understand this time might be an exception).
The structure off the top of the market has been especially choppy, perhaps too much so for a real bear market.
The rally we recently had broke a lot of records, and did a lot of things that typical “bear market rallies” tend not to do.
The breadth thrust we had during that rally we just had was unusually strong. Stronger than the thrusts in typical—even very strong—bear market rallies of the past.
Also, the NYSE Composite Index made a new high after the other major indices, which it has never done before. Usually, it diverges, making a lower high when the S&P makes a higher high at the high. The NYSE Composite topped on 1/14/22; the S&P on 1/4/22. Highly unusual.
Because of all of that, I am at least open to the possibility that we go to all-time highs once more. That may sound ridiculous, but that rally did impress me. Now, if we go and check back in on that head and shoulders neckline that we just broke today and fail from it, so be it. I’ll be all bear for months. But what if we don’t? If we don’t (fail from it), this is roughly what I would expect.
IF we do rally, I’m not expecting some ridiculous rally to 7500 or anything like that. There is a terrific fib at 4950.25 on the nose. It is the 50% extension of the rally from the COVID low to the all-time highs, extended from the June low:
Note: When articles are first posted, most of them are made available only to my Patreon supporters (I do try to publish some public posts on occasion). Over time (usually after a period of a few weeks or so), I make all of the work public. To gain access to my work when it is produced, please consider becoming a patron. More information may be found on my About page and on my Patreon page. In a nutshell, patrons of any denomination (you get to pick the amount) will be able to read my weekend analyses, Tier 1 members ($20/mo.) get access to all of the articles I write, and Tier 2 members ($35/mo.) get access to those, plus counts on other instruments and my Discord chatroom.
