T3 Live

Crude Canary?


This week the Fed left interest rates unchanged.

AAPL exploded on earning's.

FB exploded 5 points after reporting but tailed off to close near session lows.

But the SPX remains range bound.

Yesterday after the bell, AMZN ran up but has given back the lions share of those gains.

What will it take to break the index out of this 2 week trading range?

Yesterday a trader pinged me saying a breakout is on the table because the resolution to consolidations is in the direction of the underlying trend.

Yes, but not if a buying climax has played out on a culminating 5th wave up from the January lows.

I can't help but wonder if the current flat on the dailies isn't a fractal of the weekly pattern going into late July last year.

That long weekly flat did not resolve to the upside. It elicited the largest one day point decline in history in August.



While the prevailing sentiment amongst market participants is extremely bullish, this push over 2100 may be a mirror image of the move into the March 2009 low.

That decline undercut the primary November SPX low by 75 points over 2 to 3 weeks.

Our current high has overthrown the key 2100 level by 75 points over 2 to 3 weeks.

At the same time a Measured Move on the SPX from the Brexit Low has been satisfied in tandem with a possible 3 month Megaphone or Broadening Top.

At the same time the market has shrugged off a slide in oil down 21% from recent highs.

Remember the first half of the year when oil and the SPX were in lockstep?

NYMEX_CL F_D -- LIGHT CRUDE OIL {Delay10} 072816

Is the market poised to play downside catchup to oil or with oil testing its 200 day will this be a catalyst for a push higher if oil rebounds.

Is crude a canary in a bear den, the calm before the storm or is the market shrugging off the slide in oil a sign of strength?


As a refresher the SPX sideways stint is playing out from 2174 into July 20, a level and time frame flagged over a month ago.

Why? July 20 ties to a possible low to high to high cycle from January to April to July this year.

At the same time July 20 is straight across and opposite 2174.

2174ish is 360 degrees in price up from the Brexit low and 2 cycles of 360 degrees up from the low of the year.

Likewise July 20 ties to the 1 year anniversary before volatility came out of hibernation as well as the 9th anniversary of the primary high in 2007.

August will be the Fibonacci 34th anniversary of the major bear market low in 1982.

So let's count the Fibonacci sequence from 1982.

5 years later was the crash in 1987.

8 years later was a July high and cash into October.

13 years later was 1995 the low for the kickoff of the 5 year run into 2000.

21 years later was 2003 the kickoff of the rally into 2007.

August 2016 should be pivotal.

Interestingly, the run up from the August 2011 low to now is 5 years just as the advances from 1995 to 2000 and 2002 to 2007.


Bulls like to see record prints on Friday's in a bull market, but if the market closes poorly today it may be a sign that scale up sellers are hitting the bid with earning's from FANG and AAPL indicating this is as good as it gets—at least for the time being.