Hussman has great article today on the pervasive signs of this bubble. How much longer can the Fed continue this madness? They are running out of excuses.
There have been 23 items by Morpheus (Search limited from 23-May 17)
Looking at the Dow components I see most in two categories:
1) Since 2009 low have formed steady parabolic uptrends :MMM, HD,MSFT,UNH,V,JNJ, JPM [GS, IBM,NKE along with the biotechs also but they broke down in 2015]
2) Late Rally Gang with sloppy uptrends since 2009 but in early 2016 took off (many in smaller parabolas now):AXP, APPL,CAT,CSCO,DWDP,MCD,PG, WMT,CHV
Here are 3 charts: MSFT and UNH from group 1 along with the BTK biotech parabola that busted in 2015, now wedging up to a second TOP. My point is these parabolic trends always end as they approach a vertical trajectory with a distinct blow off which is what I believe we are experiencing now.
There is a 5-wave bearish wedge in SP since 2009 low that is completing. A final blow off vertically out of the wedge is not uncommon, we could see something pretty spectacular here by years end, likely a success in tax reform would be attributed as the cause. If this plays out EW says a return to the wedge origin occurs rapidly meaning a "Super crash" starting in 2018
I don't really see the trend slowing on either weekly log charts of SP and Dow, most IT oscillators I use are overbought but not weakening or diverging. Dow is at top of its uptrend channel however and SP in the middle. Since the early '16 low you probably know a lot of the measures of market internals have been lousy and getting much worse along with record low volatility and record highs in sentiment indicators. To me this feels a lot like '99 again, we have had another lengthy expansion like under Clinton, it just didn't feel quite the same since we had to climb out of such a big hole but Trumptimism's irrational exhuberance is now on full display!
Really pouring over the charts today. Energy sector looks sickly, XOM ready to get dumped like Tillerson. The momo stocks FANG,NDX,COMP,BTK, etc at marginal new highs but everything else is well below early Feb highs including BKX as well as most foreign markets. I am with Doc, this looks like it is the grand finale luring in the last of the suckers. Watching the VIX dry up and how the DOW pattern unfolds on smaller timeframes at the end of this thing and expect boring week coming up, not quite ripe. Should offer very juicy trading when it does make the break!
We could see the start of a substantial sell off Monday, probably. (one slightly more degree of positive than maybe)
I can't help but notice the Dow is a textbook Elliott contracting triangle The common move out is equal to the base (wave a ) and that would take us right to the upper channel trendline of the entire bull market from 2009 on monthly semi-log chart. A non-limiting feature in this triangle indicates it has a good likelihood of going further. Each wave is in precise Fibonacci ratio to the base wave a: b=.68a, c=.50a d=.38a. You don't see them with such perfect fractal symmetry very often. The bad news is with a triangle in this position the complete move down can only be seen as much larger degree A, not as bearish if it were a Wave 3 with massive impulsive structure. But first things first. I will be using that bottom trendline of the triangle to trigger a short position trade. I am comfortably retired and not privy to daytrading especially when the weather is nice out but sometimes I like to play the biotechs intraday when the market has got a solid intermediate trend going. Good luck trading everyone. I am becoming much more concerned about the escalating chaos within our White House than the markets. I have never witnessed anything like this in my lifetime and I have lived through an awful lot of shit!
Failure to launch! Stopped out even at Dow 24,780. Appears wave d extended itself and dropped the lower trendline of the triangle so it is not as pretty but it still is intact for a future potential pattern trade. I didn't like that the original e-wave was so short in time and price. E-waves typically are long, choppy and often consolidate pricewise in the half of the triangle they are going to eventually break through. Most of the other indices were not positioned in patterns with important support to break through so I am not surprised by this outcome. It was a low risk short set up. I think this market has a more work to do before any big move. I see corrective patterns still unfolding so there is good reason to believe we are in topping process that will eventually break down. Good Luck Out there. Madness you continue to amaze me with your trading! Now out to go bicycling and drone flying!!
Biotechs in a choppy B-wave channel working upwards for 2 years after a parabolic 5 wave bull market exhausted and the first bear market wave A going down into the wave 4 price area and testing the exact 50% retracement level. Very B-wave like action here, choppy and channeling. Before the next big wave down © this needs to go back to the bottom of the channel. Looks like already they may be on their way. Worth keeping an eye on that lower channel trend line and how the other indices patterns are positioned!
I missed the train yesterday, helping my brother with some projects. Here is a chart of WTIC to ponder while we wait to see which way this breaks today. The 14-16 collapse, a nice 5 wave down has retraced to .50 with an A-B-C up. So far it is holding here. The XLE has diverged recently from following crude closely and has plummeted the past few weeks, it was one of the bigger losers yesterday.
Unfortunately I can't get the quote function to work on my system and that is why you don't see me use it. Anyhow glad I am of some use here zero-v! Jorma my sister is remodeling her bathroom and she is installing a toilet from Kohler that indeed is wifi connected, don't know if apple has an i-Crap yet
IBB is pretty much tracking QQQ so far too, but when we get to the supercrash, and the biotechs break the bottom of that gigantic channel up since 2015 I expect them to outperform as they did in wave A down! I wish things were always as clean and easy as this trendline support break on IBB today!
Biotechs have been consolidating below their 200DMA already and it looks like we are finally going to leave behind that support band and the 3 year B-wave channel up. Still leading the Dow,NDX.SP today in loss. Watching closely for them to help guide the bear downward! Been playing BIS today as usual.
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