One Last Intermediate-Term Discussion for the Weekend (Important Perspectival Considerations)

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.

  1. 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).
  2. 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).
  3. The structure off the top of the market has been especially choppy, perhaps too much so for a real bear market.
  4. 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.
  5. 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.
  6. 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:

SPX

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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.


What Other Evidence Can We look At?

Let’s look at another thought, too. The other day, I pointed out these triangles. They looked great. Let’s review one of them ($AMC). When I made that post, we were at the tip of the red arrow. And it looked great there. We had 5 waves up for green “C.” But, we didn’t break down. However, we’re not invalidated yet, as we’re also at a great fib here. What if “C” is right here instead?

AMC

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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.


These Triangle Structures You See Everywhere Are Likely to Fail

I will show two examples (for $AMC and $TSLA), but they exist on many instruments.

$AMC looks like this:

AMC

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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.


$AMC Bounce Targets, Speculative

There are some structures around this stock. I may be able to go into them in greater detail later, but I want to get this out in a timely manner.

It’s stretched here, and due for a snapback. It may target either or both of these two trend lines:

AMC

A stop (mental or otherwise) under today’s lows or so should be good.


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.


Revisiting $AMC from a Bullish Perspective

About halfway through this long article defending the bear case, I discussed the possibility that $AMC was in distribution. Part of that analysis depended on the unlikely way of counting the structure impulsively.

But now let me demonstrate to you the power of recognizing that many individual names may be in—strictly speaking—corrective structures, and yet still go way, way up. $AMC happens to be an excellent example.

Here are the charts on this stock from that article.

Point #1: it’s impossible to count it with any integrity as an impulse to the upside. If we’re in some kind of four, it’s just much, much, much too big here in time. It should have lifted off ages ago and it hasn’t.

AMC

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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.


The Great Bear Case

The gamma squeeze, “cubic function” look to the last rally has given me great pause. I have spent a good deal of time thinking about it. I have shared my basic conclusions about it with you already, namely, that it may very well turn out to have been a finishing move, rather than a beginning move (I’ve discussed that here, for instance). But I am now increasingly concerned (excited?) that it may have been the finishing move.

And in fact, in answer to the question “Why on Earth did we go up like that?” I think the answer is essentially this: I think that was the total, utter, final capitulation of the bears.

I am going to run through a whole bunch of things in this article, just laying out pieces of evidence and observations. It is not my intention to sell you on the bear case; rather it’s a truth-telling expedition, in my opinion. I believe strongly in the bear case here, and I will share what I believe is the truth of the market. But it’s not my intention to persuade you, rather, to express what I feel is true.

Read more “The Great Bear Case”


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.


$AMC Retracement May Mean Wave 2 Is Early

I know, I know, it’s ridiculous to call this in a market panic, but I have to call it as i see it. Last discussed here, I have been looking for $AMC to complete a 5-wave cycle and it may have early. The pullback today has reached a perfect retracement level and has just the right “look.” My target is now the orange box above.

AMC


[UPDATE]: This now looks like “5 down and 3 up,” and I don’t like it. That’s not what I would expect here in the bullish count. I am cancelling this call while we are still in the neighborhood of the orange box. I will need to monitor the price action from here for a bit prior to making another call.

AMC


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.


$AMC Creepily Hitting My Targets, A Couple of Short-Term Projections

While the indexes are busy frustrating me, $AMC continues to respect my fib levels well. I was expecting a minute (blue) 4 to emerge, which should be followed by at least a nominal new high. We’ve come into the target range for that twice now, which is good, because wave fours often look like h’s. Here’s the picture if the count is right: we would expect some new high (I don’t have good target for that, and it can extend as far as it wants to) but that should be followed by a deeper pullback.

The alternative here is that my blue 3 is the blue 5 and the probability of that would increase if it found no support here.

AMC

 


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.