E-Wave for the S&P 500 Index

[gdl]

The only thing i can promise is this year will not end without devastating consequences and a stock market that gets cut in half. Like a pandemic and the known financial consequences. Like the coined slogan mass acceptance of Transitory inflation. we believe what we want and disregard the rest. Bull Bear sideways. Till the next quarterly earnings gets announced anything and everything is up for grabs. The market can excuse reality till reality bites with real earnings and future projections. We already have a very low bar for the next 2 quarters. Only 9 months from now do we expect double digit returns. BUT the next quarterly earnings will not only show weak numbers but will confess on future growth drawdowns. It is inevitable. UNLESS income and spending can keep up. So far it got sliced in half with expectations against real results.

40 years of disinflation and the structural investments made could never handle a 6 percent fed Fuds rate. Never!

Do we pretend we are still in the goldilocks scenario till earnings annulments? Maybe.

[jxyzobrien]

day 1

[RCKS]

"....the "easy" part is over for now, and I can no longer promise more new lows......."

http://www.pretzelcharts.com/

"In Friday's update (which was published when the S&P futures were trading just off of Thursday's high), I wrote that I suspected that SPX needed another new low, which it reached at the open. As I also wrote, that low would be an inflection point. I wrote this because that low is potentially three complete waves down in SPX from 4195, which means we shouldn't entirely discount the possibility that bulls could regain near-term (or larger) control from here.

What bears would like to see now is a bounce in a larger fourth wave (which could take a week or longer to unfold), then another new low in a fifth wave."



"SPX came up a hair short of the red trend line, but was in the ballpark:"



"In conclusion, the "easy" part is over for now, and I can no longer promise more new lows -- we'll just have to see how it develops for a bit, to determine if the market wants to form a potential impulse down, or if that whole decline was merely a correction. Trade safe."

[Zilla]

You explained this to me in BHC before covid. You also had a post talking about politics/media and the need for a correction. This was in 2019 and boy did we get a correction. Looking forward to catching up on your thoughts of the overall market as I read some of your past posts. Thank you

[gdl]

Every single data point has been devastating to the Goldilocks scenario. Not only has inflation spiked again but the assumption that wages and spending will keep up has been utterly shattered. The report Friday was so bad there couldn't have been a worse scenario if you tried. Core PCE prices surged as income and spending came in at HALF what was expected.

BUT this market's slide has been so controlled you would think that an intelligence was behind it. Every single possible support zone was tested on the way down and held for that day. There was not a single day of panic and every slide was slow controlled and moved to predictable resistance points.

So here we go again! Monday should be the last day of slide. It should once again see the next zone 3912 area and rebound off f it. If this occurs count on a big rally after. ONLY a clean slice right thru the next resistance point will possibly cause a panic. Highly unlikely.

This reminds me of the announcement of a pandemic. we knew with certainty how such an event occurred 100 years ago. We knew with certainty the human toll it would take. And yet the bullish stance was detached from reality as if someway things will work out. Weeks went by with hardly a drop. Human nature seems to cling to the optimistic path regardless of the likelihood of success. We could actually wait for the next opportunity for a dramatic slide when the next quarterly earnings gets going. Late April/early May the stark reality of how earnings will get affected will be displayed. Majority of companies will likely miss earnings target by a small margin but announce a huge revision for future projections.

IF we stabilize early next week the likelihood of a bull market continuing till late April is high IMO. We seem to prefer dancing on the deck of the Titanic after the iceberg struck than accepting our fate.

[RCKS]

Let The Charts Do The Talking
Tom Bowley | February 26, 2023 at 11:45 AM

http://stockcharts.com/articles/tradingplaces/2023/02/let-the-charts-do-the-talking-423.html

"We are provided constant reminders that important company information is reflected in the absolute and relative performance of the company's stock price. That may go against common sense in a few instances, especially when it comes to earnings. After all, the company is supposed to be delivering fresh new information for the stock market to digest. How could it already be priced in? Well, let's simply call it Wall Street intuition. Of course, it's much more than intuition. Wall Street firms have the ability to discuss key company metrics with management all the way through the end of the company's fiscal quarter end. It doesn't mean that company management is telling the absolute truth at all times. Occasionally, humans will "spin" information a bit, and we'll see big market surprises when earnings are released. But at least in theory, Wall Street should already have a decent idea of what's going to be announced when quarterly results are revealed. That's why we organize companies with upcoming earnings reports into ChartLists that we share with our EarningsBeats.com community members. We streamline the process to help folks prepare for major upcoming earnings news.

Last week, we saw several more reminders why evaluating relative strength is so important leading up to earnings announcements. The best way to make better earnings-related decisions with stocks that you own is to constantly practice and review tendencies based on what the charts are saying. If a company is showing excellent relative strength vs. its industry peers and/or the benchmark S&P 500, there's a decent chance that Wall Street is showing its confidence in the company before the actual earnings are released. If that's the case, we should expect excellent results.

Let's look at a few examples. First, let's check out two companies that delivered excellent results last week:

Remitly Global (RELY)
One week ago, I wrote an article right here in my Trading Places blog, "This Industry Group Loves The Next 3 Months", which focused on the specialty finance group ($DJUSSP). Remitly Global (RELY) is a specialty finance company that was trending higher relative to its peers and the S&P 500. When earnings were released, we found out why. RELY posted revenues and earnings per share (EPS) that both easily surpassed consensus estimates. Specialty finance had bottomed vs. the S&P 500 back in October, was trending higher, and moving into a strong seasonal period. RELY was showing leadership throughout this period. The chart was telling us to expect strong results:"

http://d.stockcharts.com/img/articles/2023/02/26/f6bd1073-e512-492c-83fa-c8758ff7cd8b.jpg

"The hard part about earnings reactions is that the market reaction doesn't always equate to the actual report. In other words, it's quite possible that a company reports stellar quarter results, raises guidance, and still drops. Personally, I view those types of short-term drops as trading opportunities.

Transmedics Group, Inc. (TMDX)
Talk about leadership! TMDX has been crushing its medical supplies peers ($DJUSMS), which is awesome considering that the DJUSMS has been solid relative to the S&P 500. This is the epitome of a leading stock in a leading industry group. Take one look at this chart heading into its earnings report - it should speak volumes:"

http://d.stockcharts.com/img/articles/2023/02/26/c9db4df0-02a6-4f80-8f51-5e7ff7a7e32d.jpg

"Once again, TMDX is a company that delivered quarterly results way ahead of consensus estimates. Actual revenues came in roughly 30% above estimates. Few companies beat revenue estimates by such a wide margin. As a former practicing CPA that has actually performed company valuations, I can tell you that rapidly-accelerating revenues and earnings have the biggest impact on valuations, much more so than interest rates or other outside influences. Look for future quarterly estimates to be raised on TMDX and further stock appreciation.

Not everything is rosy heading into an earnings report, though. We do see plenty of instances where Wall Street shows its disdain for a company. Here are two companies that reported earnings last week and certainly fit the bill:

Unity Software, Inc. (U)
Software stocks ($DJUSSW) had been rallying hard in 2023, lifting most stocks in this space. Count Unity Software (U) as one of those. U showed no leadership whatsoever, mind you, but it still rallied simply because of the rising software tide. This is a great case of a rising absolute price, but a falling relative price. Check this out:"

http://d.stockcharts.com/img/articles/2023/02/26/1a5f9246-6936-446e-9149-d389d6407b70.jpg

"The equal highs on U in early December and mid-February (red arrows) are quite telling. In the bottom panel, you can see that the relative strength of software is accelerating. So while the move higher in U shares during January and February might have felt really bullish, its relative strength vs. its peers was deteriorating even further. Therefore, we shouldn't have been surprised to see mixed earnings results. Quarterly revenues did beat expectations, but EPS came in flat, while Wall Street was expecting a small profit. It's difficult to say which way U goes from here, because it is already beaten down, but a test of that early January low should not be ruled out.

Vicor Corp (VICR)
Ugly. That's the best word I can come up with after looking at this chart. You have to realize that Vicor Corp's (VICR) industry group is electrical components & equipment ($DJUSEC), which has been one of the best industry groups relative to the S&P 500 over the past year. So VICR resides in one of the sweet spots of the stock market. And still it's produced little that Wall Street likes. Relative strength appeared to be on the mend during the January market rally. However, February happened and VICR's relative improvement vanished right up to its quarterly report on Thursday afternoon. EPS came in 21% shy of estimates and Wall Street was not in a forgiving mood:"

http://d.stockcharts.com/img/articles/2023/02/26/889b68e1-bdaf-4b0f-abdd-a1348155e8e7.jpg

"Sometimes, it's difficult to think bad thoughts about the stocks we own, but we do need to try to remain objective. Holding a stock into its earnings report and "hoping" that Wall Street got it wrong is probably not going to work out long-term - or even short-term, for that matter.

Listen to what the charts are saying."

Tomorrow morning, I'll be providing the one stock that I would not hold into its earnings next week simply to minimize risk. If you'd like to receive it, you can CLICK HERE and provide your name and email address to subscribe to our free EB Digest. There's no credit card required and you may unsubscribe at any time.

Happy trading!

Tom

[RCKS]

"...SPX was not done to the downside..."

http://www.pretzelcharts.com/

"In last update, I was of the opinion that SPX was not done to the downside and that it would need to unwind some additional lows, which it has since done. That said, I'm still leaning toward it needing at least one more."



"No sustained breakdown at the black trend line as of yet, so that's why I can't be 100% on the above read and mentioned that Thursday's low does qualify as a potential inflection (though, again, I'm leaning toward it failing):"



"Other than that, nothing else to add to the prior update. Trade safe."

[RCKS]

excerpt from my post to Glen on his thread..... Charts_CCI_System

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=171284801

a week ago you(Glen) mentioned that on the weekly chart for the SPX we were still trading inside the price range of the week ending Feb 3rd. This chart is the SPY Weekly and we traded out of that range to the downside today but the more telling aspect is we have back tested the Falling Trend Line off the All Time top from above it. We broke out above that Trend Line the week ending Feb 3rd. and you could argue this back test is quite Bullish if it holds above the trend Line

http://stockcharts.com/c-sc/sc?s=SPY&p=W&yr=3&mn=0&dy=0&i=p82595639926&a=587003585&r=1677194645324

http://stockcharts.com/c-sc/sc?s=%24SPX&p=W&b=5&g=0&i=p79346269434&a=222820001&r=1677194542815

[gdl]

NO indication we drop hard. in fact this has been so orderly and defined I can predict 3920 as a possible low either today or tomorrow. Since this is day 5 of drop most likely a continuation till Monday, day 7. That should end this down cycle. no drama so far and none indicated. I can't see anything that will cause a sudden drop from here. By end of day Monday we should be heading for a much higher move to perhaps 4500 on SPX.

Had hoped this was the continuation of the bear market but not likely. Today and early tomorrow should seal this move.

[gdl]

And I have 3850 as the possible lows. But so far there is no sign of surrender. Obviously this market wants to rally here but has been stopped by economic data and corporate warnings like Walmart. A truly epic battle and one that should be resolved soon. I suspect both will be winners if the immediate move is down to 3850 at a minimum and then a huge rally after. Clearly this market wants to go up. Get ready for a wild ride dead ahead.

[GLENO34]

Thanks RCKS...My big guru is looking at 3950 as the place to go long..But I like the 3750 level better...

[RCKS]

"....SPX appears to need further downside before it can even consider forming a decent low -- and while it's a bit early to say for certain "how low," I suspect the red trend line at the minimum, and am on the verge of leaning toward the 3750-67 zone."

http://www.pretzelcharts.com/

"On February 10, I wrote:

[B]ears are still very much in the near-term game here, and normally one would expect some downside follow-through to the pattern so far (though worth being aware that it's three waves down from 4176 so far, which, 9 out of 10 times, means it either needs to become five down, or it will turn into an expanded flat that runs back toward 4176 before heading lower later; 1 out of 10 times it's something weird like a double three).

On February 15, I discussed INDU's noisy pattern and that it had given me a little doubt, but wrote that "my initial instinct last update was that SPX had only formed three waves down and was thus likely to rally and return to the low, and I'll stick with my first read for now."

On February 17, I wrote: "[N]o change, except to add that there's now a possible micro bear nest in the near term pattern."

Given how wacky this market is, and how confused the majority of participants are, I have to say that I'm rather pleased that all of these reads were on-target, given the current environment.

SPX has now reached the first downside trend line, which I discussed a couple weeks ago:"



"On the chart above, I mention that it "looks reasonably likely" that SPX will ultimately reach the red trend line; the chart below discusses why I said that:"



"Finally, NYA reaching its target zone was one of the things that helped all the prior analysis work, to get us looking the right direction at the reversal:"



"In conclusion, SPX appears to need further downside before it can even consider forming a decent low -- and while it's a bit early to say for certain "how low," I suspect the red trend line at the minimum, and am on the verge of leaning toward the 3750-67 zone. Also, do keep in mind the larger wave position here: Again, it's too early to say without a larger impulse down, but it's worth knowing that it's at least within the realm of possibility that SPX has topped blue wave (2) and is headed much lower from here. Trade safe."

[JLS]

Bull, Bear, makes little difference to me.

I buy stock. That's bullish. Then some time later I sell weekly Calls against that stock. That's bearish.

It's the initial price of the stock and the management of the Calls that determines how the total trade finally turns out, and that is determined by the velocity and direction of stock price during the trade.

If the Calls are not assigned at the end of the week, I sell more Calls on Monday. Sometimes, I'm able to get a greater return on the Calls by transitioning strikes during the week, but I rarely do that.

[JLS]

From: POKERSAM 3201 of 3210
(different message board)

There is no doubt you are right. At no time in the past for over a hundred years there has never been a bear market that has not been followed by a new all-time high. That goes for every cyclical and secular bear market. It will be the same for this bear market.

What is in debate is how deep will this bear go before it bottoms. Many think, in error I believe, that this bear has bottomed. Also, in debate is how long will this bear last. Several years will be a minimum IMO.

This is a secular bear and they last many years.
https://www.siliconinvestor.com/readmsg.aspx?msgid=34187700

[RCKS]

+.....there's now a possible micro bear nest in the near term pattern: Bulls do not want to see a sustained breakdown of 4060...."

http://www.pretzelcharts.com/

"The market has traded sideways since last update, so no change, except to add that there's now a possible micro bear nest in the near term pattern:"



"SPX is still in the same place in the bigger picture:"



"In conclusion, not much to add since last update, but I suspect we'll get some resolution soon. Trade safe."

[RCKS]

To: Sun Tzu who wrote (76830) 2/16/2023 1:43:49 PM
From: Qone0
76831
of 76832

It might take that long before the rate hikes have the desired effect.

Remember the real drop doesn't start until the FED pivots. Not while they are raising. The longer they raise the longer it will take for the crash to happen.

Hope springs eternal until it doesn't.

https://i.redd.it/e9gdkgjpg2y91.png

https://www.siliconinvestor.com/readmsg.aspx?msgid=34193005

[RCKS]

"....my initial instinct last update was that SPX had only formed three waves down and was thus likely to rally and return to the low, and I'll stick with my first read for now......."

http://www.pretzelcharts.com/

"Last update noted the possibility of a complex flat toward 4176, which may be unfolding now:"



"No change to the big picture, and while SPX is within an inflection zone, Red 2 remains on the table:"



"Near-term, the pattern has gotten noisy in INDU:"



:"In conclusion, my initial instinct last update was that SPX had only formed three waves down and was thus likely to rally and return to the low, and I'll stick with my first read for now, but INDU has at least caused me a bit of uncertainty in that, so we'll see how it plays from here. Trade safe."

[gdl]

While I can't chart the various paths in EW i can use common sense and odds in my favor. We NEVER reversed inflation this quickly or easily. in other words the January spike was not a fluke and inflation will not only linger but get stranger in weeks and months from now. A Fed Funds over 6% is a guarantee for disaster. I have been stating for a while that 2023 will go down as the worse year in a century. The goldilocks scenario has been turned on it's head.

I was right with the pandemic and last year with the so called transitory inflation. I am as confident going forward as i was in those two incidences. Whether charts agree with me or not.

The charts? Where were they when we had a pandemic? Common sense won out. Last year everyone was calling the inflation spike a short transitory event. The weak earnings for so many quarters and the expectation that decent earnings ONLY occur in 9 months from now is outrageous. These are NOT MY assumptions but the streets. Soft landing? Bonds and inverted curve has already spoken. th dollar? it can't drop to save this economy. China? they are just opening up their own economy. Human nature is the same wherever you go and they will cause a HUGE spike in commodities.

We are entering the perfect storm this year. 3200 on SPX is the first support zone this year and likely all the way to 2500.

Just common sense and a very long period of hope and eventually that will lead to capitulation and surrender. Once again i don't use charts to tell me where we are in this cycle. In 87 I "saw" the crash within 2 weeks. We are biding our time for the dam to break. there is NO scenario that will prevent it from here on out. NONE!

I was wrong in October so perhaps i am wrong on this years move. BUT I must bet what I see and anticipate till proven wrong. Both BITCOIN and SPX are riding this wave together. BOTH are warning big time.

[RCKS]

gdl

I do not expect a big sell off here or next week. I'm in the camp that says this will be a frustrating year for bears and bulls alike. I think we stay range bound all year.

I'm just sharing my big picture view.

[gdl]

AS EXECTED is not disinflationary. January is a bit of a problem. The news going forward better stick to the POWELL story. I am still on watch for a nasty drop but now instead of this week it might very well be next. Like the Transitory inflation pushed by Powell he seems to present what the street wants to hear and hope it works out. I NOW expect the PPI to be HIGHER than expected on Friday.

[gdl]

Exactly agree. Like watching the next pandemic come over from China and listening to the analysis declare the street already absorbed the news and is bullish. I don't have a clue when this drops but when it does the first salvo should be fast and steep. I believe Powell would never have referred back to disinflation if he thought the CPI was inflationary. Not sure if there is a leak or just interpreting his speech.

I have read your analysis and all that time agree with your assessment. Like waiting for GODOT. Seems it will never change.

[JLS]

Or ...

based on the market today, it doesn't really care what the numbers are going to be and therefore is just coasting along ...

yawn .....................

I always do buy/writes on the stock I choose to trade, and I usually don't waste much time selling those Calls after buying the shares. I made an exception today: I bought the stock I'm interested in but I stopped with that as grasshopper whispered "wait, wait" in my ear.

[RCKS]

gdl
To be honest, I don't have a strong feel for short term/near term.
Ahead of today I expected the market to open red and just bounce around today. Resulting in a bigger move tomorrow in reaction to CPI data, however.........

the strength today makes me suspicious of leaked CPI data, and in turn today's price action will lead to much higher prices

Maybe?

[gdl]

Great read. The premise that long term direction can be manipulated is not likely in the sense that any smoothing out of a market move will eventually reverse just on actual data points. You can't manipulate the earnings once analysis examine the details. s for October yes there was some magic at play. but in my mind it only stalls the inevitable and results in more pent up selling.

The real question is how to determine when their tactics fall apart. Is that when we get bursts of breakout or breakdown moves? The middle of the month I never knew such stats. The 19th to 25th of this month might just work out with a dramatic drop (IF) the CPI/PPI news can be treated lightly.

So based on your knowledge what say you for this week? So many are calling for a dramatic drop here.

[RCKS]

".....the near-term appearing to be incomplete to the downside so far."

http://www.pretzelcharts.com/

"The main thing to add since last update is for the very near-term:"



"No change to the big picture:"



"NYA is in a similar position to SPX, and appears to be incomplete to the downside:"



"In conclusion, the picture remains the same as it did on Friday, with the market within an intermediate inflection zone and the near-term appearing to be incomplete to the downside so far. Trade safe."

[RCKS]

SPX Weekly chart

http://stockcharts.com/h-sc/ui?s=%24SPX&p=W&b=5&g=0&id=p79346269434&listNum=2&a=222820001

[RCKS]

Glen

Pokersam called 2022 nearly perfectly.

This is his thread on SI
https://www.siliconinvestor.com/subject.aspx?subjectid=60011

The real story was his bet with da cheif on whether the Market would cross back above 4818 before it broke below 4114. Pokersam won and the chart in this post reflects the lines drawn for the bet.
https://www.siliconinvestor.com/readmsg.aspx?msgid=33826440

Here on November 22, 2021 he suggested 4840 would be an inflection point and 4818 ended up being our top.
https://www.siliconinvestor.com/readmsg.aspx?msgid=33585617

I will conclude with this post Glen, if you got this far.......

From: POKERSAM 1/23/2022 2:20:53 PM

1046
of 1372

Anyone who calls himself a market analyst and cannot see the huge bear market ahead is a fraud.
Many, many indicators of the stock market mania are at points unknown in history.
The mother of all bear markets lies ahead.
Perma bulls will fight the tape and they will lose the battle. They will also reveal the frauds they are
and have always been.
2022 will be a year that will be referenced for decades when discussing milestones in stock market history.
I am just telling you how I really feel. lol

[RCKS]

The Big Wall Street Firms Use Manipulation Strategies To Fatten Their Wallets
Tom Bowley | February 12, 2023 at 12:46 PM

http://stockcharts.com/articles/tradingplaces/2023/02/the-big-wall-street-firms-use-302.html

"I have been preaching Wall Street manipulation for years. And Wall Street took manipulation to a completely new level in 2022, accumulating shares of panicked retail traders after the distribution period from January through May 2022 ended. Sure, we had two more price lows - one the very next month in June 2022 and then again in October 2022, but the characteristics of a bottom and accumulation had already begun:"

http://d.stockcharts.com/img/articles/2023/02/12/f2ff9b43-51ab-45ad-8adf-cda2ebcfa429.jpg

"The accumulation/distribution line (AD line) was just one secondary indication of the manipulation that took place in 2022. We saw the AD line drop throughout the first few months of 2022 and approach year-to-date lows in May, but from that moment on, there was intraday buying that suggested the big Wall Street firms were gladly buying shares from those who believed this was the start of a secular, or long-term, bear market. Despite the still-downward slope of stock prices into year end and the start of 2023, the AD line has been sloping higher.

Manipulation At Its 2022 Core
I tracked the intraday price action for the SPY, QQQ, and several ETFs and individual stocks. There is not a single doubt in my mind that Wall Street used all of the negativity that THEY CREATED to benefit them as they were able to exit the market at the 2021 high and jump back in at much lower prices throughout 2022. Now we're seeing this manipulation come to its conclusion with the big run up in stock market prices in 2023.

Let me break down for you the price action in the QQQ in three distinct phases in 2022 and early 2023. The three periods are as follows:

January 3, 2022-May 20, 2022
May 23, 2022-October 13, 2022
October 13, 2022-February 10, 2023
Within each of these periods, I'll show you how the QQQ traded at:

The opening gap (panic reaction to news)
From 9:30am to 11:00am ET (amateur hour)
From 11:00am to 4:00pm ET (professional time)
Phase 1: 2022 Distribution
Here's the breakdown of how the QQQ traded during that January 3rd through May 20th period throughout the day:

QQQ started period at 400.41
Opening gaps (net): -29.68
9:30 to 11:00am ET (amateur hour): -68.01
11:00am to 4:00pm ET (professional time): -14.59
QQQ ends period at 288.13
There was selling during every timeframe as the distribution and cyclical bear market was quite evident.

Phase 2: Then Comes The Market Disguise
Here's the breakdown of how the QQQ traded during the May 23rd through October 13th period throughout the day:

QQQ started period at 288.13
Opening gaps (net): -52.39
9:30 to 11:00am ET (amateur hour): -10.54
11:00am to 4:00pm ET (professional time): +37.46
QQQ ends period at 262.66
Okay, this is where the charts don't tell us everything happening below the surface. The QQQ fell another 25+ points during this period, but check out the final FIVE hours of the trading day. It netted a GAIN of 37.46 throughout this period. This end-of-day strength is what strengthens the AD line that I showed earlier. Wall Street firms were steadily BUYING and ACCUMULATING, while prices continued to decline. I'm sure they'd like to thank everyone personally for their generous gift of their shares. It's Wall Street's very own version of "Go Fund Me".

Phase 3: It's Hammer Time!
The bottom is in, folks. October 2022 became the 7th October to lay claim to a bear market bottom in the last 14 bear markets - stretching back to 1950 on the S&P 500. Anyone think that's odd? There have been 14 bear markets in the past 73 years and half of them have ended in October. Aren't there 12 calendar months? Yet one has accounted for half the bear market bottoms? What a coinkydink!

Okay, so now let's check out how the QQQ has traded since the October 13th low close:

QQQ started period at 262.66
Opening gaps (net): +1.81
9:30 to 11:00am ET (amateur hour): +1.16
11:00am to 4:00pm ET (professional time): +34.07
QQQ ends period at 299.70
Wait a second! Where did all those morning gaps go? And the morning selling - what happened to that? Wall Street firms had already filled their stockings for the holidays. No more manipulation required. Now we'll all watch as the news improves throughout 2023. The Federal Reserve has already started it. They've announced we're in a period of disinflation now.

"Yeah Tom, but what about the deep recession ahead?"

LOL. Did you see the jobs report last week? Unemployment is at a record low! Jim Cramer, a former Goldman Sachs child himself, now says the Fed can achieve a soft landing. In another six months, all the bad news and retreating stock prices will be in our rear view mirror. And Wall Street firms will be fat and happy.

This article is why EarningsBeats.com was formed. To research, analyze, and inform of all the Wall Street deception. Yes, technical analysis and analyzing price action is extremely important, but it's only a part of the battle. Uncovering the "legalized thievery", as I like to call it, and teaching those interested how to counter it, is a BIG part of successful trading. I spend countless hours doing this research for the benefit of our members. I issued warnings to our members and StockCharts community at large at the market top. I also said that being in cash or short in June 2022 carried way too much risk, so I called a bottom there. I believe it was the right call and it all stemmed from this Wall Street deception. There is a TON of money at stake in our financial markets. Ask yourself a question. Do you believe that the large Wall Street firms have our best interests in mind?

Short-Term Manipulation Runs Rampant Too
We've been offering our EarningsBeats.com members a look into monthly options expiration since the day I returned to EarningsBeats in 2019. Market makers have large inventories of call and put options as monthly options expire (3rd Friday of every month). The premiums they must pay out are quite substantial. But this premium only becomes a problem at that 3rd Friday close (which is this Friday, February 17th). Do you think market makers "might" try to direct prices in a certain direction if it means they could save BILLIONS of dollars? After all, they commit their vast capital in the financial markets every day.

I'm 100% convinced that market makers direct prices higher or lower heading into options expiration Friday to save money. Consider how the S&P 500 has traded during various periods of the calendar month since 1950:

26th-6th: +21.05%
7th-10th: -4.11%
11th-18th: +12.37%
19th-25th: -7.62%
From my practicing CPA days and the audits that I managed, I know that many companies have 401(k) retirement plans. Most companies send their employees' contributions to sponsors (Vanguard, Fidelity, etc) around the 1st and 16th of calendar months. Some companies will send other days, but the largest inflows will typically occur around the 1st and 16th. Wall Street firms know this money is coming in. So, again, here comes the "legalized thievery". Frontrunning is an illegal form of buying just ahead of retail money. But when Wall Street firms buy stock ahead of inflows, isn't that essentially the same thing? That's why the above annualized returns are strong from the 26th to the 6th and from the 11th to the 18th. Wall Street firms buy ahead of inflows, driving prices higher. And then comes the money from individuals and pensions, driving prices higher. Historically, the 7th to the 10th represents a profit-taking period. I believe the 19th to 25th is a combination of profit taking AND price manipulation due to options expiring. Monthly options expiration can only occur from the 15th of a calendar month through the 21st. The 3rd Friday of the month must occur on one of those 7 calendar days. The earliest the 3rd Friday can be is the 15th of the month and the latest is the 21st of the month. There are reasons why we would see options-related selling into the week after Friday options expiration, but I won't get into that here.

It's also very interesting that the worst-performing consecutive calendar days on the S&P 500 are the 19th and 20th. Typically, the stock market rises into the middle part of the calendar month, resulting in an imbalance of in-the-money calls vs. in-the-money puts. That helps to explain why we see weakness from the 19th to the 25th. It's another example of market makers running a "Go Fund Me" campaign. Unsuspecting retail traders pay the price, unfortunately.

We make certain that our EarningsBeats.com members are at least aware of stocks that could be subject to short-term market maker manipulation due to options expiring. I believe we have directional clues short-term that can significantly improve our trading success and performance. Beginning this weekend, we have launched an extremely affordable "Max Pain" service designed to provide our members clues about price direction this week. I hope you take advantage of it."

Happy trading!

Tom



Tom Bowley
About the author: Tom Bowley is the Chief Market Strategist of EarningsBeats.com, a company providing a research and educational platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR), providing guidance to EB.com members every day that the stock market is open. Tom has contributed technical expertise here at StockCharts.com since 2006 and has a fundamental background in public accounting as well, blending a unique skill set to approach the U.S. stock market.

[gdl]

BIAS always determines how you view the world. Perma-bears and perma-bulls have an agenda to prove they are right. it supersedes all other considerations. ONLY a very rare person comes along with no bias and only uses a system with tweaks over a long period of time. That's usually why Pollyanna's capitalize on the Bull moves and Cassandras on the Bear. They lose in opposing camps. There is a decidedly strong statistical analysis that shows most people are optimists and see things in the best light.

https://www.sciencedaily.com/releases/2009/05/090524122539.htm#:~:text=Pinterest%20LinkedIN%20Email-,Despite%20calamities%20from%20economic%20recessions%2C%20wars%20and%20famine%20to%20a,humans%20are%20by%20nature%20optimistic.

I know my faults. I see things develop in a negative fashion way before it actually takes place. I am a pessimist and have radar that tunes into this trait. I also know this year will go down as one of the steepest drops in history. We have just entered the Catch-22 scenario. Without a weak labor market the FED will do what it MUST. The housing market and inverted yield curve has historically been pretty darn good at determining a recession. IF we do get one this historically tight labor market should unravel, the earnings picture, while currently weak should turn decidedly negative. BUT the CATCH-22 is INFLATION. It will either exacerbate or relieve the pain somewhat. I believe in natural cyclical patterns and one is Inflation, a 40 year cycle. I presented the 12 points of concern already.

My ONLY dilemma is when does the street realize this. Like a known pandemic and known financial pattern that was completely ignored for many weeks. Mind boggling but then again we had a president that was the most corrupt incompetent destructive force on this nation to this day and is the front runner for the Republican nominee. No amount of technical prowess, scientific achievements, or learnt mistakes from the past will change this behavior.

Immediate market behavior. Irrational but that has no timeline to correct. Triggers. Only one I see as immediate is the CPI/PPI reports. Everyone agrees. Powell a few weeks ago reiterated the Disinflation argument. Is this PROOF that the CPI come Tuesday is in line or tamer than expected? I have concluded the exact opposite based on Januarys readings so far on manufacturing and jobs. Is there any argument ANYONE is using to determine the Tuesday results?

[GLENO34]

I have not read Poker for years. How has he been doing on his calls.?

[RCKS]

Hi Jerry

Thanks for comments. I'm paying attention right here and appreciate your takes

[jxyzobrien]

c wave down completing and running out of juice
but spy 20da ma not tested
bulls not working
put call 1.10 so bears are buying puts

[RCKS]

Glen

Pokersam has shifted back to Bearish, calling 4195 a top for now..........

From: POKERSAM 2/10/2023 9:31:20 AM
1 Recommendation
1371
of 1371

I thought this bear market rally would at least get to 4250. Now it looks like 4195 is the best it can do.
So, I was wrong.
Now the question is what is next.
After putting in another bear market lower high we will drop and put in another bear market lower low.
All of those "analyst" who have called another bottom of the bear market at 3491 will be disappointed again.
3491 has only been their 6th absolute bottom call since the correction began on Jan. 4th. 2022.
There will be more before this is over.

[RCKS]

"....bears are still very much in the near-term game here...." Yes they are!!!. my words.

http://www.pretzelcharts.com/

"On Monday, I noted that bulls needed to recover the breakout or they were at risk, and SPX now appears to have head-fake whipsawed (some people only refer to downside whipsaws as "whipsaws" and upside breakout/reversals as "head-fakes," but I generally refer to fake breakouts in either direction as "whipsaws," since the informal use of the term simple means "subject to a double loss," which is why I sometimes use both terms for upside "whipsaws") its most recent breakout."



"NYA has remained stalled since effectively reaching its target zone (coming within less than 1% of the target may have been close enough):"



"And, of course, as noted before, Blue 2 remains on the table:"



"In conclusion, bears are still very much in the near-term game here, and normally one would expect some downside follow-through to the pattern so far (though worth being aware that it's three waves down from 4176 so far, which, 9 out of 10 times, means it either needs to become five down, or it will turn into an expanded flat that runs back toward 4176 before heading lower later; 1 out of 10 times it's something weird like a double three). Trade safe."

[RCKS]

Powell

http://www.pretzelcharts.com/

"Powell spoke yesterday, and I found some of his statements interesting, one of which was: “There has been an expectation that [inflation] will go away quickly and painlessly; I don’t think it’s guaranteed that’s the base case. It will take some time.”
Implicit in this statement is that, so far, things have been "painless." (I agree with that assessment and have said so a number of times.) Explicit in his statement is that Powell does not "think it's guaranteed" that things will remain painless.

Seemingly in an effort to drive home that point, he added (emphasis mine): “If we continue to get, for example, strong labor market reports or higher inflation reports, it may well be the case that we have to do more and raise rates more.”

Powell seems to be asking: "What exactly do I need to do to create more layoffs?" So the implications of that are interesting to ponder.

SPX has traded sideways since last update, so there's nothing to add in that regard. Yesterday closed at the blue trendline, with no clear whipsaw or breakout yet:"



"NYA has also traded sideways:"



"Beyond that, not much to add to the prior update. Trade safe.:

[gdl]

As i insisted 14 months ago this is not transitory but a 40 year cycle. Not only will we not see further tempering of inflation we are entering the next round of spike moves. Like the pandemic it wasn't a matter of technical data or any system but common sense. The proof has already been shown in just one days data point. Friday exploded on jobs, 11 million jobs for hire, and manufacturing that went from contraction to expansion in a big way from December to January.

We have never tamed inflation and wage growth in a tight labor market. NEVER! this is economics 101 or perhaps i am missing something. I deal in logic and common sense and when the market ignores both it does so for a short period before it realizes the mistake. The other huge problem is China. The data from them last month was as explosive as ours this month. Their economy is now opened up and they are on a spending spree.

If the above statements are incorrect please refer me to any article that contradicts it. If the stock market and our economy will ignore these factors i presented then i don't understand the basics of how economies work. As for earnings the premise to hold up this market at these levels is that in THREE quarters from now we will see double digit earnings. Nine Months? Really? because if you drop that assumption out we are extremely overvalued here.

I am just presenting a layman's interpretation of why this market is ripe for a crash. If the CPI/PPI for January is also a shocker it is Game Over!

I believe we hit the highs on 2/2/2023. Should know soon if that hold true.

[RCKS]

"....bulls need SPX to recover its breakout, which would clear the way for further upside."

http://www.pretzelcharts.com/

"So they're keeping things interesting for now. Last update noted that NYA had come exceedingly close to its two-month-old target:"



"And now SPX is threatening to whipsaw its most recent breakout:"



"This action keeps blue 2 on the table for the time being:"



"In conclusion, bulls need SPX to recover its breakout, which would clear the way for further upside. If they cannot do so and this breakout whipsaws, then the confluence of the red and black trendlines on the final chart above may be worth keeping an eye on as a potential downside target area. Trade safe."

[GLENO34]

4043 is the Daily SPX target, the 10EMA...JUst have to see if the down signals are going to work yet


https://schrts.co/QmScFMah

[GLENO34]

Thanks RCKS...That is a long story..I will read it later..Thur the day.

[gdl]

Whatever you do, don't look at the 40 year inflation cycle. Above all else pretend or dismiss the current inflation spike as a fluke and it will revert back to disinflation trend. I also suggest you don't look at the debt structure and what will happen if we do continue to spike higher. in fact Friday was such a dramatic multi-level report it shatters wall streets argument for lower inflation and the need to stop raising rates. What was the FED thinking? I will us your logic. What happens every time inflation cycle resumes? We not only have the tightest labor market on record and the longest, we have a surge back to all time highs in employers begging for workers. Wages are starting to increase and there i no sign it will reverse anytime soon. Inflation by definition happens when wages growth take hold. Friday report for January also included manufacturing data. It also spiked higher and was a shock!

I use Fridays data point as a time bomb that just got started. When the bomb is set for is anyone's guess but it started. Real world bets has to do with projections on earnings. All else is nonsense. What is the earning projected before and after the quarterly earnings that are closing? Not wall streets projections but all major companies in all sectors. Hint: Not good!

Do you know that Buffett uses and acknowledges these cycles. In a debt ridden world inflation is the thousand pound elephant. All else is inconsequential. Watch the dat on inflation. Watch the opening in China. it was just as explosive last month. Combined the 2 largest economies in such a predicament today can only fuel inflation a lot higher. Demand has exploded. Forget supply.

I am actually as shocked about the way we perceived the world around us today as i was the day the Pandemic was announced.

Want real world early TELLS? Look no further than BITCOIN. An absurd concept with no rules and a silly belief it is not being influenced by governments. It too has defied the bear view. The Crypto Trader is pounding the crash warning with 4 distinct divergences. I "HOPE" it leads the parade as a good tell.

[RCKS]

History Tells Us We're Going A LOT Higher
Tom Bowley | February 05, 2023 at 11:50 AM

http://stockcharts.com/articles/tradingplaces/2023/02/history-tells-us-were-going-a-112.html

"I'm a follower and believer of history when it comes to the stock market. After years of research, I understand that some aspects of U.S. equity performance are rather transparent and resulting technical signals generally can be relied upon. There were plenty of warning signals to open 2022 that suggested we were in short- to mid-term trouble and I wrote and talked about them throughout the first six months of 2022. But many of my signals changed in mid-June, leading me to call a bottom in June 2022. The risks of remaining short were too great, while the reward to risk on the long side had improved considerably. Those who transitioned back into the stock market last summer have been handsomely rewarded with the S&P 500 up 13% now off that low.

I was criticized for calling for a bear market before it started and later criticized when I suggested the bear market was over - well before anyone else suggested it. It takes thick skin to go against the masses, but I simply call what I see. It helps that I'm not brainwashed by all the negativity in the media. The lesson here is to keep StockCharts.com turned on and all the outside noise TUNED OUT!

The Fed and Inflation
On Wednesday, the Fed acknowledged it's winning the war on inflation. We'll probably see one more 25 basis point hike in the fed funds rate, but beyond that, I see a much more dovish Fed. I believe rates will come down later in 2023 and, if the January jobs report was any indication, a very soft landing is entirely possible. Growth with falling rates is NIRVANA for equity prices. In 2022, we had two quarters of negative GDP with rising rates. That's what the S&P 500 priced in during its 27% cyclical bear market drop. The NASDAQ fell closer to 40%. It was all baked in.

Bear Market: Cyclical vs. Secular
Many were, and some still are, calling for a secular bear market, which is a long-term bear market. The problem is that you can't call a long-term bear market until it confirms. We've had 3 secular bear markets since 1950. 3!!!! If you're counting them on your hand, you still have two fingers left. Put another way, they don't happen very often, yet the Peter Schiffs of the world are granted way too much air time on CNBC to spew their nonsense. Think about it. Why would CNBC continue to cater to someone who has repeatedly missed the biggest bull markets in history and called the market wrong year after year after year? It's the train-wreck approach to driving viewership, an embarrassment if you ask me.

The Big Picture
Anyone who has been to any of my market outlook webinars knows that I start off every one of them with a BIG PICTURE 100-year chart of the S&P 500. Here's what it currently looks like:"

http://d.stockcharts.com/img/articles/2023/02/05/af86fd0b-bfcc-47e9-94c7-628b74ba74c3.jpg

"Honestly, how can you look at this chart and continually be bearish U.S. equities? We are in another long-term period (secular BULL market) where U.S. equities are in favor. There will occasionally be short-term periods of weakness, especially after huge rallies like we had in 2020 and 2021. Those are cyclical bear markets that require patience. You need to recognize those periods BEFORE they happen, because swing trading strategies will no longer be rewarded and you can lose a lot of money quickly. That's why I told EarningsBeats.com members at the beginning of 2022 that we needed to realize that conditions would change and swing trading wouldn't work. You either need to move to cash or become more aggressive on the short side. In early February, I hosted a webinar, Anatomy of a Cyclical Bear Market, to help our members understand what we were going to be facing. If you simply stuck with what had been working, you'd be no better off than Cathie Wood, who managed her ARK funds into the ground over the past couple years. She never adjusted to the cyclical bear market at hand and her investors paid a ridiculously-hefty price. It should have been avoided.

But let's get back to that chart above. I use it for perspective. And "perspective" is my word for 2023, replacing "patience" in 2022. This big picture view helps me weather markets like 2022, believing that we'll come out of it stronger than ever, returning to all-time highs. But you have to exercise patience during the turmoil. During secular bear markets, the monthly PPO turns decidedly negative. That has yet to happen as the monthly PPO remains positive and looks as though it's beginning to turn back up. Also, during secular bear markets, the monthly RSI dips well below 40. The monthly RSI has already bottomed above 40 and has moved back up into the 50s. You need technical confirmation of a secular bear market and we're seeing none.

The Future Path
We've seen a very nice rally. January was one of the strongest on record, the 9th best January on the S&P 500 since 1950. Strong Januarys almost always result in very strong years. It's not a perfect science and certainly not a guarantee, but there's a lot of history that suggests the probabilities of a strong year increase substantially. Also, the biggest issue that we faced in 2022 was sentiment. It was way too bullish at the end of 2021 on the heels of the biggest 22-month increase in the S&P 500 since the 1930s. We badly needed sentiment to turn bearish and that only happens one way - a lengthy bear market where everyone's psyche turns from ecstasy to despair. We needed all the YouTube experts (sarcasm) unanimously believing it was impossible to see a market bottom and that our only path was lower. That's the type of mentality that marks bottoms.

Fortunately, after months of pain, we got to where we needed to get and the bottom formed. The October 2022 low will mark the 7th time in the last 14 bear markets (6 of 11 if we only look at cyclical bear markets) that the bear market bottom occurred in October. Because many investors do not recognize the end of bear markets, they also miss out on the huge market gains that typically follow. Below is a table of the 11 cyclical bear markets since 1950, showing the gains made in the following 6-month, 1-year, 2-year, and 5-year periods:"

http://d.stockcharts.com/img/articles/2023/02/05/b7fbf2d6-8b6e-4dde-a8d2-7e373edb7f68.jpg

"Look at those 1-year returns after cyclical bear markets ended. The worst 1-year return was 29.59%. If we apply that WORST return to the October 2022 low, then we should expect the S&P 500 to be at 4525 by October 2023. If we apply the AVERAGE 1-year return of 42.50%, then we'll see the S&P 500 at 4975. All of a sudden, all-time highs don't seem to be that far away.

Unfortunately, this is the type of research at EarningsBeats.com that CNBC and other media outlets could produce if they truly were interested in providing valuable educational content for their viewers. But it's all about the mighty dollar. Education takes a back seat to profits. Their interests lie in advertising dollars and scaring viewers into watching with ridiculously-bearish headlines, and the quicker that everyone recognizes that, then the quicker they can walk away and focus on what's truly important."

Happy trading!

Tom

[gdl]

I am as convinced of a crash as i was when the overseas Pandemic was announced. it was inevitable and we even had a 100 year old chart to follow. yet we didn't. Most shrugged it off with insane excuses. The start of last year, same thing. We project a Pollyanna approach to everything. Transitory inflation. Now after the bottoming pattern late October everyone is not only convinced inflation is dying they actually think we will hit a sweet spot for earning. ONE DAYS data proved them wrong. CRYSTAL CLEAR the path we are on and i can see images of the Pandemic crossing the ocean.

Facts: Earnings for the last 6 to 8 quarters dramatic change. Inflation spike no fluke not transitory. TODAY we got January data and it showed a US economy surging back. this on top of the worry of inflation. We just opened up the Chinese market and that also shows a huge spike in demand. Manufacturing and new orders SPIKED in January! Jobs market at unheard of employment strength and longevity. Jobs begging for hire once again hit 11 Million. Next week there is (thank goodness) no economic reports due. I rule out a crash next week. SB easy call.

The variety of the next drop might look like the crash of 29. Phytologically we went from despair to hope to glee over a Goldilocks scenario dead ahead. Turning into a nightmare. There is absolutely NO WAY this economy can survive another round of rate hikes. Burry the famous hedge fund guy critically issued a SELL tweet and took it down. What the FED was thinking to placate this market is mindboggling.

SPX 3200, the unfinished target, is no longer the final target IMO. I expect an initial drop to hit there and possibly bounce off of but before this year is out 2500 on SPX seems more likely.

*** This year should be an historic drop and with it the start of the end for our economy. *** Too dramatic? Too impossible to comprehend? We have a man that currently leads the GOP for re-election after his exposed crimes and inhuman behavior. Not only attempting a coup but wanted his own VP killed. If he lead the charge that day it would have changed NOTHING! the man walks on water. If we can live today in the current political environment we certainly can cause our own demise economically also.

Count down for the CRASH as today marks the start of such countdown. The button has been hit and the clock ticks.

[RCKS]

"......the potential of blue 2 (blue 2 would be technically invalidated north of 4325)."

http://www.pretzelcharts.com/

"On Wednesday, Chairman Pao(well) announced that financial conditions had tightened significantly (even though, by most objective measures, they have not) and that the "disinflationary process has started," hence that the Fed was probably just going to call it a day soon and get back to golfing and loan sharking, or whatever it is the Fed does when it's not creating new bubbles while actively dropping money from helicopters. The market responded, shockingly, by rallying.

Chairman Pao also cautioned that it would be "premature to declare victory" against inflation, and that inflation was "still running very hot" -- but most traders were too busy screaming "buy!" to hear that part. Interesting to note that, while goods are experiencing some disinflation, commodities and services are still accelerating.

Chart-wise, the "to B or Not to B" question from way back on December 16 (which revolved around the suspicion that 4100 may have been a corrective B-wave high and thus ultimately fated to be broken) has finally been answered in the affirmative. That of itself does not invalidate the potential of blue 2 (blue 2 would be technically invalidated north of 4325)."



"Near-term, SPX broke above the next trend line:"



"Finally, NYA has come very close to its "textbook" upside target:"



"In conclusion, SPX finally answered the "to B or Not to B" question (maybe phrasing it as an existential question caused the market to think extra hard about it) and broke above the next trend line. Now bulls want to see that line hold, and not whipsaw as it did in 2020. NYA's proximity to its textbook target keeps the option of blue 2 on the table, but it's never a bad idea to await an impulsive decline before doing anything overly aggressive on the short side. Trade safe."

[gdl]

To Be Clear! I am NOT calling for a crash on any specific timeframe other than the first half of this year. Wide latitude. It will however be a frightening one for the record books drop. In fact any crash should be followed by a brief big dead cat bounce but soon after roll over and have many rolling crashes in a relatively short period of time. A devastating 2023. Michael Burry seems to think in similar terms.

[gdl]

PUMP and DUMP! Biggest high tech after hours trouncing. Giving back some or all of recent gains BUT the trend is extremely bullish. Forgive and forget market. Not a pretty picture of big names getting taken down after hours today. But the close on Friday should actually be positive for the general market. the street ha already decided macro economy is going to be in a Goldilocks scenario.

I am curious to see how the market reacts tomorrow. I think we are in the very final stage of a spike move up lasting perhaps 2 more weeks. We should have a great clue by how we close Friday.

Exciting times! we should have that infamous CRASH after this next spike. I am talking a 4 day rout and perhaps 20% drop in that time. But getting ahead of myself here. Tomorrow has to shrug off the big name high tech earnings misses after hours today.

[gdl]

Even RCKS must be BULLISH here! it seems reality is only what the market tells you it is. that's why we get crashes. A slew of hedge funds screaming the sky is falling and declared this coming drop will rival the Great Depression. i happen to agree! Earning by anyone's standards is dismal and revisions continue sideways or downwards. The Goldilocks scenario is popular now. Too bad the data already in on Chinas reopening was an EYE OPENER. It seals our fate on Inflation. Commodities should spike first followed by everything else. DEMAND will surge in the country that is equal to ours in strength.

FACT: 40 years of disinflation has produced huge boom/bust scenarios on low costs, low rates, and a long period of disinflation. The indebtedness of the world will be seen soon. When China's reopening shows continued spike in demand and inflation there will be a huge debt repercussion.

Disinflation is a cyclical phenomena as is inflation. no such thing as intervention. 4250 on SPX should be a given. I suspect it happens fast. Anywhere between 4250 and 4400 will be the crash zone. Watch China's data points. it will foretell our fate. WHEN the street realizes this is another matter. All i know is 2023 will end over 50% lower than the peak. It will be a rolling crash and last many years with a decade or more of bottom feeding.

This is the most monumental period in our short history. Be prepared. Think I am over reacting? Will know soon enough.

[RCKS]

Pokersam has flipped to Bullish, he was holding onto a descent to 2200 spx

"We could hit 4250-75 before rolling over. Confirmation is at 4100."

From: POKERSAM 1/31/2023 10:56:13 AM
2 Recommendations Read Replies (1)
1360
of 1367

We could hit 4250-75 before rolling over. Confirmation is at 4100.

[RCKS]

".....we'll likely get some resolution soon, courtesy of the Federal Reserve."

http://www.pretzelcharts.com/

"Today is a Fed day, which at least (likely) means that for the next update, we'll be able to talk about something other than "no material change." I've been saying "no change!" so much lately that I'm starting to feel like I'm walking down Broadway at lunchtime, trying to placate aggressive panhandlers.

So for today's update... sorry, I only have credit cards on me, no (spare) change.

But! I did want to call attention to the blue trend line on the chart below, in case it becomes relevant:"



"SPX did whipsaw the first breakout of the rising wedge, but so far has not followed through on the downside:"



"The intermediate view is still the same:"



"In conclusion, we'll likely get some resolution soon, courtesy of the Federal Reserve. Trade safe."

[RCKS]

"Nothing to add to last update, so please refer back to that if needed:"

http://www.pretzelcharts.com/






Trade Safe

[RCKS]

Ready, Set, COVER! Breakouts Are A Short Seller's Worst Enemy
Tom Bowley | January 28, 2023 at 01:20 PM

http://stockcharts.com/articles/tradingplaces/2023/01/ready-set-cover-breakouts-are-801.html

"It was one week ago that I wrote about Wayfair's (W) big breakout in the Don't Ignore This Chart blog. It had just broken above key resistance and volume accelerated to its highest level EVER! And EVER is a very long time! 22 million shares traded on Friday, January 20th as W gained 20.25% and short sellers suddenly found themselves in a box. Either BUY on Monday and end the pain or take a chance on massive unlimited losses as the strength continued. The smart ones ended their pain. For others, it's become possibly the worst migraine imaginable! I said it would be an interesting week and it sure was as W gained another 36% last week. The bad news for the short sellers is that I don't think the pain will subside next week either. Here's the chart, showing yet another closing breakout on Friday's close:"

http://stockcharts.com/img/articles/2023/01/28/f2eaf695-4bfa-4b18-a5f8-29a916cfda4f.jpg

"The volume last Monday set another record as 27.5 million shares changed hands. Many short sellers heeded the breakout and ended their misery after taking a big loss. Others stubbornly refused to give in and they are likely to face much more pain in the week ahead.

Did you miss this exciting opportunity on W on the long side? Well, I believe we have another stock that looks almost identical to Wayfair and it just broke out on Friday on more than triple its normal volume. There's an increasing chance that we see an explosion higher next week. I'm featuring it on Monday morning in our FREE EB Digest newsletter. If you haven't already subscribed, simply CLICK HERE and enter your name and email address. There is no credit card required and you may unsubscribe at any time."

Happy trading!

Tom