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Dr. Stocks-PHD Twenty year Wall Street veteran. Hollywoods direct line to Wall Street. Specialize in market timing and predictive modeling. Follow my updates via twitter/tkathlinastocks and at my blog http://traderstocksets.blogspot.com/
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  • S&P 2007 TOP PATTERN ALMOST CONFIRMED

    On August 7th I posted three different years of potential top patterns for the S&P: 1983, 2011, and 2007. At the time I indicated the 2007 top pattern to be the highest probability and posted this chart comparison; marking the current location between 2012 and 2007 with the number three.

    The S&P had completed three lower highs and we were watching for a marginal new high into Fib resistance.

    (click to enlarge)

    Just like the pattern in 2007, the S&P index exhausted into a new marginal high at Fib resistance.

    (click to enlarge)

    Here is the new combination chart of 2012 over top of 2007. We can now match up four distinct completed waves.

    Notice the next expected move is below the 200 day moving average to form a double panic bottom with the previous low. This then sets up FED QE3 action that will rocket the market higher to a new marginal high, probably 1500 S&P.

    This last move will bring in all players and extreme bullishness on Wall St. However, gas to $5 a gallon along with all other commodities to record highs-the real world economy collapses.

    Finally Wall St will realize the FED has used their last bullet. With the market at record p/e valuations, stocks begin crashing down to a 1 to 1 ratio with GOLD. (One ounce of Gold equal to one share of the Dow)

    (click to enlarge)

    The last two charts confirm our 2007/2012 four data points comparison.

    The S&P has moved 270 points in 270 days from the November 2011 low; squaring of PRICE AND TIME into the Fib resistance.

    Ninety days from the June/2012 low is September 2nd; another strong time multiple for ending the up move.

    (click to enlarge)

    The last chart shows a struggling trend that turned Parabolic; ending in a false break high into Fib resistance. Another strong indicator of a completed trend.

    (click to enlarge)

    Conclusion:

    Our 2007/2012 top comparison thesis seems to be the strongest possibility with four similar data points confirmed.

    The index has also squared price and time: 270 points up from the low at 270 days. This squaring was on a parabolic exhaustion style move, into calculated Fib resistance.

    Should this pattern hold, we can then forecast a move below the current 200 day average on daily at 1333, down to a double bottom either at 1280 to match the June low, or down to 1150, November 2011 low.

    We forecast at that time, probably in December 2012, in order to try and salvage Christmas, the FED will panic into QE3, sending the S&P back up a few hundred points to a new and final high. At this time, I believe that top target to be around 1500.

    Tim Kathlina

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: SPY
    Aug 23 12:35 PM | Link | Comment!
  • S&P TOPPING PATTERNS TO WATCH FOR AUGUST 7TH

    On July 6th I posted this chart with a secondary count S&P price target of 1400. At the time I thought the index could reach that level by the FIB ending date of July 20th.

    The market breached the 1400 level today; pushed by the Federal Reserve 600 million repo. The current market environment which sees all news as favorable for stocks, is typical of all topping markets in history.

    The question:
    Can the FED and ECB reshape financial markets so to never lose, always win, no matter how overvalued, and without short shares, volume, and fundamental support?

    Seventy percent of the US economy is consumer spending. The US consumer is now 50 million on food stamps, 100 million no longer in the labor force and the biggest tax paying base, the aging baby boomers, looking to withdraw from the system.

    The baby boomers children are still paying their student loans and their kids, the grandchildren of baby boomers have over 1 Trillion in student debt-with NO FULL TIME JOBS AVAILABLE.

    What about Fundamentals? Amazon is the number one retailer and should be the measure stick since 70% of the economy is retail.

    Amazon currently trades between 90 and 250 times earnings, current and forward looking. Amazon projected earnings growth rate is MINUS 6% and on paper, considering all factors, the stock has an actual value of $20 per share.

    The next chart is a big picture S&P view-3.5 years of bull market. The chart has a clear 5 wave higher pattern into calculated Fib price resistance zones.

    My point is this: The FED based on money printing alone will have to push stocks higher-to the most expensive in history levels-in order to get another 3.5 year Bull market-5 wave pattern.

    Stocks are too expensive, the general public is broke, the % of shorts are at all time lows, there is no trading volume, and the world financial system is imploding; despite QE1, 2, 3, TWIST 1, TWIST 2, REPO 1 REPO 2, etc, etc.

    I do not believe the math adds up and there is no way to get around LIQUIDATION-despite the best efforts of central planners around the world. The black debt hole is just too large; insolvent banks like Bank of America, RBS, and Citi, will simply have to be liquidated and their debt holders will have to write of the debts.

    The next few charts are comparisons of topping patterns. The top of each chart is current 2012, the bottom half is topping charts for the years 1983, 2007 and 2011.

    These previous tops are road maps to what the 2012 top will look like. The second option is- I am dead wrong and the FED will be able to send the stock market to 100xs earnings, with a financial collapse in the real economy, $10 gas at the pump and no jobs.

    This first 2012 chart is market with the time from the June low. Currently 60 days and September will be 90 days. We are looking for the market to exhaust into a final high into one of these time frames.

    The 1st chart compares the top pattern to 1983 top. Our current location is marked at number 2.

    Second chart compares 2012 with last year, 2011, also marked at the number 2 spot. Both 1983 and 2011 made lower highs. The difference in the two is the speed of the decline after the final distribution top was completed.

    The next comparison is 2012 to the 2007 top. This top pattern is the highest probability because of the similar circumstances. Presidential election cycle, along with collapsing fundamentals that are ignored by the markets.

    Our current location I have marked with the number 3. In this scenario, we will make a marginal new high into the 90 day time period, a fast collapse, a fast recover into the November election time frame, then the first wave lower of a 2 year bear market begins.

    Conclusion:

    Does buy low and sell high matter anymore? Is this time truly different? Can the stock market for the first time in history, never lose, and have infinite upward valuations?

    I got some Tulip Bulbs and a bridge in Brooklyn to sell to anyone who thinks so.

    Tim Kathlina

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: SPY
    Aug 07 5:20 PM | Link | Comment!
  • S&P Current Roadmap Location July 22nd

    On July 7th I indicated the next possible date for SPY top, based on our secondary count, would be July 19th or 45 days from the ending 1st wave low.

    The SPY index exhausted higher into Fib 13th date July 19th, 45 days from Wave one low, followed by a distribution on July 20th.

    Traders should use my updates to look for price and time dates before entering trading positions. These time frames offer the highest probability of winning trades.

    For example, after reading my update on July 7th, you would know to wait for the next Fib sequence date, July 19th, and 45 days from Wave one low, to take a short position with a protective stop above $140, our price target for July 19th.

    The next few charts continue to build a case for a probable top using the same 45 day pattern from the EW1 low.

    We have five clear sub-waves higher:

    The 45 day from the low pattern is also showing three thrust higher:

    The 45 day pattern once again has formed a Bearish Kicking Pattern:

    Conclusion:

    SPY has moved 45 days from the June low, ending on Fib 13th date of July 19th.

    SPY has 5 countable sub waves up from the June low, three exhaustion thrust into highs, and a Bearish Kicking pattern.

    We do not have a squaring of price and time and the index has been able to ignore all bad news to date.

    The FED meets August 1st, they will not do QE3 as I have been saying for months now. I will update direction, price and time after the Fed meeting.

    Tim Kathlina

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: SPY
    Jul 21 11:42 PM | Link | Comment!
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