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September already here in the Far East. I thought I’d start off this thread with my long term game plan chart (attached).
As you know, it has always been my feeling that we are in the 5th wave of a very long term bull market that started in 1906 or 1932. Bull markets often end in a 5th wave ‘rising wedge’ and that’s what I’ve been looking for. The first upwards wave of the wedge needs to be a c=a for ‘A’. We get that at Dow 27,000.
So I was right!
But I was also wrong!
I’m wrong because this isn’t ‘A’. This is just ‘a’ of abc that gets to ‘A’. We had ‘a’ to 27,000, then ‘b’, now we need ‘c’ upwards to take us to ‘A’. ‘c’ upwards has started and has a target of 34,000 or so (see chart).
A warning that something was wrong was given by the momentum oscillators RSI and MACD – they recorded higher highs at 27,000 which shouldn’t have happened. The higher highs give a warning that new price highs are needed with divergence.
So we’ve had only ‘a’ and ‘b’. Now we get ‘c’ to 34,000. It started at the December low. Wave 1 has completed, now in expanded flat 2.
Lets talk about time. In the Welles Wilder Delta book he says that ‘markets repeat or invert every four lunar years’. I went back to 1999 to check this theory, and broadly speaking it is correct. I’ve shown the ‘correction periods’ of 2011 and 2015 on the chart. Now we are in 2019. Note that the two previous correction periods lasted several months. If markets ‘repeat’ then that’s what we’ll get again.
The next ‘four year lunar cycle’ ends in 2023/4. I suspect we will get the ending of ‘A’ at 34,000 around that time followed by a big correction for ‘B’ (see chart).
Long term theory. Might be right, or wrong. Only time will tell.
I follow two Dow models 1987 and 2007 and both
agree that we should have a drop very soon.The astros are almost exactly as in 1987 with
it’s high in August and big drop in October.In 2007 we got a drop and then new ath’s and
a big drop in October.My own model has a drop very soon to 24500
Hence I will remain short from Dow 26400
and see how low we go.I will look at the next move after that.
Never give up, never surrender.
I am encouraged by the fact that both hatman
and I have a drop to the Dow 24500 zone.On several occasions recently when we agree
these things do come to pass. Atleast near
enough to permit profits.Never give up, never surrender.
DOW: I’ve prepared this chart (attached) for the coming week. The upwards ‘five’ needs to complete. I suppose it has two options – a sudden jump upwards Tuesday and an equally sudden reversal, or a bit more of wave 4 to go followed by a more leisurely ‘rising diagonal’ that might need all week to complete.
I have a feeling the ‘sudden jump and reversal might happen, but I’ll just wait and see. I want to be short in the expected top area of 26625/50. SPX 2951.
SPX: on the SPX daily chart I’m projecting a sideways triangle lasting the entire month of September then resolving downwards. Clearly this is just a guess based on information available. The market can just as easily give way completely and dive towards the 2671 target. But for the moment my main guess is the triangle.
We need to think about TIME. The new high recorded Friday took nearly one month from the first plunge low. If that represents wave ‘a’ of a triangle, then wave ‘b’ might also need time. Yes, it can collapse all-of-a-sudden. But perhaps a more reasonable expectation would be a three wave decline using up three STD cycles – that would translate into a first drop, a bounce, then a final drop. The first drop might fill the gap at 2890.
Also on the daily (for SPX but not the DOW) there’s a sequence of rising lows (four in total) and that trendline (blue) would be a logical target.
Korea KOSPI: I’ve updated my medium term Kospi chart. Kospi rallied with the US Indices and that has changed the shape of the potential sideways triangle for wave (iv) of iii (of 3). I’m now assuming that Kospi will continue to form the sideways triangle for most of September (see chart) before finally giving way to the downside in early October.
My assumption is that Kospi and the US Indices will broadly follow the same path downwards. This might be entirely wrong of course – Korea now has its own trade problems with Japan and China so Kospi might ‘do its own thing’. Still, for the time being I’m using Kospi as a ‘guide’ to what to expect from SPX and DOW.
Cheers hatman
Small short Dow at 26300
Just in case we follow Dow futures which hit 26150 zone
Never give up, never surrender.
I have shorted 26300 and closed for small profits a few
times today and now wait for Dow futures to reach 26300
once again at which point I will short and hold into
the tuesday Dow cash market.Never give up, never surrender.
Small short Dow at 26300 … stop 27500 … limit 24500
Never give up, never surrender.
Small short Dow at 26300 … stop 27500 … limit 24500
Closed at 26160
Never give up, never surrender.
Odds are a UK General Election will be called this week.
That knocks the pound Ftse Dax Cac etc as there is no way
to know what party would be in power.Brexit or the terms are up in the air, again.
Tuesday we see how US cash markets react.
Never give up, never surrender.
Small short Dow at 26200 … stop 27500 … limit 24500 ( x 1 )
Just a single trade as the entry point is not one I would
have chosen but it gives me a foot in the door.If possible I will add at 26300 26400 26500 26600 if I do
get the chance.Never give up, never surrender.
DOW: I don’t have anything to add to my weekend comments. I’ll repost my projection chart for this week (attached). As I see it there are basically two options – a sharp sudden ramp into the target zone on Tuesday (followed by an immediate reversal) or a slow grind upwards that might need the entire week to complete.
I don’t have any positions – I’m waiting for the opportunity to go short again in the target area of 26625/50 (SPX 2951).
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