The pattern with the 10-year yields is a long-winded contracting triangle with breakout upside outlook. Today may be the beginning surge and then the talk will all be about interest and mortgage rates surging. Which is of course unsustainable for the economy, the consumer and our debt-laden governments at all levels.
And the short-term rates are holding steady. Powell cannot lower rates if the market tells him not to. The FED must set the short-term rate to what the market signals (best seen through the lens of the combined 3- and 6-month yields) otherwise interest rate distortion occurs which would be bad for the Fed which after all, is a private bank.
[Update 12:25 pm EST]
The market is making an interesting wedge pattern with “overthrow” at the top. Although this is not the primary count, I have to show it, nonetheless because if it is correct the collapse will be very, very swift back down through the bottom wedge line in total exhaustion. Today’s euphoric gap up and all is wonderful with the world is kind of overdone, don’t ya think?
So, the pattern is interesting but if no quick follow-through crashing through the downside, then it is not a true rising bearish wedge.
Prices gapped right over the last major resistance. I think prices will still struggle here and today’s massive gap up will close in Minute wave [iv] of 3.
Wave (iii) of [iii] cannot be the shortest wave. So, Minute [iii]’s top price must come in under about 5845. The adjusted key wave marker has been raised a bit from 5555 to 5578.
The market confirmed the short-term wave count with a higher recovery high today.
Today might have been the top of Minute [iii], but it could just be the first subwave of (v) of [iii]. I prefer it to be the first subwave as wave (v) of [iii] needs to stretch out a bit perhaps.
The best bear count is a truncated (1) down and an A-B-C up. If this is the count, then today would be a good stopping point, and all waves are minimally in place to consider the count complete. We may have got a “top tick” moment with Trump saying to buy stocks. Just a thought. It’s not the primary count but the VIX is still quite elevated. Any sharp price move below 5555 is concerning for bulls.
The Fed didn’t lower rates because the market has yet to signal lower rates. The market leads (Specifically the 3- and 6-month yield) and the Fed follows. That’s the way it has always worked.
Today was pretty much expected. As noted on Friday, after 9 days up in a row for the SPX, it was due for some consolidation. The count is wave (iv) of [iii] of 3 of (5) up. An expected alternate corrective would be a wave (iv) zigzag down versus the wave (ii) flat. The count cannot go below the wave (i) peak or else this is not an impulse wave up as labeled.
The best bear count is simplistic (1) – (2) …I haven’t ignored this count at all, it’s just on the back burner until and unless a price drop below key levels would demand that this count gets primary attention. In theory, wave twos can go as high as they require.
The “upside surprise” of a third of a third wave continues. Best count has the market seeking the top of Subminuette wave v of Minuette (v) of Minute [iii] of Minor 3 of intermediate (5) of Primary [5]. How’s that for a count? LOL.
The market breadth finally expanded again in today’s move which is bullish. It had been declining as prices rose with everyone expecting the bottom to drop out again.
Today is also 9 straight up days in the SPX which has not occurred since 2004.
I could see a small early Monday pop and then a consolidation effort that could take the market a few days to digest. The spectacular gains to get back to 5700 so quickly will likely result in a sideways (relatively speaking) movement of and an ultimate defense of the newly acquired 5600 support level.
The new key wave marker is 5596 give or take.
Yeah, I used every wave degree because it was fun to count today. A Monday morning pop to above 5700 would be fitting and then perhaps some up and down sideways action to consolidate gains.
The way I see it, there really is only one major resistance layer that lies above at roughly the 5800 level. It’s likely going to take some price consolidating above 5600 before the assault above. The market is still in an aggressive Minor wave 3 and daily RSI is screaming higher.
If my count is correct, I show a rough outline of what the rest of a wave (5) of [5] would look like.
Elliott Wave International used to like to say GOLD behaves like a commodity and goes parabolic as many commodities are wanting to do.
Best guess stab at long term bonds. A clear impulse down from peak and a weak rebound. Perhaps it’ll take a total market crash later this year to push money back into bonds.
Someday the dollar will zoom back to the peaks of 1984 – 1985. I really believe that. Remember, bonds sell into dollars and not the other way around. It’s the underlying debt that is danger first of being liquidated. I always kind of laugh when people say the “dollar is worthless and will crash”. Really? As if any other fiat currency is more of a safe haven than Babylon USA’s? Wouldn’t the worthless debt (bonds) be liquidated first? Is paper GOLD going to save you? You can’t cash in your GOLD ETF for any real gold. Good luck on that. A world reset is coming. You know it, I know it they know it and they really aren’t even trying to hide it.
Trump wants the Fed to lower rates, but the market has yet to determine that.
COMMENTARY
Trump’s tariffs are really only about one thing: preparing Babylon USA for war with China, Russia, and North Korea. These are the 3 remaining populations that the New World Order must subdue to enact their global government, bring about their one world currency, and one world religion (Satanism) and it’s going to take WWIII and a global financial collapse and global reset to achieve it. In fact, Putin, Xi, and Rocketman are probably in on it. Satan is actively engineering all this to come about.
The children of the devil are not playing around. Most people underestimate of the tremendous murder they are capable of because we are so well removed from the real horrors of WWI and WWII. Things always come in threes…
The tariffs are indeed forcing American companies to move supply lines out of China, giving time to reestablish. Democrats didn’t cheat for the win in 2024 because at the top levels, they of course are all in on it. As are the Republicans. The Uniparty. Sure, the dumb masses get all riled up on both sides. Bread and circuses.
This is why dystopian games and moves, and TV shows are so HUGELY popular. They are preparing us mentally for a world that really will be dark and scary and murderous and… inevitable. They want people to believe it’s inevitable and now most probably do.
Just a few quick charts from the point of view of the bulls again which is the preferred count based on the overall “three” from all-time peak to spike low, the series of “one-twos” off the spike low, and the rare Zweig Breadth thrust event. The market closed above 5600 which can be said to be bullish along with 8 straight positive up days for the SPX which is very rare.
But there is a key wave marker perhaps in SPX 5553 or so. If prices fall below this, then everything will have to be reevaluated.
Just one proposed squiggle chart. Obviously, there is room to operate a bit. A Minute [iii] of 3 up channel to be followed may be emerging. Perhaps it is too steep, we’ll adjust if need be.
The bullish count which seems to be winning out, has the market about to experience “upside surprise” or the middle of a wave (iii) of [iii] of 3 of (5) up. “Thrid of a third” up.
Like I said in yesterday’s post, for the bears to regain control, they need to induce a very sharp selloff that gains downward momentum and breaks things again. They gave it their best shot today and as soon as I seen today’s gap down early low and the price action for the next 20 minutes or so, I labeled this chart as such, and it held up all day.
The setup today reminds me perhaps of what happened in 2007’s major market October peak. We had a sharp [a]-[b]-[c] down – a 12% drop, spike bottom – and then a series of very large [i]-[ii], (i)-(ii) and i -ii up. (Obviously 2007’s waves are labeled one degree lower). Then came upside surprise and then a quick series of wave “fours” which finished the pattern.
The path back to the top, despite being 1 wave degree lower was fairly quickly. About exactly 2 months. If we extrapolate that the same thing is happening today, by about July 4th we should be close or have already topped. Again, this is just a quick wag based on comparing 2007 to today at 1 degree wave higher.
The New York Stock Exchange experienced a very fast and rare “Zweig” breadth thrust event. Within 9 days, the breadth went from well beneath .40 to above .615 indicating an abnormal “thrust” event appetite for stocks and a fairly reliable indicator that a new all-time high will eventually occur. A thrust event of this magnitude almost always indicates much higher prices are coming, at least a challenge to all-time highs. The VIX seems to be steadying down, and the massive intraday moves have subsided as a result. In other words, a slow steady grind for the SPX and INDU back toward all-time highs would likely take 2-5 months (from its recent low). A summer of “climbing the [media-induced] wall of worry”.
Again, I assumed the CPCE would indicate “panic” at some stage in this correction, but it has not. Despite the media wanting to be super bearish and hate Trump and his administration and want to take him down by constant gloom and doom, the underlying truth is that true market panic was just not there. Yes, it was reflected in the elevated VIX (which is very sensitive in these extremely leveraged markets), yet the underlying CPCE put/call ratio barely got excited. Seems more of a technical washout event meant to shake out weak hands to load up on cheaper prices.
The Global Dow has recovered quite a bit.
JUNK debt is being gorged upon still.
THE COUNTS – FIRST, THE BULLISH
The bullish count, again based on the reliable Zweigh breadth thrust event, has the SPX is a wave (5) count. I have it labeled 1-2, [i]-[ii] up but that could be premature if a more developed multi-month pattern plays out back toward all-time highs. There is nothing objectionable to this count. Yes, wave (4) was quite a shock, but that seems to be the norm anymore. We have wave (3) stretched out nicely and wave (2) alternates in corrective form from wave (4).
A “megaphone” type ending wave (5) of [5].
THE COUNT – THE BEARISH POTENTIAL
There is hope for the bears. But I think it needs to be based on 2 things at this stage:
A “reverse” Zweig breadth thrust event – a negative extreme event – would have to occur immediately in my opinion. And as luck has it, the market is exactly setup from yesterday’s data for this to possibly occur. Note the breadth thrust chart again (see above). Yesterday’s close (Monday – 28 April) was elevated back again ABOVE the key marker of .615. It closed at .616. The 28th of April would be DAY 0. Trading Day 10 would be the 12th of May. IF the breadth closes beneath .40 again within that time frame, we can consider the “positive” event to be reversed, and a negative extreme event has overridden things. Thats my theory anyway.
THE BEARISH COUNT
This would be the idea that a quick “truncation” occurred a few weeks back and that wave 5 of (1) down failed to make a new price low but came within 1.4% of doing so. These violent moves are largely a matter of extreme overnight futures that result in over-violent, yet quick opening market moves. Simply put, wave 3 down – the spike low – is a result of market violence at the open. (And the other massive distorted open chart gaps we see)
If that’s the case, the move back up since that truncated wave 5 of (1) low can be counted as a big simple A-B-C zigzag that is close to completion. Note that C=A at the top of the still half-open monster gap down. As I said many weeks ago, the market likes to resolve these futures-induced market opening chart gap distortions. Prices have rebounded well into the gap.
CONCLUSION:
I’m certainly not against this bearish count. The bullish count – the megaphone – still looks and feels wrong. And maybe it is. But it is hard to go against a very rare NYSE thrust event that has occurred. Again, the bear’s hope is that this is just a wave (2) and that the reason no true panic has occurred yet (based on CPCE) is because there is so much more terrible bear moves to come in a wave (3) event that takes prices eventually far below SPX 4800. And that would be exciting, wouldn’t it? We have the next 9 trading days to find out.
Some other technical to note: A) the declining trend of up volume and advancers vs. decliners. B) there are 7 small waves up from “B” of (2). It just looks like it’s starting to limp over. C) This is a great stopping point area for wave (2). We have price retrace into the previous sub wave 2 of (1). We are between Fibonacci 50 – 61.8% (a healthy retrace). The VIX is filling its huge gap also (see the pink gap markers).
I apologize for the profanity in yesterday’s post. I had a very bad day and took it out on the market. When in reality I really don’t care about the stock market in whatever way it goes. Sometimes you get “yanked about” in life circumstances and the market has been behaving this way over many weeks. In the end, the market is all in God’s plan so why would I fight it?
Today is a day that took out the most recent high but not the second most recent high. A very obvious triple short-term top in the market has now occurred. The massive 167-point open chart gap down is such a strong market target. When it opened down massively a few weeks ago, I suggested that the market likes to challenge these gaps sooner rather than later. Well, the market plunged and immediately historically bounced, and it has been clawing and heaving doing its best to breach that massive gap down. And so we have reached a stage where it may be in a position to finally do so.
The most bullish count:
But despite last night’s rant, I haven’t given up on a possible Minor 4 count. Although it would have to be a complex corrective count and the following chart is the best I can come up with at the moment. After all, the market has ALSO left two very large gaps up opens over the last 2 days. Which side will prevail??
Even though the 5-minute charts are considered “squiggles” the size of these daily moves is actually quite massive and volatile still. Sometimes we should zoom out and imagine a count and just be patient. I can still see the above massive 167 SPX gap down being closed or nearly closed and the overall larger count being bearish.
Rulers sometimes work best in the market. It was the logical place for the algorithms to massively defend and buy.
Death of the dollar talk has been rampant. Really? It still looks like an overall bullish setup.
Often the markets have to experience true panic before a meaningful run toward new all-time highs. Yet, the CPCE is so still obviously NOT panicked, we can take solace that the market has not been overly “bearish”. The contrarian play is that the market is going to drop yet more first.
