Year end reckoning?
I was messing around w/ the Gann Square and drew the 1/1 from the Feb 2018 low... and lo and behold a few things suddenly line up:
1) Each Gann interval appears to mark a local top in the index, starting w/ the Jan 18 top, then the Sep 18 top, and then the May 19 top. Do note this is a 4 day chart so the tops were put in +/- a week of the labeled intervals.
2) The 1/1 and 2/1 Gann lines appear to draw an expanding diagonal for all of 2019. This follows my theory that the 2019 rally is a mirror image of the 2018 selloff (which can also be drawn as an expanding diagonal down... most obvious on the NDX chart) Expanding diagonals are not well documented in EW theory but it would go a long way to explain how the wave from the Aug low can be a terminal ABC wave. (The fact that almost everybody believes the next dip is a buying opp and that an immediate higher high is inevitable has bothered me as of late)
It's also possible this is only wave 3 of the expanding diagonal should we actually go down to the 2/1 and bounce, with an eventual target of 3330 at the 1.618 extension(!).
3) The next Gann interval is scheduled for some time in the next week or so. On Dec 3 the HK human rights bill becomes law if Trump doesn't act on it. I don't expect him to veto the bill as it would a wildly unpopular act (and he is a populist after all). China has already publicly threatened "retaliation" and that the "US will bear all consequences" if the bill becomes law. (translated: if you ink that bill, it's your fault the trade deal fell apart)
Given that it's inevitable as Congress unanimously voted it in, I simply don't see how China can sign a trade deal if this bill becomes law... they're not known for bluffing and flip-flopping on public statements. On Dec 15 tariffs are also scheduled to go into effect if there is no deal. Let's not forget that in May when everything fell apart speculation was that a deal was to be signed within a week.
The index is bumping up against the TL from the 2007 top. I expect it to pump past this line and tap the 1/1 Gann line in a move of ultimate bear capitulation. The buying is full-on ponzi frenzy fomo whatever you wanna call it with repeated parabolic end of day moves. The low volume madness of these moves feel a lot like the selling around the xmas lows... we all know how that turned out after everybody returned from the holidays. Could the inverse happen next week?
Currently looking for VIX to tap 11, GOLD to put in a lower low at 1445-1438. Jan 17 2020 put spreads. And clearly if there is there is trade war escalation, that should confirm it.
1) Each Gann interval appears to mark a local top in the index, starting w/ the Jan 18 top, then the Sep 18 top, and then the May 19 top. Do note this is a 4 day chart so the tops were put in +/- a week of the labeled intervals.
2) The 1/1 and 2/1 Gann lines appear to draw an expanding diagonal for all of 2019. This follows my theory that the 2019 rally is a mirror image of the 2018 selloff (which can also be drawn as an expanding diagonal down... most obvious on the NDX chart) Expanding diagonals are not well documented in EW theory but it would go a long way to explain how the wave from the Aug low can be a terminal ABC wave. (The fact that almost everybody believes the next dip is a buying opp and that an immediate higher high is inevitable has bothered me as of late)
It's also possible this is only wave 3 of the expanding diagonal should we actually go down to the 2/1 and bounce, with an eventual target of 3330 at the 1.618 extension(!).
3) The next Gann interval is scheduled for some time in the next week or so. On Dec 3 the HK human rights bill becomes law if Trump doesn't act on it. I don't expect him to veto the bill as it would a wildly unpopular act (and he is a populist after all). China has already publicly threatened "retaliation" and that the "US will bear all consequences" if the bill becomes law. (translated: if you ink that bill, it's your fault the trade deal fell apart)
Given that it's inevitable as Congress unanimously voted it in, I simply don't see how China can sign a trade deal if this bill becomes law... they're not known for bluffing and flip-flopping on public statements. On Dec 15 tariffs are also scheduled to go into effect if there is no deal. Let's not forget that in May when everything fell apart speculation was that a deal was to be signed within a week.
The index is bumping up against the TL from the 2007 top. I expect it to pump past this line and tap the 1/1 Gann line in a move of ultimate bear capitulation. The buying is full-on ponzi frenzy fomo whatever you wanna call it with repeated parabolic end of day moves. The low volume madness of these moves feel a lot like the selling around the xmas lows... we all know how that turned out after everybody returned from the holidays. Could the inverse happen next week?
Currently looking for VIX to tap 11, GOLD to put in a lower low at 1445-1438. Jan 17 2020 put spreads. And clearly if there is there is trade war escalation, that should confirm it.
הערה
Trump just signed the HK bill and futures just dumped all its "gains" from today... let's see how China responds.הערה
So I'm actually seeing articles proclaiming that the signing of the HK bill is BENEFICIAL to the trade deal, as well as ppl proclaiming that China has no economic manner to retaliate and is all out of options. Talk about the tail wagging the dog... btw if China is indeed backed into a corner, well... a dog backed into a corner is most likely to bite.I suspect minus any headlines over the wknd this thing to at a minimum retest the prev top. EW-wise looks like wave (iv) of v of 5 just finished today. Even if we tank on some sort of retaliation I expect denial to take us up to 3155 again. Should IMO touch that 1/1 Gann Line at least once I think before we turn around.
הערה
Was this the start of wave 1 down? Inconclusive. Stopped right at the top of wave (i) of the current wave so still could be (iv) and (v) to come for a higher high for that expected "denial rally".If we fall to around 3010 I will be in scalp mode and dump all weekly puts. Especially if this purple channel doesn't break (I dont' see this channel breaking until there's trade escalation). These tops always wind up as a bullish shark and you get pretty healthy retraces (.500 minimum). A higher high is definitely not out of the question... see the July top for reference.
הערה
Gotta feeling they're gonna pump the hell out it tonight and probably over the wknd... classic crook move @ 2pm to spike it down and trip stops for a ride up to 3140s. Expecting more regurgitated trade progress/optimism "news" in the coming days.הערה
Retesting the top of the Gann band resistance again now... adding a few more put spreads nothing extreme. I still think the recent selloff is a C for an expanded flat to finish wave (iv) and that we are in a (v)... which means most likely another ATH soon. BUT, I'm expecting some profit taking prior to the Dec 15 tariff deadline and that wknd will make or break the recent rally.הערה
As I suspected yesterday, they pumped it like crazy, guess somebody got a sneak peek at the jobs number. In this close-up you can see how the 1/1 line and the Gann band has been interacting w/ price action this wk to form this inverse H&S. Zoomed in to the weekly and you can see the next interval is due around the wk starting the 16th. The tariff deadline is scheduled for Dec 15th... I doubt this is coincidence. Also note if we do indeed selloff the week of the 16th, the absence of any Gann line beneath us until the next box at 2947.הערה
As expected we tapped that 1/1 Gann line one more time today on a higher high off that suspected expanded flat from end of Nov. We are now officially overbought on weekly RSI combined w/ very clear daily divergence. Notice the confluence of important fib levels from both a time and price perspective. The wild swings today combined w/ what looks like an imminent terminal wave 5 tells me any signed trade deal will be news that is going to be sold hard. הערה
I urge everybody tuned into the markets to take a good look at this article: zerohedge.com/markets/its-about-get-very-bad-repo-market-legend-predicts-market-crash-daysIt's a fairly technical read, but the short of it is that banks need to meet their cash reserves by end of year and the only way to do it is for them to sell off bonds and equities. I know what you're saying... it's just another ZH doomsday article. But then why are the Fed planning to pump another 500B (with a B) in the next month into the financial system?
This issue combined w/ the current inflated prices in equities where selling the news with a liquidity crunch is brewing the perfect cocktail for a selloff next week.
הערה
So China has promised to buy MOAR soy beans and as a result previously scheduled tariff increases are canceled... So everything's fine now right? But why does this sound so familiar? Oh yea... same thing happened when the S&P was at 2800 about 8 months ago: farmpolicynews.illinois.edu/2019/02/china-commits-to-buy-additional-u-s-soybeans-as-trade-talks-extend-into-the-weekend/
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