Doesn’t Look So Hot

We had a wall into the close, and though those can often gap up the next day, the exception to that rule is Fridays. Those more commonly see followthrough on the Mondays that follow them. I’ve been rooting for the bulls because of my sheer disgust for crowded trades, but something troubling has happened in the last 24 hours. Most of the bears I follow who were looking for a deep dive just a few days ago, are now looking for this to be the final leg of something. Like just a few points below us should be the end of some “3” or something. I suddenly don’t actually see a lot of folks looking for a deep plunge, and the opposite was true just a short while ago.

I suspect I know why. When most were trying to count the structure as a super nest of ones and twos and ones and twos, looking for the 3rd of the 3rd, they got tripped up and slapped around by this thing that does, in fact, look like a triangle (green structure in the chart below). And having taken a bruising in that structure, they now think that was a “4,” and we’ve entered a “5” (of something—their respective analyses are all a little different). And in this case, wave 3 isn’t very big, which means wave 5 shouldn’t be very big, and it’s already getting big, so they must be concluding that we’re about done here:

SPX

That’s very interesting. If everyone who had been looking for a plunge is not now, it’s at least more possible that we get a deep plunge after all. And so I don’t have to feel so much disdain because maybe this isn’t very crowded after all. Very nice.


The bullish view is not looking so good. The bullish view had us in this elegant A-B-C, and that ideal 1:1 fib relationship was an excellent place for the structure to complete, but we’ve cooked that fib and moved on.

SPX

There may be other ways to count this as complete, but I think I’ve tried every combination of highs and lows, and can’t see a fib here, where we’re at now. So not so good. And even if we were at a good fib, it’s still best to see a monster intraday reversal and, lol, we sure don’t have that today.


So the bearish view is looking promising, sentiment be damned. Sentiment can worsen near a low in terms of time—if not also in terms of price. It’s terrible here, and it’s possible that we bottom in a day or two, making the poor sentiment close to a low in time, but not so much in price as we may have almost another 200 points left to go.

The bearish count is this:

SPX

That we are still in primary (or it could be cycle) “C.” And we have a juicy fib below that has many other fibs with it, has a relationship with the height of the GFC, and coincides with the Pre-COVID high. This count is looking more and more probable here. But it’s a doozy, as it’s almost 5.5% below us. It is possible that we get there on Monday for a big, final hoorah for the bears.

Zoomed in a bit it looks like this:

SPX

And today’s action and perhaps Monday’s could be this:

SPX

We could very well be in the 3rd orange wave down of blue “c,” etc. Maybe the trade’s not so damned crowded now, which makes me like it a lot more. Some notable characters on Twitter are specifically not calling for a deep dive now, I sort of like that. I would love to take over that role for a day so long as 7,000 other people aren’t lol.

So let’s see what we do. I do think there is a strong possibility that this will conclude a major structure if we get this puke. I don’t know if this will all just be pink A-B-C of a larger (yellow) “a,” or if the whole damn thing is done for good. My main reason for thinking that is possible is some stuff like Bitcoin and Facebook (Meta). They look like they’ve fallen enough in price, but have not corrected enough in time. But that’s a bridge we don’t need to try to cross for a very long time, and when this structure does complete, we should be bullish well into next year (at the very least).


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3 thoughts on “Doesn’t Look So Hot”

  1. We can poke down the .618 just like we poked up the .236 and reverse… we really don’t have to flip on a perfect fib IMHO. Plus, we’ve got 1.5 months of going down (amazing how it took 8 months to go up that much in 2020/2021!), which is about the length of these cycles… Back to 366 which is a nice post-March/2020 “volume shelf” like the trend-spider like to put it (useless 90% of the time, but who know this time). Otherwise, the next “shelf” stop down seems @ $350. Anyway, just my useless 2cents!

  2. Also, we had HUGE volume today! One of the top 10 days of this year just eyballing this on Trading view… not a good sign I guess especially if we have “follow through monday”!

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