See The Fine Ukulele

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Several months ago, I wrote what turned out to be one of the most important posts of the year: Whiskey Tango Foxtrot, which laid out four possible directions (out of infinite possibilities) for the stock market. Happily, my most bearish prediction, “Delta”, turned out to be the case (although things went much, much lower than I dared imagine).

I’d like to go out on a limb again with a similar post, presenting four possible paths. Instead of Alpha, Bravo, Charlie, Delta, I hereby offer to you beloved readers the four possible paths of Sierra, Tango, Foxtrot, and Uniform.

The first, Sierra, is the most bullish. It calls for a piercing of the line at 2685 (on the S&P 500 cash index), soaring toward the December 3rd “trade truce” peak. It then takes a dive, finding support at the psychologically-important 2600 line before bouncing strongly, challenging lifetime highs. This would, of course, be the death knell for the bears.

Sierra

Next up is Tango, a somewhat modified version of Sierra. In this case, we also zip through the resistance line, matching the “Trade Truce” highs, and we likewise fall to 2600. We then start to rally – – and here’s where the difference is – – that rally stalls, and we start falling, cutting through support at 2600.

Tango

Continuing to move toward more bearish scenarios, we see here now Foxtrot, which calls for an immediate bout of weakness when this week begins. We plunge toward Fibonacci Retracement at about 2450, find an opportunity to rally back to 2600, and then plunge from there, cutting below last year’s lows.

Foxtrot

Finally – – and least plausibly – – we have Uniform, which calls for basically a “wave 3” style tumble, in which we go into a December 2018 style fall with virtually no relief for our bullish friends. Again, as much as I’d love to see this, I view it as the most unlikely.

Uniform

The biggest uncertainty, I think, is what’s going to happen with China. It seems pretty clear that Jerome Powell has absolutely no backbone at all, and is as sycophantic to the President as his predecessors. So I fully expect him to throw in the towel on any kind of “normalization”. We’re pretty deep into the earnings season, and it doesn’t seem like there’s any particularly strong bullish or bearish theme to those. So………it’s really all up to China at this point to dictate whether the bulls get to laugh all the way to the bank (just like the past ten years) or whether the bears finally get the upper paw.

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