Wednesday, December 30, 2015

SPX and Blade Runner Update: A New Life Awaits You at the Off-World Colonies! (And it probably beats this chop zone)

Well, the new year is almost upon us, and with that, we're all reminded to stop writing 2015 on our checks (for those of us who still occasionally use checks, anyway).  Personally, I have yet to emotionally accept that 2015 has already come and gone, especially when I watch Blade Runner, which came out in 1982 and supposedly takes place about 3 years from now ("Los Angeles, 2019").  Back in the 80's, that vision of the "distant" future seemed wholly reasonable.  It's almost ludicrous, though, seen in light of the current reality.  Blade Runner envisioned that by 2016, there would be "replicants" (clones, considered to be sub-human) running the most dangerous jobs, such as mining "The Off-World Colonies," when, in reality, in 2016 the sub-humans are merely running for office.

I think I prefer the Blade Runner future, which I'm pretty sure was correct in its vision -- except for the fact that we got sidetracked into an alternate reality when Alan Greenspan took over at the Federal Reserve, thereby dooming us to this bleak version of the present, wherein we're now facing 2016 without viable replicants, without flying cars, and without pollution levels that keep the skies over Los Angeles dark 24 hours a day.  I guess we still have three years to make all that happen, but technically, the antagonist replicants in Blade Runner would have been created in 2014, so we've got a lot of catching up to do here!

Anyway, I'm ranting, which I tend to do whenever I look at a calendar.  I had big expectations as a young person, since virtually every sci-fi product of the 80's promised us a mind-boggling 21st century.  Well, we're well into it now, and it still stinks.  In fact, I think I preferred the 80's!

Sorry, I'm ranting again.  Fine, let's talk about the market, then.

There really isn't much to add, except to note that the preferred count has continued tracking reasonably well.  Last update, I noted that:

I would have preferred, and would still prefer, to see SPX clear 2076 before its next meaningful move

And that has since happened.  Because we're dealing with a complex flat, and we can't be entirely certain (ahead of time) where the b-waves will show up within a flat, there's an element of unpredictability inherent in this pattern, and that won't change until we're clear of the chop zone.

From the standpoint of sentiment, last night, I provided the following bit of speculative commentary in our forum:

The more I think about it, the better this setup is from the standpoint of "max pain" to participants. Remember this paragraph from November 23, which was around the time I starting thinking we'd get some type of complex wave in this price zone:

The market tends to cycle between trending waves and oscillating waves, and that's one of the ways it steals money from us: Often, after the market has conditioned everyone to expect minimal moves, we get a huge move (think of the recent crash wave, and how many bears closed their positions way too early) -- and then, after we've become conditioned to expect huge moves, we get minimal moves. Rinse and repeat until everyone has lost money.

If we continue to unwind this complex flat, especially if it plays as shown on the SPX chart (still one more down/up/down cycle to come), then by the time we get the next REAL move, everyone will be frustrated and still expecting a continued cycling move -- or simply too afraid to take action after all the chop... the exact same thing that happened to most players just before the flash crash.

So, we'll leave that as the traditional "In Conclusion" ending (just go back and put "in conclusion" somewhere in there.  Like this:  "If we continue to unwind this complex in conclusion flat..."  Err... I guess you'll need to use your own judgment.)

And with that, we conclude the updates for 2015 (or whatever year it ACTUALLY is -- either the 80's were lying, or the calendar's lying.  And we know it couldn't have been the 80's!).

In any case, no matter whether we're moving on into 2016 or 1997, I sincerely wish all my readers/supporters a healthy and prosperous New Year!  Trade safe.

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