S&P 500… Almost Too Perfect

The situation is playing out almost exactly to the plan that NFTRH established when SPX chose to hop over the the Bull Turnstile rather than halt for a second time at the top line of the weekly chart’s Reverse Symmetrical Triangle. At the time daily chart bullish Ascending Triangles were also in play and they won out.

The plan is and has been that SPX would go on to close out the Christmas Eve massacre of 2018, when man and probably more so machine tanked the market into an unsustainable low in price and sentiment. I was buying (albeit not enough in hindsight) that day. Now, when I talk about closing out Christmas Eve 2018 with an opposite 2019 event I don’t mean exactly to the day! That would be too perfect. But the damn thing is setting up so that could actually be possible.


Instead I am allowing for Q1 2020 and in some global asset markets, especially those dependent upon inflation expectations, possibly H1 2020.

Anyway, here’s an alternate weekly chart we used in NFTRH to think about whether SPX would stop at target #1 (3200, which as of yesterday is in the books) or keep on going to the extreme pattern measurement over 3500. The blue shaded box is what I consider the mid-range of the post-2017 market and 3200 is an equal extension upward from it to Christmas Eve 2018’s downward extension. 3500, as noted above, is the rough measured objective of the pattern’s bottom at 2346 to its top around 2950.


Meanwhile, market sentiment blew off to incredible extremes in January of 2018. That was the sentiment event. While the market is higher now this blow off does not need to approach those nosebleed over bullish levels. It just needs to hit garden variety extremes and eventually flame out of its own bloat.

Now, I realize I am talking negative much like a bear. But I am short absolutely nothing other than long-term Treasury bonds against my long position in short-term bond fund SHY. It’s my home cooked yield curve steepener [edit] profits taken on these most recent TBT positions today as I have enough other positions that would benefit from a continued rise in yields. I am long (but balanced, with precious metals and cash equiv.), yet I am aware of the elements in play here. It’s day to day, week to week now. Evaluation and reevaluation is what’s needed from several different vantage points. Profit taking is legal and I am surely going to do some. And soon.

But aside from that, the thing is coming together almost too perfectly. It’s creepy.

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