.(click on the chart image above to expand to full size)
The weekly bar chart above has been the ultimate roadmap for the market rigging that has been going on since 2009…
When you look at the chart above think about five waves and then notice the two yellow highlighted ovals that show the only two exceptions to the stop sweep/reversal pattern whereby the pros immediately reversed at each poke below the last higher low as happened at points 1,3,4,5, and now 7.
Point 2 and 6 indicated where major pullbacks occurred that were NOT immediately bought and those indicated the major pullback waves 2 and 4, if my ongoing thesis remains correct. Point 3 and now point 7 are the stop sweep/reversals used to create double bottoms after the wave 2 and wave 4 pullbacks completed.
If the game continues as it has since 2009 then we could be starting wave 5 now that will ultimately go to new highs and finish the engineered impulse off the bottom that has been fueled by funny money injected into the markets starting with ARRA and continued with quantitative easing, which is just a fancy way of describing blatent market rigging by the central banks.
So, let’s talk some more about the weekly chart above…
The recent low at 1804.25 came at the precise bottom of a shallow parallel bearish channel (see descending red channel lines on the chart above). If the pros were looking to create the maximum amount of bearishness with the absolute minimum amount of structural damage, while creating a three segment ‘corrective’ wave 4–that is exactly what they have thus far achieved.
Note that the pro’s ultimate pullback target was a stop sweep/reversal under the LT range bottom at 1814. Also note that we have had no weekly closes under the last higher pivot low at 1853.25–so they have stuck to the paradigm yet again! The current weekly bar closes today and they have already painted a higher high/higher low for the week, which is bullish, and if today’s close remains strong we could also have have a higher weekly bar close, which is a technical reversal signal.
Seriously, you have got to love that weekly chart! Now, of course, there is no guarantee that the current bullish configuration will continue to hold–but if it does, remember that weekly chart above and how deadly accurate it has been in showing how and why the pros have been doing what they are doing for the past 7 years.
The fourth wave in an impulse is always the trickiest to trade and if this double bottom holds here the market action since July of last year has been treacherous, to be sure–but Stops and Targets has been dead on with the analysis and trade signals. It is rare that a Bull 9 does not transition back to a Bull 10 (basically, that only happens at the start of a major wave 2/wave 4 pullback) and the double top (to the absolute penny) in July followed by the lower high in November was a very nice piece of subterfuge by the pros.
The market is now more than 100 points off the recent bottom and we have the anticipated major stop sweep/reversal in hand. Let’s see how it goes from here on–but if this is the start of a new major wave higher then things could start to get a bit more challenging for the bears who have been enjoying a sweet ride over the past month. Failed rallies could be replaced by failed pullbacks if the pros have indeed switched sides back to the bulls now that they have covered and reloaded. We should know that soon enough. Just pay attention to the pressure exerted to see which side gets trapped and hammered.
I have had some interesting talks with fellow analysts and traders recently and most of them have been scared to death by the market. Some have experienced huge paper losses on core positions. My analytical take all along has been that we were either going to get a bounce centered around 1853.25/1814 area at the bottom of the LT range…or that in a worse-case scenario we could see a drop to the rising VLT trendline. It is looking promising for a bounce from the pro’s minimum pullback target to LT support at 1814, which was also the main downside target in Stops and Targets. The last major bull/bear line I pointed out at 1804.25 is looking pretty good at this point.
Make no mistake, this market is being carefully engineered as I have pointed out many times in the past. It helps to have a roadmap of what the pros are doing–and the chart above, coupled with the trading signals generated by Stops and Targets, is just that. This is about as close to being a legal ‘insider’ as it gets.
Hope everyone has a great weekend.