The next 2 weeks in the market will likely be a roller coaster ride of volatility and emotion for inexperienced traders/investors alike.
I see red flags everywhere in the markets. Lots of bearish divergences, rounded tops, complacency, bullish sentiment. New high after new high in the traditional markets, with cryptos also on a nice rally.
I've been keeping watch on this DJI chart since July of 2020 and think now is the time to share it. As you can clearly see price action has been in a massive rising wedge. Price fell out of that wedge back on June, 11th of this year. Since then we have made new highs albeit very small and still below the wedge. Currently it seems to be in a smaller time frame ascending wedge.
I want to bring your attention to the convergence of all 3 of these trend lines. The first 2 being both rising wedge lines and the third is the top of the local ascending wedge. Interestingly enough they all meet on Friday, September 10th; the last trading day before the 20th 9/11 anniversary.
I can see a meltup on the DOW this upcoming week to 37,850 or so before a nasty rejection kiss off these three lines. Then a crisis (catalyst) happens this weekend and when trading resumes on Monday, September 13th complete carnage ensues. I'll leave it up to you to figure out what that might be, but the significance of the date along with what is going on in Afghanistan should give some clues.
Fundamentals are liquidity via unemployment stimulus drying up, housing eviction moratorium coming to a halt, labor and supply shortages. Just this week Toyota announced they were slashing global production by a whopping 40%!
I want to close this post by saying that I hope nothing bad happens to our country and the world this month. The last 18 months have been stressful enough. Unfortunately the charts are screaming otherwise.
I'll follow up with a closeup of this chart and also some supporting documentation.
Comment
⋅
Closeup of present day
Comment
⋅
US 10 Year Looking ready to rise
Comment
⋅
VIX has bottomed and looking to break it's falling wedge
Comment
⋅
What is currently happening in the crypto markets is a preview of what is to come.
What just happened in the crypto market is a first mover warning.
Laurent10
⋅
BUYBACKS - That is ALL that is happening, and has been happening for a while now. NO chart will guide you to success. It has ABSOLUTELY NOTHING to do with any chart at the moment. In my opinion if you are trading with charts and you think it's going to go up or down because the chart says so - ain't happening. It's all about buybacks -nothing else.
Expect even more buybacks ahead: as BofA calculates, YTD, corporate client buybacks across sectors are +54% y/y but are still far from
pre-COVID levels: -13% vs. 2019 at this time, and one of the weakest years post crisis so far when normalized by market cap.
Translation: expect many more buyback-driven ramps every time stocks are about to dip below a key support level , as the banks do everything and anything to avoid a gamma wipe-out.
CryptoDude79
⋅
@Laurent10, Thank you for taking the time to stop by and share your thoughts. I am in total agreement with you on buybacks. Also believe they want to provide more stimulus to the masses at the bottom; keeping the game going so the pawns don't get restless. Of course they will need reasoning to do this, and the potential crisis would supply that excuse. I believe the correction will be fast and steep, then off to the races again. Want to emphasize I am not one of those calling for DOW 5K or ridiculous notions.
You might be right where this thing just keeps going up also. In that case an Argentina style market meltup to 40,000 would occur. Like I said before that hopefully we can avoid anymore negative events.
One last thing in response to you on charts don't matter. I do think we can consider warnings in the charts, otherwise we wouldn't be on TV sharing our opinions.
Laurent10
⋅
@CryptoDude79, Hey, you welcome. Been a pleasure going through this with you.....no foul language. or insults :) Lets see what happens for the rest of the week, and we chat then. Cheers