Saturday, May 18, 2013

SPX Weekly Chart 4-Week Parabolic Move Overbot Negative Divergence

The equity markets are possessed for the last month running vertically higher at a pace of about 30 SPX handles per week, about 6 handles per day, on average. The shorts have given up and the trades are on the bull side, taking profits selling to other bulls, who then rotate and take profits selling to other bulls reentering long. One big upside euphoric run higher. Note how price has jumped both the brown and blue upper trend lines. This price move is obviously not due to the weak economic data and top line revenue numbers weakening but rather the Fed and BOJ money-printing. The new asset bubbles in dividend stocks and high-yield instruments expand higher.

The red lines show the longer term negative divergence remaining in tact but the momentum of the last four weeks causes the RSI and MACD line to want to see another price high on the weekly basis before the roll over occurs. Projection is sideways to sideways down moving forward. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.


  1. But it's important to note: it's not a bubble. It's just, uh, natural... no, wait. It's a bubble.

  2. it won't get over 1700-1707 , so I've got a piece od advice for bulls: get your money out while you can, if not you'll cry in the most expensive napkins ever, equal to the value of your portfolio ... without a correction since Novemeber it's something quite mad to want to hold through the summer ... now, year to date, the spx 500 index marched 17-18 % and if you consider the period since novemeber 2012 the result is outstanding!
    Enough is enough, always tears are akin to greed.

    It's a matter of a few days/maybe 1-2 weeks until something terrible will appear.

    Don't you even dare to say you haven't been officially and directly warned!


  3. Hey guys, the Central Bank Psychotics of the U.S., Europe and Japan are running out of assets to buy! The Fed has been loading up with bonds that are not even issued by the U.S. Treasury Department. They're printing so much money that they can't find enough supplies of new bonds where they eventually buying 100% of the market..this is going to be some toxic assets Fed stuffing into the balance sheets. If they don't pull back now, we will soon revisit October 29, 1929. Pull back!! This is an order! NOW..!!

    1. why should they pull back?
      the parabolas are so fancy and so beautiful!
      all my life I've wished to experience 'live' what happened during 3 sept 1929 - 29 october 1929.

      why should it pull back? No, no need for pull back!
      Let it motor along the way! Hope it will get faster and higher! All those bears should all close their short positions and let this non-sense show in it's surreal appearance.

      I'm in cash, I'm not a loser to participate at this joke and get burned, but I'm not so courageous to short a parabola! So pay attention : short a PARABOLA, not a bullish up-trend! The difference is given by intermediate corrections during the bull up-thrust in a normal bullish trend!

      Everybody should realise that this is not a normal bullish trend, it's a genuine bubble!

      So, being in the market you should know in what thing your're squeezing your money!
      Nobody should shout and be furious when this thing will explode... some people never learn, not after 1998-2000, neither after 2007-2009 ...people never learn!

      Come on, go buy some hyper-overvalued stocks, repeat the historical cycles, it's only money after all ... :)

    2. V, you said all bears should close their shorts, but if market keeps running up without some kind of corrections, then those bears will lose a lot of money closing their positions now. I am sure those bears just want to have a chance to close their positions and switch to long or may be ride along with the Fed. Right?

    3. @ Anon:
      you're 100% right.
      it was just an rhetorical advice....not even an advice, opinion.

      Regarding the structurality and conditionality of a crash, the best, violent, correction appears when the volume of shorts in the market is very low/ inexistent, so not being assured the "support" levels by the shorts profit marking (executed by effective market buying at more lower levels, thus offering some kind of support).

      if no more bulls appear in the market and the volume of shorts is very low/ inexistent => if those 2 conditions are fully met, all we need is a little spark to start a great arson!

      "The arson" in it's development might met the logic of a self-fulfilling vicious circle: the last entered bulls seeing that there are no more "new bulls" to sustain price they sell in panic pressuring other bulls entered at lower levels to do the same. Thus , you have a mighty crash developed.
      These are the 2 conditions (or minimum 2):
      1= lowering level of new bulls (low participation)
      2= no/low level of shorts left alive in the market.
      3= high level of complacency (as KS has already noted)
      4= a very high level of overextended stock prices overstreched above their 150 MA and 200 MA (and this condition is fully met, with an indicator above 90!!! - as KS has already analyzed).
      5= upper boillinger band violated on weekly and monthly charts of spx 500.
      - might be also other conditions met that don't cross my mind right now.

      Ladies and gents,
      Almost all necessary conditions are met for a great, scary crash during the next 1-3 weeks. I say "almost" because some other conditions have to be met. But it's only a matter of days (1-2 weeks) until those conditions will be met. There are conditions related to a rise of complacency, related to daily volume, and related to some technical indicators (TRIX, TRIN, a more killing NYSI - I hope for more than 1200-1250 points here - and others).

      I'm not advocating for crashes, but I do advocate for a big punch in the eye of FED to learn to never mess again with the mechanisms of a free market, cause it's gonna come against them some day. MF communists! (sorry KS, I'm rude!, I couldn't help it! :D I promise to be polite from now on).
      If they are 'painting the tape' and manipulate the markets, they should do it like an artist, respecting the balance of forces in the market, with risings and controlled falls in the market - to give stability of the trend -, not like a grave-digger with a shovel, that keeps diggin' looking happily at the mountain of soil that keeps rising, but not looking at the hole that keeps getting deeper. And you can think at that hole as being the gap between a real market rise generated on fundamental economic conditions and a liquidity market rise with an economy where inflation might be picking up but where salaries stagnate or are getting lower. Thus the gap between the main street and the wall-street and the gap between stock market and the real economy is getting deeper and deeper.


      p.s. this message is not intending at all to instigate to buy shorts cause a crash is coming. Buying shorts would only "power-up" the bullish trend. But getting long here and now would be truly foolish!
      This message is written with the intention to understand the point where we are now and the risks associated with it.
      Smart people will undestand what I mean.
      Have some cash for the "after-hours" of crash - that's the best advice to give right now! Don't know exactly when it's coming, but it will come for sure!

    4. Hi V, Great advice!
      One thing you sure right about is the Fed changing the States into communism, using the market to control or take away our hard-working money.
      Okay, no more shorts and no more longs, let's all try to stay in cash, sit back and watch another waterfall, it's gonna be beautiful:)!

  4. Don't believe these clowns! Stay long. 1800 is next stop.
    Keybot is long. Need i say more?

    1. These are good news Sir!
      I'd like 1900 or 2000 or 2100 as next stop! :)!
      The higher it gets, the greater the "after-party" will be :)!
      You know, MA200 has it's rising speed limits, anyway!
      Go long-long-long, and learn to fly like in the cartoons, when support will suddendly disappear! :)

      p.s. Technical arguments define "clowns"? Hm! Good luck!

  5. Interesting stuff by all. Boil everything down to VIX 13.19. If the VIX stays under 13.19 it will be another happy week for bulls. If the VIX moves above 13.19, and stays above (not like the multiple teases last week all resulting in volatility collapsing) the bears will growl and have their turn at bat.

  6. The latest number for VIX, from Keybot, is 13.18. So use VIX 13.18 instead of 13.19.

  7. V. With all due respect I've seen many talk like you and ALL were wrong. Period. Nothing more to add. Trade the trend accordingly...

    1. :)
      All I'm noting is one possibility among others.
      Yes the trend is up, yes, the trend is strong.
      and , yes, the trend is old and full of complancency :)
      not calling tops(!), just pinpointing associated risks (that may trigger ...or not) to the almighty up trend.

  8. My preferred count of the NYSE: now targeting 2.0x extension of Minor 1, counted from Minor 2:

    Translated to SPX this suggest a top of Minor 5 of Int Med III of Major 3 at ~1680 +/- 10.

    I''d like to see a move down to 1640ish first for minute 4 then minute 5 to finish Minor 5 Down trend of Int. Med. IV to at least a retest of 1600 (hasn't happened yet and must happen for any new up move possible: regeneration; testing support) or as low as 1540 area (minor 4 and next higher degree 4th wave tends to move to previous lower degree 4th wave area). That be either a 5% to 10% correction. I prefer the latter as it would suck in many bears to fuel the next leg up to 1750s for Int. Med. V and thus major 3. Major 4, 5 and Primary IV and V are then left to finish bull market. But may not make new highs... GL!!
    Ps: longs be careful out there it's getting close IMHO.

    1. ''Ps: longs be careful out there it's getting close IMHO.''

      glad you've said it...

    2. ''Major 4, 5 and Primary IV and V are then left to finish bull market. But may not make new highs... GL!!''

      Can you please say more on this subject? Why major 5 of Primary III and/or Primary V would not make new highs?
      I can't figure out the possible reasons...

      Thank you,

    3. V. 5th waves tend to be truncated. Don't have to, bu likely are at the end of a multi year bull run. QE will likely be ended fall/winter as well. Market will by then run on fumes.

      Nothing personal, but my concern is that you are trying to put your will on the market; that's a dangerous and unsuccessful and expensive thing to do. Let it play out, be smart be patient, don't be frustrated.


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