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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Now Let’s Do $MSFT

As discussed here, generating a wave count for $MSFT is difficult because there’s just not a lot of structure. On the widest view, we only really have one “big” correction that is visible from outer space:

MSFT

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$MSFT Bullish Consolidation Target

Generating a reliable long-term wave count for $MSFT is virtually impossible given the perfectly exponential curve of its long-term trend. There are not enough big corrections to derive credible corrective waves of anything past Supercycle 2 (which seems clearly to be the move from the dot-com bubble bursting through the GFC). Everything past that seems like guessing to me. Everything after that is in some indeterminable wave 3 for which fib extensions are completely powerless to assist us.

For all we know, we are still only in the ones and twos of that 3.

We can, however, generate targets locally using basic structures and local fib extensions and zig-zag rules. A successful breakout of this consolidation should take us to the target box above:

MSFT

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Note: When my work is first published on this website, it is made available to patrons who support my work through my Patreon account. Over time (usually after a period of a few months), I make 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.