Friday, December 20, 2013

Morning Charts 12/20/13 SPX /ES

Quite honestly, I'm not sure how you could attain a more perfect setup for a reversal than this. The triple top scenario on top of everything else we've been discussing since mid November. I could not think of a better way to go out (and the Fed could not think of a better set up to thwart). 

It's a war now. The Fed must keep the market afloat to defend the illusion they've created that the economy is fine and the recovery is continuing. Their war is against natural market forces and reality. The Fed has all the CB's, the algos, the servers, the BLS and the printers on their side. They can pull any lever they want at anytime to control the market now (see Wednesday from 2 to 4 pm).  Reality, well all reality has is time. Funny how history has always shown that time tells all. 

Daily SPX - OK, follow me here. This is your 2013 technical review. "A Bear's Nightmare" - 

All the red lines pointing down from L to R are negative divergences - they are bad. The black vertical dashed lines mark overthrows where the negative divergences (market forces that under any normal circumstances create a correction) have been oppressed. Starting at the first of this year at 1474 they blew thru what should have been the first point (the actual market top - where this game should have ended)  a correction should have occurred. Then in May and later in October the same instance occurred. The the first overthrow caused a breakout over the pink rising wedge resistance. This allowed and even steeper blue rising wedge to form of which the second overthrow confirmed the breakout. The third overthrow caused an overthrow of the blue ricing wedge and formed the even steeper black rising wedge. The black rising wedge is the first of the four wedges to breakdown. The black rising wedge breakdown is now being backtested. 

This could be the moment all the bears have been waiting for. A backtest of the fourth rising wedge that broke down under a triple top in the 15th consecutive daily divergence after three technical overthrows. Technically there may have never been a point in history that is this conclusive. Of course, there has never been a more manipulated or controlled market like this in history. Can't wait to see what the Fed can pull out of its hat here with taper ON.

Minis 4hr - Everything you need to know is in this chart

More to come below. 
Merry Christmas and happy holidays. 

GL and GB!

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