Chuck Wood

How much wood would a woodchuck chuck if a woodchuck could chuck wood? Chair Powell did an awful lot of wood-chucking today - dispelling everyone's concerns about every conceivable thing. There was an awful lot of jaw-flapping for not changing interest rates at all. Inflation? Not a problem. Employment? Not a problem. Artificial-Intelligence? Not a problem. Energy prices? Not a problem. Gold & Silver and Asset prices? Not a problem, as GOLD reportedly goes up over $100 per day now.

Yea, well, he doesn't mention too pointedly how the enormous $34 Trillion in debt he helped create has destroyed some/much of our purchasing power. He doesn't mention that the $40 Billion each month he now just gives to the banksters is largely responsible for the great wealth inequality, while they laugh "tee-hee" in the Press Conference about how the wealthy are 'mostly' responsible for creating the economic growth. Yes folks, don't ask the hard questions. Don't be investigative reporters. Go along for the ride. Don't make it seem like there are real people out there who are really, seriously hurting. As for the next FED chair, I'd vote for Chuck Wood, PHD (Pile it Higher & Deeper).

For my part, today's chart is of the contracting ending diagonal I called in real time and documented in 2014/2015. I recreated this chart, below, that I recalled so well, so it might be instructive to you. I'll have a couple of notes below the chart.

SP500 Cash Index - Weekly - Contracting Diagonal

First & foremost, look at how long it took for this diagonal to form. It took forty weeks! A full eight months. Consider: would you have had the patience to sit through this thing? Next, note the retraces were not the 62%+ that would be indicated by the guidelines for a diagonal. That is exactly why they are guidelines and not rules. Third, note that interior to the larger diagonal (blue lines) is what looks like a diagonal, (itself shown with brown lines) except it is more properly a running 'b' wave. All these things serve to confuse and confound the wave count - which is why one must remain patient, flexible and calm.

Next note the declining MACD throughout the pattern and finally note that the start of the diagonal was eventually exceeded in less time than the diagonal took to form.

Will this happen again at this possible top, some 12-to-Fibonacci-13 years later? Will FED Chairs continue to say, "no problem" as they hand out cash to the bankers and corporations? Only time will tell.

Have an excellent rest of the evening,

TraderJoe