Ending Diagonal Wedge on Stock Indices

Just as we the Wilshire 5000 is approaching the major price projection confluence shown here in the previous post, the chart below is displaying what appears to be and ending diagonal pattern. The ending diagonal is pretty much the same on the SPX and other major indices. If this is the correct count, the market should have a pullback followed by another rally to new highs which would likely top out in the 4/3 to 4/5/13 time frame. Whether it's an ending diagonal or not, whenever this 5th wave ends, the market should have the biggest correction since the Nov 2012 low.

Kim Rice 3/31/13

Wilshire 5000 Price Projection

As shown on the chart below, there is quite a confluence of projections and trend line resistance that all line up in the 16,630 area (+/- 50 pts). That is less than 200 points away from the 3/11/13 close. If the market runs up to that price area, I would think it should mark at least a short-term top and possibly THE top for the entire rally from the 2009 low. If so, the expectation would be an eventual move for wave E that goes below the low of wave C (the 2009 low).

Kim Rice 3/11/13

Update to Feb 26-27, 2013 Major Confluence in Stocks

Posted below are updates to a few charts and another chart showing a pi and phi alignment on 2/27/13.

I began accumulating Sep and Jan SDS calls (double short ETF) on the close today, 2/27. If I'm wrong and the market continues higher for a while, I suspect we will have significant correction (just based on current sentiment readings alone) long before the calls decay too much. I will look to get more aggressively short on a break of the 2/26 low. If/when the 2/26/13 low is broken, stops would be placed 1 point above whatever high is achieved on the rally since the 11/16/12 low .

There are any number of possibilities that may unfold after this confluence window:
a) the market ignores this timing confluence and keeps on going up,
b) the market turns down and does one of its little pullbacks that brings out all the buy-the-dippers that have had their way for a long time now, and the market then takes another leg up into May where there is another timing confluence that may mark the end of the bull since 2009 low,
c) the market turns down for a reasonably innocuous looking correction followed by a 50-70% retracement which then rolls over into a wave of highly motivated selling that climaxes around 4/24/13 (ref 1929 and 1987).
d) the market turns down with a scary sell-off, but rallies back to near the highs and starts a slow grind down before more significant declines happen later in the year (ref 2000 and 2007).

I'm leaning toward c or d as being most probable, but I'm fully aware that virtually anything is possible. I think it's very possible the music stops on or near 2/27/13. I recommend finding a chair pretty soon if it does.

Feb 26-27, 2013 Confluence for Stocks

There is a major time square from the 9/03/1929 top that projects to 2/26/13. Other projections from the 1929 top have marked important highs and lows, including 8/25/1987 top and 8/25/2010 low.

The current rising wedge pattern in the S&P 500 looks very similar to the wedge that lead to the top in 2000. Other timing annotated on the charts posted below includes the 353 trading-day leg down from 2007 top to 2009 low. If the rally from 10/04/11 matches this 353 trading day run, it would peak on 2/27/13.

Also worthy of note is the 65 to 67 trading runs for the last legs up into the 1929 and 1987 tops. A similar run from the 11/16/2012 low takes us to 2/26/13 (at 67 tds).

It's still too early to assume that 2/26/13 area would be a top. If we trend down into that date I would expect a low followed by another rally. I would keep in mind that we are getting close to the 13 year anniversary of the 3/24/2000 top and that the market may have some kind of CIT on or near that date.

Kim Rice 2/10/13

Mini S&P Continuous Futures: Trendlines Tagged

On the first chart posted below, the long-term upper parallel channel line was hit yesterday/today. The same channel line drawn on the cash index has been exceeded a bit, but I prefer the continuous futures contract for accuracy of trendlines. The second chart shows the upper trendline of the rising wedge was also hit with precision. So far these trendlines have acted as resistance just as the important 1/30/13 timing was hit. I don't know if today's high in the market will hold, but I think there's a pretty good chance it might.

Kim Rice 1/30/13

Stocks: Major Confluence 1/30/13 to 2/5/13

As posted here a weeks back, there is a major timing confluence in stocks due late Jan to early Feb 2013. After a few more weeks of market action and conducting more analysis, it appears the most likely timing for an important turn is 1/30/13 (+/- a couple trading days). Earlier guess was that early Feb would mark a low, but as we approach that window it is most likely heading into a top. I think the top is very similar to the 2007 double top per annotations on some of the charts posted below.

As shown on the charts, there are multiple methods of timing on daily and weekly charts that point to this 1/30/13 area time window. One that looks particularly interesting is the 334 trading day up-leg from 10/04/11 matches the duration of the last up-leg leading to the 2007 top. After redrawing the upper trend line of the rising wedge (to line up with 9/14/12 peak instead of 4/2/12 peak), the apex now lines up with the end of January as well. Lastly, the Fibonacci time series from the 3/6/09 low has the next point in the series lining up in this confluence window as well.

Sentiment is at extremes and VIX is at lows not seen since the 2007 top. There are numerous divergences showing up as the SP and Dow Indices moved above the 9/14/12 highs last week, while the NDX is still quite short of the September high. The RSI divergence on the weekly chart is almost an identical set-up as occurred at the 2007 top.

Price-wise, the last projections nearby are 1485 to 1488 area basis the nearby E-mini S&P continuous futures contract (see analysis annotated on charts below). If the E-mini SP closes above 1490, it may move as high as 1550 which is the next confluence of price projections. Wherever it's going to peak, I think it needs to get there no later than the week of February 8th, and most likely the week of February 1st.

I would highly recommend reviewing some very comprehensive long-term technical analysis prepared by Garrett Jones and some cycle work by Peter Iliades. Both of them have analysis that is looking for a major top in Jan/Feb window. You can find a Garrett Jones audio interview and his charts here. Peter's analysis is on line here.

Kim Rice 1/20/13

The first chart shows the divergence in the NDX not making new highs above September top.

The rest of the charts are annotated with analysis and comments.

SP: Apex Convergence Point

The timing for the secondary peak has been elusive (assuming the market is in a topping process). Posted below is the E-mini continuous nearby futures with possible geometric resistance/reversal pattern. The apex and back-kiss convergence is the same on the SPX cash chart (log scale).

Kim Rice 1/6/13