Time To Die…

Remember that scene at the end of Bladerunner when Batty saves Deckard’s life and then, shortly before passing away, tells him this:

“I’ve seen things you people wouldn’t believe. Attack ships on fire off the shoulder of Orion. I watched C-beams glitter in the dark near the Tannhauser gate. All those moments will be lost in time, like tears in rain. Time to die.”

Beautiful… one of my favorite scenes in movie history.

Anyway, the medium term trend in equities has reached that very inflection point, let alone it has pretty much worn out my patience and I’m the type of trader who has learned to sit and watch for long stretches of time. Let’s start with the short term squiggles first and work ourselves up in intervals toward the long term:

Here are the hourly spoos, which are painting a slight inverted Head & Shoulders pattern. Whether or not you recognize it as a valid pattern may be secondary as technically we need to see a breakout here soon. This looks like an attempt to paint a floor and thus it needs to gain traction – otherwise, as our resident convict teaches us, the inverse will happen. So today’s session is extremely important and if we stagnate now then there better be a magic lift after hours.
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Here’s the daily spoos which is pretty much in line with the AUD/JPY. Last Thursday I expected some kind of reversal attempt and we got it. But looking at these candles it’s apparent that there is upside resistance – or a lack of upside conviction. Thus this could turn either way – maybe the bears are ready to finally walk through that wide open door?

This is the most important chart for this week (until I find something better – LOL) – the weekly SPX shows us a brand spanking new NLSL and we also have a NLBL. How sweet is that? As we are sitting at the NLSL right now the onus remains on the bears to drive this thing lower and close below 1140 by Friday. That event in turn would mean that we are going all the way to SPX 1K.

Which I may add would also nicely line up with the bearish price objective on my SPX P&F chart.

Finally, the monthly – not looking so hot, is it? We are now almost guaranteed to close lower five months in a row. This means that the odds of a reversal next month are significant – yes – over 97% if I recall. Which often doesn’t mean much because it was already in the 90 percentile this month. I would definitely want to be long if we get a lower October, that’s for sure.

So the bears should get a move on here to resolve that NLSL they triggered in August. If we bounce in October then we are looking at a minimum of two months favorable to the longs. And although we could continue lower after that there would be significant support looming in the form of those two SMAs. Which by the way are still not dropping – the 25-month SMA is pointing up and the 100-month is going sideways.

Bottom Line: I think it’s time to die – and that means this week – that simple. Once we hit October and we still trade in this range – well, suffice to say that I would not want to be caught delta negative.

Cheers,

Mole