In the past two weeks, markets gapped down on Monday and went lower. so will third time be different?
SPX: this chart is posted here two weeks ago when market is at the cross of red & green lines and I said I do not believe market has the strength to take out so many resistance level without a pullback. now top is already in for the market and we can go down dramatically from here anytime. the best case for bull is to retest the red line and kiss bye from there; good case for bear is we start falling from here right on Monday.
Market will retest March 666 lows at least in this down wave. this may sounds ridiculous for many, but i am so get used to this… i shared this idea with a friend in a wedding last weekend at his request, then the whole talk after that become his bullish announcement. He tried to save me from potential huge loss and convince me how good opportunity it is right now to buy and hold BAC and WFC for next 5 years. I really do not have as much “facts” as he is having, like Obama policy, 401K effect, investor confidence level etc… my only evidence is my chart. my chart told me at the end of the Feb that a huge rebound is coming while all the “facts” are saying market will never look back… now my chart is saying financial sector will be very bloody again in the next few months and at least a few top 20 commercial banks will be removed from the trading list (nationalized).
let’s just take a look at XLF: XLF again finished the topping process a few weeks before the SPX and now is kicking off the start of wave 5. Since wave 4 only retraces a small percentage of wave 3, i expect wave 5 will not be a truncated wave and at least take out the previous low.
institution ACC/DIS chart is indicating something dramatic is coming… the red line could jump very high from here…
5 Good Insights:
Just found you website and I like what I see. We are in agreement as to the major trend but wary of the timing.
I know FAZ as a 3X short of the financials is considered best for trading and not holding, but what are your thoughts about picking up some FAZ in anticipation of a huge drop by the Fall?
Flatlander,
FAZ is not a good holding in zigzag trading days due to its compound decaying factor. however it's good to trade it in a trend market.
I believe FAZ will at least see 20 in three month and I will not be surprised if it passes 50 or even higher...
From your mouth to the ears of the market gods! Great site. Many thanks for sharing your work.
Great work. I have been reading for a few weeks. It is a great help to see the big picture.
I saw a chart of 1929 on showing a stairstep down to the bottom and think because this is a major kondrakieff time, we will see a similar pattern.
Many other TA blogs see a bounce at resistance around 880 and 840. In the future, do you see yourself giving charts addressing the more immediate future, in this choppy market?
Considering FAZ is doing a reverse split this week (10 to 1 I think) how high do you think it can go?
Thanks
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