Some Weekend Thoughts Before the Abyss: Bear Porn Edition

I just want to organize a few thoughts this weekend. And I would like to say something obvious, something that should go without saying, but I want to make sure some folks aren’t upset.


I have been open to bullish outcomes for much of this year. Why? Well, it’s because I’ve lived through rate hike cycles before, and usually they’re not quite this bad (in fact this is by far the worst in history). And I also know that, historically, “technical” bear markets are just as common as long-lasting bear markets that go much deeper. And in April in particular, sentiment deteriorated so sharply that I became alive to the possibility that we may have been much closer to a bottom than I had at first believed possible. And so I wanted to remain open to that possibility—that the bottom could be at hand. Now I am changing my mind here in the short-term, but it’s almost entirely due to technical reasons. There are structures forming in the markets that are almost certainly very bearish. And I want to respond to those. So, I’m not trying to be edgy, or cute, or flip-floppy; I’m simply acknowledging that bear flags are bear flags until they are not. And many of these are well-defined. In fact, all year, one thing we have lacked is really good bearish structure on the way down. And now we have them, so we should pay special attention.


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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 months), 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, Tier 1 members ($20/mo.) get access to the articles, Tier 2 members ($35/mo.) get access to those, plus counts on about 20 other instruments, plus Discord server access.


Behold, the Structures on Tech: $AAPL, $GOOGL & $MSFT

This has been a shit show. But, I’m feeling very optimistic tonight. It’s been very difficult looking for the low. However, in reviewing things this weekend, I am amazed by how many individual names made higher lows while big tech made new lows. That is very bullish, for the markets to support less important names like that. And in virtually all of the cases where those higher lows have been made, the rallies have been impulse waves.

For example, let’s look at $ADBE, which I have just added to my “Other Selected Counts” page. A beautiful, 5-wave impulse up, and a clear 3-waves back. The rally up from the 5/12 low had no overlapping waves, and with the rally today, the move since the 5/17 high now has overlapping waves. So, it’s an impulse up and a correction back. That means the trend is now up.

ADBE

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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 months), 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, Tier 1 members ($20/mo.) get access to the articles, Tier 2 members ($35/mo.) get access to those, plus counts on about 20 other instruments, plus Discord server access.


Weekend Observations on the Stock Market: Bear Porn Edition

Though I have been determined to give the bulls the benefit of the doubt for as long as possible (bubbles can go on far longer than most of us can think is even sane), cracks first appeared, and now there are plenty of additional outright crevices at this point.

Let’s look at a variety of things.

My working hypothesis for the moment is that the S&P 500 may be forming a large bear wedge, perhaps even replicating the one found at the top of the dot-com bubble (discussed here, for instance). And so far, the rejection of 4600 continues to support that thought:

ES

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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 months), 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, Tier 1 members ($20/mo.) get access to the articles, Tier 2 members ($35/mo.) get access to those, plus counts on about 20 other instruments, plus Discord server access.


$GOOGL Wave Three Target

As an update to my last post here, there is now enough wave structure on $GOOGL to generate a wave 3 target, which I have noted with the orange box above us. Also, note the inverse that has formed.

GOOGL

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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 months), 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, Tier 1 members ($20/mo.) get access to the articles, Tier 2 members ($35/mo.) get access to those, plus counts on about 20 other instruments, plus Discord server access.


A $GOOGL Update

A quick recap on $GOOGL:

  • In this post, I interpreted $GOOGL bullishly. That call is still live, though it’s obviously taking longer to come about.
  • In this post, I anticipated the bounce to blue b, and we got that, and I also then suggested we may go lower again, and we got that, too.

So far, so good. Where do we stand now? The blue c I needed here needed to be a 5-wave impulse and that’s just what it looks like to me. There is a good chance that the correction is now over. (We are in the expected range for a wave 4 of this degree: big orange box.)

As readers of this post from earlier may note, I expect the indices to breathe first up, and then down, with $QQQ taking out its low on the next leg down. But $GOOGL need not take out its low as the pattern looks complete. So that breath may become its first impulse wave, blue one and two as I have it labelled here below (ignore their placement in time and price; I’ve stuck them on there merely as placeholders).

Once those materialize, I will be able to generate a target for blue 3.

GOOGL


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 months), 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, Tier 1 members ($20/mo.) get access to the articles, Tier 2 members ($35/mo.) get access to those, plus counts on about 20 other instruments, plus Discord server access.


The Bearish Interpretation of $GOOGL

This is what the bearish interpretation of $GOOGL would look like. If today is a low, it would interpret today’s move as a deep underthrow of a leading diagonal, after which we may expect a bounce to blue b. If the move from here to there is a clear impulse wave, I would have greater confidence that today was a low of significance. If the move is a choppy, 3-wave corrective move, then we may expect another leg down that would carry us at least to blue c.

GOOGL

My bias remains bullish here; I am only posting this alternative as a hypothetical thought. This will be filed under observations because I am not calling for this in particular.

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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 months), 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, Tier 1 members ($20/mo.) get access to the articles, Tier 2 members ($35/mo.) get access to those, plus counts on about 20 other instruments, plus Discord server access.


$GOOGL Bullish Structure and Target

A breakout of this bull flag on $GOOGL targets the orange box.

GOOGL


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 months), 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, Tier 1 members ($20/mo.) get access to the articles, Tier 2 members ($35/mo.) get access to those, plus counts on about 20 other instruments, plus Discord server access.