Sideways day setting up for a larger move and/or head-fake on the jobs number tomorrow. Today was an odd situation for my System in that SPX formed a 1-day bullish swing with candle body in the new trend direction but not beyond 0.2%...so no official trend change yet. Let's see how this one turns out.
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I was struck by an epiphany this morning. An SPX LDT from May 2015 (slightly different timing for some indices) to April/May 2016 would fit my projections, match the opening salvo in CY2007 albeit to a larger time degree and simultaneously explain much of the overlap and failing rallies.
Below, I ever-so-slightly tweaked my CY2015-2016 H&S chart to include a potential LDT. It doesn't preclude SPX from rallying above 1947 in the coming days, but it does suggest SPX will drop closer to 1750 than 1800 in the coming weeks in order to ultimately reach 1600-1650 in April/May. This would be enough of a deviation from CY2008 to throw people off while maintaining the same general gyrations and timing that bots, sentiment, cycles, elections and monetary tightening are likely causing.
The LDT would also be supportive of the short bounces depicted. The meaningful rallies in CY2014 and CY2015, mostly in the bull market, lasted the following number of months: 2, 3.5, 1.5, 2, 3.5, 0.5 and 1. The meaningful rallies in CY2008 during the bear market lasted the following number of months: 0.5, 2, 1, 1 and 1.5. For double-bottom situations, I counted rallies from the end of the double-bottom, not the first/lowest bottom. Thus, the charted 1 to 1.5 month rally from February and 2 to 3 month rally from April/May are very reasonable.
As I mentioned recently, if SPX falls to 1750ish next week, we'll likely see a huge rally back near max option pain on February 19th OPEX at SPX 1850-1900. If SPX rallies past 1947 in the coming days, I could see a scenario where SPX gyrates between 1900 and 1970s into OPEX or runs away from max pain for the 2nd month in a row down to 1750ish. Today's rally hasn't been real convincing thus far but could trigger a bullish swing if it can stay up. The current weekly red indecisive candlestick has led to almost immediate pain 8 of the last 10 times with pain delayed for 1 week in the other cases, so bulls probably need a positive close today and a strong week-ending rally to produce the short-term bullish/neutral scenario. Good fortune.
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