Stock Market Indexes Are Winding Up for a Fast Ball
Stock-Markets / Stock Market 2017 Jul 08, 2017 - 01:12 PM GMT
I finally have internet service and can communicate to you. We had a violent storm pass through early this morning. I did not know the extent of the damage until I discovered my broadband service was out and the roads were blocked by downed trees. Fortunately, we are on a high priority electricity grid, so power was back on by sunrise.
For some who have no idea what is happening in the markets, the chart on the left appears to be a benign jumble. In Elliott Wave terms, this is a coiled spring, ready to release a bundle of energy.
ZeroHedge comments, “Quant trading strategies extended their notable losses this week with CTAs suffering their worst 2-week drop since June 2003...
These drawdowns are marginally worse than the 2007 Quant crisis drops.
And Risk-Parity, plunging...”
Once beneath the 50-day and the Head & shoulders neckline, SPX may let loose to the downside.
NDX bounced from the Cycle Bottom to complete an irregular correction, where Wave (b) is the longest wave. Literally, anything may happen on Monday.
VIX crossed beneath the 50-day Moving Average, but remains on an aggressive buy (SPX sell) nonetheless. VIX also has a wind-up to four degrees of trend, which propose a powerful take-off next week.
TNX extended in a 9-wave Wave (v) of [c] of 2. Remember, Wave 2s may travel all the way back to the beginning of Wave 1 (at 24.23). Again, this foretells a doubly dramatic fall, since the rally was also dramatic and Wave 3 must be a multiple of Wave 1.
Regards,
Tony
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Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.
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