Here's the scenario I discussed in Thursday's newsletter but I
didn't market it up. Because of the daily symmetry break there is
higher odds now of a lower high forming. Under this scenario the
move down could be wave A, and we are unfolding in an abc bounce to
complete wave B lower high (supported by the symmetry break) and
once that's complete a move down for wave C. If you recall, we've
been showing such a scenario on the weekly QQQ's, see the last
chart
Wave B's often retrace 50% to 61.8%, however they can retrace
more than that and with the market one thing Steve and I have
noticed is that moves are more exaggerated these days. A move
down could take the SPX back to that long term support and demand
zone
$SPX - Chart Link weekly chart, if the
wave count is correct, basically once this wave B is over, you get
a move down to those major support zones
$SPX - Chart Link - this daily chart is
interesting, that broken trendline is another area that could be
retested if the SPX did a larger retracement than a 61.8% fib -
perhaps retest that trendline
QQQ - Chart Link - here's that weekly
QQQ's chart that we've been showing since last fall - this
basically shows the same scenario
the daily KISS charts with the MA ribbon also for now favor the
scenario I laid out. Notice MA ribbon is pinching from the
underside and price is coming up underside of the 50 MA and ATR - I
think one of those areas will offer resistance
what would trigger the KISS daily SPX and QQQ's to go back long?
Right from there you would have to have price go well above the ATR
on a closing basis.
that said, if this wave B lower high scenario plays out, the
KISS system then has an opportunity to long after the wave C
decline and then the ABC buy conditions may kick in that would
allow these to go back long just 2 or 3 days off the lows. ABC's
and washout longs are my favorite triggers on the KISS
My only skeptical comment would be regarding timing. I would
expect the Fed to do what they need to, to keep the market propped
up until the election in November. I realize that has nothing to do
with TA, but it may affect the markets. I recall brophy’s
post about presidential election cycles.
it's one option that is valid and would fit the the symmetry
breaks for a lower high B wave, and the typical weakness this time
of the year, the sell in April/May go away, there are other options
of course that would lead to a new high right away.
Regarding the Fed, the problem with that is how do you trade
that info? You can't, what are the trade triggers from that info ,
and it's not hard info or facts, it's just some speculation?
To me the Fed has been pretty steadfast on rates even walking
back there earlier in the year optimism about possible cuts, and of
course they have to be extremely careful not to raise and cause a
run away inflation.
again all we can do is analyze the charts, and respond to what
happens and our triggers: As we always say
Project/Analyze, then monitor, and adjust to what happens
Posted by DigiNomad on 28th of Apr 2024 at 10:29 pm
The fed is in the backseat now anyway. We have transitioned into
fiscal dominance. We're just so used to following the Feds moves to
inform our thoughts about potential future market direction and old
habits die hard. Not many have alive have traded through a period
of fiscal dominance (even fewer even realize we've switched)
and this one is looking to be like no other...the 40's will
be the nearest analog.
Given the lack of historical analogue for this unprecedented
dominance, I wouldn't be surprised if the market doesn't follow
historical norms. We've already seen hints at disconnects (remember
when we blew through 4600 like it's wasn't even there?). I think
we're much more likely to act like an emerging market going
forward. That would include maybe a messy crash type event here
shortly, but the following YCC intervention will most likely lead
to a rally like has never been seen in the US. Asset prices are
likely to go through the roof...Zimbabwe style. We could even skip
the whole crash part and just start accelerating higher. It kind of
depends on when they turn on YCC type measures (which the Fed will
be forced into because they are being dominated by the fiscal
side).
SPX and one scenario the abc
Posted by matt on 26th of Apr 2024 at 09:19 pm
Here's the scenario I discussed in Thursday's newsletter but I didn't market it up. Because of the daily symmetry break there is higher odds now of a lower high forming. Under this scenario the move down could be wave A, and we are unfolding in an abc bounce to complete wave B lower high (supported by the symmetry break) and once that's complete a move down for wave C. If you recall, we've been showing such a scenario on the weekly QQQ's, see the last chart
Wave B's often retrace 50% to 61.8%, however they can retrace more than that and with the market one thing Steve and I have noticed is that moves are more exaggerated these days. A move down could take the SPX back to that long term support and demand zone
$SPX - Chart Link shows the scenario on the daily SPX
SPY - Chart Link same scenario but on the SPY
$SPX - Chart Link weekly chart, if the wave count is correct, basically once this wave B is over, you get a move down to those major support zones
$SPX - Chart Link - this daily chart is interesting, that broken trendline is another area that could be retested if the SPX did a larger retracement than a 61.8% fib - perhaps retest that trendline
QQQ - Chart Link - here's that weekly QQQ's chart that we've been showing since last fall - this basically shows the same scenario
Really nice charts, thanks.
Posted by pintopower on 28th of Apr 2024 at 08:12 pm
Really nice charts, thanks.
the daily KISS charts with
Posted by matt on 28th of Apr 2024 at 11:29 am
the daily KISS charts with the MA ribbon also for now favor the scenario I laid out. Notice MA ribbon is pinching from the underside and price is coming up underside of the 50 MA and ATR - I think one of those areas will offer resistance
what would trigger the KISS daily SPX and QQQ's to go back long? Right from there you would have to have price go well above the ATR on a closing basis.
that said, if this wave B lower high scenario plays out, the KISS system then has an opportunity to long after the wave C decline and then the ABC buy conditions may kick in that would allow these to go back long just 2 or 3 days off the lows. ABC's and washout longs are my favorite triggers on the KISS
This matches up with my
Posted by jonesy85 on 27th of Apr 2024 at 04:50 pm
This matches up with my cycle man Stan Harley. Called the recent correction, now bounce into mid month and we roll over again.
My only skeptical comment would
Posted by mdgfain on 27th of Apr 2024 at 10:02 am
My only skeptical comment would be regarding timing. I would expect the Fed to do what they need to, to keep the market propped up until the election in November. I realize that has nothing to do with TA, but it may affect the markets. I recall brophy’s post about presidential election cycles.
it's one option that is
Posted by matt on 27th of Apr 2024 at 11:40 am
it's one option that is valid and would fit the the symmetry breaks for a lower high B wave, and the typical weakness this time of the year, the sell in April/May go away, there are other options of course that would lead to a new high right away.
Regarding the Fed, the problem with that is how do you trade that info? You can't, what are the trade triggers from that info , and it's not hard info or facts, it's just some speculation? To me the Fed has been pretty steadfast on rates even walking back there earlier in the year optimism about possible cuts, and of course they have to be extremely careful not to raise and cause a run away inflation.
again all we can do is analyze the charts, and respond to what happens and our triggers: As we always say
Project/Analyze, then monitor, and adjust to what happens
The fed is in the
Posted by DigiNomad on 28th of Apr 2024 at 10:29 pm
The fed is in the backseat now anyway. We have transitioned into fiscal dominance. We're just so used to following the Feds moves to inform our thoughts about potential future market direction and old habits die hard. Not many have alive have traded through a period of fiscal dominance (even fewer even realize we've switched) and this one is looking to be like no other...the 40's will be the nearest analog.
Given the lack of historical analogue for this unprecedented dominance, I wouldn't be surprised if the market doesn't follow historical norms. We've already seen hints at disconnects (remember when we blew through 4600 like it's wasn't even there?). I think we're much more likely to act like an emerging market going forward. That would include maybe a messy crash type event here shortly, but the following YCC intervention will most likely lead to a rally like has never been seen in the US. Asset prices are likely to go through the roof...Zimbabwe style. We could even skip the whole crash part and just start accelerating higher. It kind of depends on when they turn on YCC type measures (which the Fed will be forced into because they are being dominated by the fiscal side).
QRA this week
Posted by steve on 29th of Apr 2024 at 08:18 am
QRA this week
Extremely helpful charts. Thanks for
Posted by mdgfain on 27th of Apr 2024 at 09:28 am
Extremely helpful charts. Thanks for the perspective and potential scenarios, Matt.