Gold: Anatomy of a Rat’s Nest Chart

Once in a while, charts are so crystal clear that we can see the future as easily as we can reflect on the past. Gold is not one of those charts. The zigs and zags come fast and furious and rarely correlate with anything happening in the real world. Witness the indifference this so-called inflation … continue reading →

Why Bonds Are Still Important

I had an great question yesterday regarding the bond market: “Is it possible the fear of pandemic in spring 2020 affected the behavior of 2yr and 10 yr and then indirectly triggered the crash?” Pebblewriter longhaulers will recall that our bond cycle model forecast a severe plunge in interest rates long before anyone was talking … continue reading →

VIX: Just a Flesh Wound?

In Friday’s post VIX: Back From the Dead we noted that VIX had recovered from the breakdown below trend dating back to Nov 27. This morning, it’s testing overhead resistance from Jan 4 and, if it’s able to break through, will likely take on resistance from Dec 21 or even Oct 29. Bears might want … continue reading →

Test Passed, So Far…

ES spent 6 1/2 hours yesterday anguishing over the trend line/neckline we discussed.  When the Fed minutes came out, it even broke down a bit from the rising channel it had constructed overnight.  The breakdown seemed like it was sticking.  But, just after the close, WTI spiked and VIX dumped. That’s all it took to … continue reading →

Will This Time be Different?

We would almost always expect a big bounce off SPX’s 200-day moving average. Despite yesterday’s dip below the 200-DMA, the index dutifully crept back above it in time for the close.  And, the futures are currently showing an 8-point gain.Yet, if an analog I’ve been watching and our yield curve model are correct, this bounce … continue reading →

The Slope of Nope

As a chartist, I’m often struck by how similarly the stock market acts at important tops and bottoms.  By “important tops” I’m speaking of those which precede large corrections or even crashes.  So, with apologies to Tim Knight’s excellent Slope of Hope… In 2000, SPX retraced a Fibonacci 88.6% of its initial drop before falling … continue reading →

Are We There Yet?

SPX came within 7 points of our downside target yesterday, getting a midday bounce that couldn’t quite reach the 200-DMA.  Futures popped as high as 73 points off the intraday lows, but have since given back about 12 of those points and are perched barely above ES SMA200 at a 28-pt gain in the after-hours.If … continue reading →

That Escalated Quickly!

It was just last Tuesday we asked “where’s the bounce?”  SPX had gapped lower and failed to rebound the way it always seems to has for the past year. We had watched a trend line dating back to Dec 29 (below, in red) break down, and were wondering about the small, white channel.  From Where’s … continue reading →

The Same, but Different

Yesterday started out with a VIX-driven pop that quickly fizzled and nailed our downside target before rebounding and hitting our upside target.  Since SPX closed right at resistance, it needed a boost overnight.  So, why not go back to the same clever trick that worked the day before? Yes, VIX’s red channel has broken down … continue reading →