Wednesday, March 28, 2018

Lower Low Day

Market Outlook: Now Getting Higher Volatility
Market Indexes: Major U.S. Equity Indexes closed lower
SPX Candle: Lower High, Lower Low, Lower Close - Trend Candle
FED Posture: Quantitative Tightening (QT)

Although the cash market made a lower low day, there is still nothing to rule out the potential triangle count. Below is a chart of the daily ES E-Mini S&P500 Index futures.

ES E-Mini S&P500 Index Futures - Daily

Although was a lower low day in cash, it is not lower than than the current (c) wave low - let alone the (a) wave low. This may eventually help to solidify the lower trend line of a potential triangle, but risk of invalidation (a.k.a. the Bottom Torture we wrote about on the weekend) remains somewhat elevated until a higher recent swing high over two days ago has been made.

Watch it closely and have a very good start to your evening.


  1. The reversal in AMZN yesterday should be watched closely. I don't see how the market moves higher unless FANG stocks start to rally immediately.

  2. Hi Joe,
    Hope you are well. I'm a bit surprised you haven't made comment about the wild action the past 2 days. I would describe it as nothing short of " Mr. Toads Wild Ride" with repeated 100 to 200 point swings in the Dow within a few hours. I was wondering if what's been going on has implications beyond just volatility. I seem to remember hearing somewhere that this kind of action sometimes occurs at inflection points. I was just wondering what your thoughts were.

    1. Hi P-T. I have said numerous times the whippy action is consistent with a potential triangle. There is not much more to say than that unless there is a price breakdown.