Daily bias: lower
With price below the 18-day SMA, the daily bias continues lower. Since 10 September price has not been able to close above "the line in the sand". Today provided a continuation candle lower.
In the comments for the prior post, we provided some hints on how to count this movement so far. Still, some landmarks must be met. In particular, there is now a down (red) fractal shown at 4,300 on the chart. The level must be exceeded lower to really get the swing-line into a further trend of lower highs and lower lows.
Have an excellent start to the evening.
TraderJoe
While the bearish case is gathering some strength ( one example being rejection at underside of breached trend-line), I for one was hoping to see more evidence that so-called "smart money" was aware that we were at the on-set of a potential P degree C wave down. There is still imo very little fear in this market, certainly not cmomensurate with a high degree trend change- today's VIX gap was even smaller than the prior which was slammed shut. If we are in a LD down of course any re-trace will be deep...
ReplyDeleteA lot of people are expecting this as a (4) down and (5) up to follow.
DeleteTachyon - I agree with you that the VIX got slammed pretty hard on the retrace. I was setup for an impulse but we only got an a/b/c from the last ATH. In hindsight, I think VIX was more elevated due uncertainty from Fed meeting, the market hasn't been all that volatile (relatively speaking).
DeleteI also look at the SKEW index, I believe that the market will do the most harm to the most people when it declines, the SKEW has been elevated, implying that people are positioned for a crash. I'll be monitoring that and the VIX as the current diagonal draws out and the retrace occurs.
On your point about expecting a deep retrace on a LD, is that a rule or just an observation? Getting that part right will be key.
Thanks
@TJ I believe deep diagonal retraces just an observation of typical ptice action following their completion.
DeleteBTW, your observation that Mr. Market will act so as to frustrate the crowd poses an interesting tension with the EW postulate that crowd sentiment is the ultimate arbiter kf price! 😊
Deletefair point...the logic feels a bit circular
Deletehttps://schrts.co/QnvDtwCf
ReplyDeleteSPX - 4233 area looks interesting, around the 150 dma. and support.
Aside - UNG (2day) - observations [if interested] -
ReplyDeletehttps://www.mediafire.com/view/k0psioh0ah7kxf3/UNG2.PNG/file
Good morning all. Here is the ES 30-min intraday wave-counting-screen with updated daily pivot points (classic calculation) and local fractals.
ReplyDeletehttps://www.tradingview.com/x/VnnCZYcg/
TJ
NQ 1-Hr (just fyi), the NQ futures have broken this hourly bear-flag lower.
ReplyDeletehttps://www.tradingview.com/x/377o4lZF/
TJ
Aside - XLY (mthly) Long term peak in progress?
ReplyDeletehttps://www.mediafire.com/view/nw6hwol4fjluvec/XLY.PNG/file
SPY cash 10-min: (again just fyi) 140 candles yields a 10-min chart that looks like this.
ReplyDeletehttps://www.tradingview.com/x/s4RMCCUf/
TJ
NQ 1-Hr: (just fyi) futures just exceeded the 09:30 AM low and are at a 78.6% retrace. If the whippy action is a triangle, it should hold around here. If it's just a messy double-combination, then news lows could be imminent. Futures still outside of the lower boundary of the bear-flag.
ReplyDeleteTJ
NQ 1-Hr; (just fyi) downward wave reaches 90%; flat also 'possible'.
DeleteTJ
NQ 1-Hr; chart showing 90% reached. Whippy flat, or next wave lower possible.
Deletehttps://www.tradingview.com/x/WfQ7tRa4/
TJ
NQ 1-Hr (fyi) has gone through the low.
DeleteTJ
DXY (dly) - currently breaking out -
ReplyDeletehttps://www.mediafire.com/view/1cnj18q26t4p5zz/Dxyd.PNG/file
Yep! I have been dismissed by many of my trader friends for calling for a stronger dollar and higher rates. My thesis has always been a simple one, namely, global dollar-denominated debt destruction. EVERGRANDE is the proverbial tip of the iceberg...false TLT breakout a few weeks back prompted a chorus of calls for negative rates! 😊
Deleteweekly BB and 100 ma resistance, I don't think it goes much higher just yet.
DeleteFor dollar I am bullish but not for rates. With stock correction, people will run to safety of treasury bonds.
DeleteNQ daily chart - just to paraphrase Ira; 'this index is down at the lower daily Bollinger Band, and would probably have the initial support of the 100-SMA (shown). So, this is a place where the Smart Money often - not always - takes some off the table.'. He never recommends new shorts under a lower Bollinger Band, especially not when the daily slow stochastic is just in over-sold territory.'
ReplyDeletehttps://www.tradingview.com/x/l3RhFLxR/
So far, there has been an exact tie for the 14,711 late August low.
TJ
BLK has a massive exposure to Chinese junk real estate bonds, including around a 30% portfolio stake in Evergrande...yet its share price currently trades North of 800!
ReplyDeleteThere is a new post started for the next day.
ReplyDeleteTJ