Friday, December 30, 2016

SPX Update: An Ultra-Rare Pattern to Close the Book on 2016

After Wednesday's session, it became apparent that the previously-assumed triangle count was off the table, so before the open yesterday, in our forums, I posted a new short-term wave count, along with a first downside target of 2244.

With that chart, I included the following commentary (slightly edited for clarity):

Since I don't do Thursday updates on the main blog, I at least wanted to publish this quick chart for everyone here on the forum.  Triple zigzags are among the most rare legitimate patterns (there are patterns that are more rare, but the only patterns more "rare" are patterns I don't consider valid (lol), such as the "expanding ending diagonal," which I don't believe exists at all, thus making it technically more rare than the triple zigzag, since the "EED" has a frequency of 0%). 

Anyway, if ever I've seen a pattern that COULD be a legit triple zigzag, this is it.

If 2248 fails, then this pattern is a triple zigzag, which you'll have to forgive me for not anticipating in real-time. In the past couple decades, there have literally only been a small handful of these, so it's something of a fool's errand to even watch for them, and these types of long-shot patterns are generally only tracked by perma-(bears/bulls) who are trying to find SOMETHING that can fit their underlying bias. (IMO, watching for triple zigzags is somewhat akin to betting on an unforeseeable black swan event every time the market corrects even slightly).

If 2248 fails, then we have to presume this is a triple zigzag, in which case we have 3/C targets at 2244 +/- and 2226 +/-.   Just a heads-up for everyone.

Here's the triple zigzag chart:

Here it is on the now-defunct triangle chart:

Again, if SPX sustains a breakdown at the blue/red trend line (blue on the first chart, red on the second), then bulls might want to hold their fire until things clarify again, because it's always possible that red C (above) is only wave 1 of a larger C-down.  Nimble traders might even consider shorting against the all-time high IF (and I stress IF) we get back up within a few points of it -- playing for a more complex correction, that could even head as low as 2200-2215.  That's looking a bit down the road, but something to keep in mind.

As of yet, no real change to the bigger picture:

In conclusion, we just witnessed a corrective pattern so rare that I can't recall having seen one at this wave degree in at least the last 5+ years.  Whether this is ALL OF the correction remains to be seen, but there are enough waves for a complete ABC down, if that's what the market wants.

On another note, the next time I do an update it will be 2017.  Which seems ridiculous, really, because 2017 sounds incredibly futuristic.  I'm going to be sorely disappointed if we don't at LEAST develop warp capabilities in the next 48 hours, so technology can get caught up with the sound of the year.  I mean, c'mon, if you'd told high-school kids in the 80's what the differences would be between 2017 and, say, 1989, we'd have been SORELY disappointed.

To illustrate this point, let's look at an unbiased list of the pros and cons of 2017 vs. 1989.

2017 Pros:

1.  Everyone has cell phones.

2.  Virtually all other communication, shopping, bill paying, etc., can be done over the internet.

3.  At a loss here, and I've been thinking for like four entire minutes.  Oh!  Digital cameras.

2017 Cons:

1.  Everyone has cell phones.  Even little kids have cell phones, which makes YOUR kids (yes, you have kids now!  It's 2017, duh.) believe they, too, are entitled to a friggin' cell phone -- so when you refuse to get them cell phones because you want your kids to learn how to communicate like actual human beings and not constantly bury themselves in a "one-step-removed" form of interaction, AND you want them to learn to entertain themselves without technology, they believe you are the most ruthlessly-strict parent to ever walk the face of the Earth.

2.  The music sucks.

3.  Commercial forms of art are dead.  Virtually everything (from movies to music) is a "reboot," a remake, or an outright ripoff of something that came before.  It seems like nobody has any original ideas anymore, probably as a result of everyone having their face buried in a cell phone or laptop 24/7, which allows them no TIME to think up original ideas.  Some of the greatest inventions and ideas in mankind's history have come about simply as a result of boredom, which gives people time to daydream and motivates us to create.  When we fill up our every waking minute with "busy work" or mindless entertainment, we leave no space for true creativity to break through.

4.  Everything else.

Anyway, my point is:  Happy New Year!  Despite the inherent cons of 2017, I do wish all my readers a safe, healthy, and prosperous New Year.  Trade safe!

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