Tuesday, August 30, 2016

'Ooh F' pattern

There is this pattern on Russell 2K weekly that beautifully fits in the big picture. I call it "Ohh F' pattern which completes at the point 'F'

We saw it in 2007 before the great recession but it was relatively small in size. Now, considering the CB interventions, understandably it got bigger, and its product will probably be big too if it works.

But the strange thing is, if the current pattern mimics the one from 2007 time-wise, we should see the final high right before the elections in early October or September. In other words we may have one more month of this sleazy choppiness before the fun begins but I doubt if the big money risks it that long


Russell 2K weekly



Wednesday, August 3, 2016

Long Term Megaphone

It's been a while since my last update. With Brexit and other CB related BS behind us, let me give you our perspective as to where we are now.

We have been in an intermediate term uptrend since Feb 2016 low, this uptrend was briefly interrupted by Brexit event which we used to cover all our short positions that we had opened at much higher prices. Our exit was ES 1983 which turned out to be the absolute bottom.




 Since then we have been trading short term moves but we think this whole intermediate term move is coming to an end.
 
 Since early 2014, major US indices have been forming long term tops. Their long term momentum already turned , price will follow like night follows day.  There are many sectors and sub-sectors that are already in bear market. It is only a few large cap names camouflaging the underlying broad weakness.


Dow Jones Ind. Monthly backtesting the megaphone top

Transportation Index Monthly broke inside the long term channel
 

 Transportation Index weekly

Investment Banks, Brokers and Dealers weekly, backtesting the broken bull market channel

Russell 2K small cap Index weekly backtesting the broken bull market channel

 Financials weekly backtesting the midline, headed to the channel support

 JPM weekly

Value Line Geo monthly sowing the real picture

 Value Line Geo weekly

And many European and Asian markets are already in bear market


Germany weekly 

China ETF

Europe 600 weekly

France weekly 

It is still early to call for a large intermediate term sell off but we are in a swing down move that may last for a few days. After this short term move, we may see marginal new highs on SPX but that's the best case scenario. The next intermediate term sell off will be worse than anything you have seen since March 2009 because weekly and monthly charts suggest that the next down cycle will be enormous and very powerful especially for those markets and indices  that are broken (C wave).