Christmas Cancelled: Decline Into Sring ;_;
TL;DR:
Good news: There is no good news.
Bad news: November is going to be a crash (No not 1929).
Summary:
Well lemme start of by saying my last idea was a bit off: We did not elect the bearish reversals over Halloween (too spooked obv) and so we managed to get a short squeeze out of the CPI data. Mazel Tov.
Regardless this bounce has sucked. Seriously we we've just been at the 52 week low for WEEKS and not even at the 2021 LOW. Playing this one to the upside was really never in the cards. So if you missed the Thursday rally: Good. You're obviously smart.
The second difference (not so much mistake as maybe premature hypothesis) was that we were going to have a high in November. I was really hoping we could have a low on the 7th or 15th then a nice rally after but unfortunately those became highs and now we're going into the strongest direction change of the entire year: The much talked about week of November 21st.
In short we aren't having a Christmas rally. And if the fed pivots it's all over. Good look back historically: It never is. Not to mention that the best month for the DOW happened through tightening. That should put the "interest rate/stock market" theory to rest. And think about it: "What sort of conditions would make the Fed pivot?". Yeah... I can think of one.
If you haven't noticed that often the targets end up being the day of the move in a direction and not necessarily the "actual high". Since August I've been "leading" the targets by one session or so. Right now I have a starter position risking 0.5% on SQQQ (the last position being so rudely stopped out). Stop loss is current high of day.
Just as an aside: AI gives the timing of reversals but not necessarily the actual levels that they'll happen on. I assumed that we'd penetrate the reversals but since we closed above them I could've guessed we'd have a bounce. That bounce is over.
Daily Targets:
- Today and Tomorrow. Could be the high for the month.
- Cool doji today.
- If we go a bit higher on this timeframe don't even pay it any mind: We're crashing. Period.
- We're going to probably chop down every day for the next while.
- We have a whole mess of reversals above us that provide resistance and I don't think there's a hope in hell we close above them. Never say never I guess.
- Meme stocks are rallying again. Basically a flawless indicator of the top aka: "Last Buyers".
- Volatility targets starting tomorrow. Between HYG, the VIX, and the DOW all giving topping/bottoming patterns... yeah. Macllelan oscillator is diverging wildly. And the RSI is now giving a massive hidden bearish divergence since the September high.
- This had better not be because of Trump lol.
- To top it all off AI is giving a Panic cycle on November 22nd.
Weekly:
- This week and next are the highs for November. December 5th and 19th look like bounces maybe. January 2nd and 16th also.
Monthly and Beyond:
- Springtime looks like a bottom.
Correlation with other indices:
- Long story short: Tech to the downside, DOW to the upside.
- The DOW is being driven by foreign capital as stated ad nauseum and so if you want to play anything to the upside basically your choices are UDOW aaaand... that's it. That's the ticker lol. And other defensives if you're big brain.
- I'm not sure energy will necessarily follow if we have a legit recession.
- The SPY is a balance because it has some energy and what-not. So maybe it'll be a good play (some intraday/short term boys and girls like it cause its price action is easier but I digress). Tech is going to eat shit for the foreseeable future so there's no reason to expect it to rally later on: The play is the DOW right now.
- I know that the DOW has been rallying hardest but it also has bottomed first. So tech still might have more downside (until Q2 2023) while the DOW might recover a bit sooner (probably by January).
IMPORTANT: SECTOR ROTATION:
This next part really might be it's own idea but I want to cover it anyways. If you were playing long this year then you'd know that energy was the only game in town really; XLE has been good to all who participated. I played tech down but not everybody does that. I wanna explain a concept that some of the less theoretical types might not get but:
Institutions rotate between sectors.
If you go back to 2020 you'd see everything crashed at the same time. Fair enough. But look at the difference between QQQ and XLE: When did tech rally? April. When did energy rally? November. What that means is that the big guys are shifting their cash into technology. NOT energy. If you were playing to the upside that would have been your cue that tech was what the whales are doing.
This is really all trading amounts to in theory: Following Bigfoot best you can. And that's really all Socrates does: Monitor capital flows.
Now go look at the DOW vs the NASDAQ in September/October. Notice that the DOW held its September low more or less while the NASDAQ/SPY made a new low. Okay that's sector divergence. When that happens that means the institutions are moving capital out of risk and moving to the blue chip style stocks. With all the wars and instability going on that's just common sense.
More importantly: Look at November - January 2021. Everything went down December, but tech kept going on a weekly level and energy formed a hammer and reversed up. If you were an absolute psycho you could have bough a triple leveraged Energy ETF (XLE3) and just made 350% this year in your sleep lol. That was really my confirmation that tech was about to get throttled. And there's that old wallstreet saying: Going long pays salary, going short pays commission.
May the Force be with us all.
(And don't even think about going long. I'm serious lol.)
Good news: There is no good news.
Bad news: November is going to be a crash (No not 1929).
Summary:
Well lemme start of by saying my last idea was a bit off: We did not elect the bearish reversals over Halloween (too spooked obv) and so we managed to get a short squeeze out of the CPI data. Mazel Tov.
Regardless this bounce has sucked. Seriously we we've just been at the 52 week low for WEEKS and not even at the 2021 LOW. Playing this one to the upside was really never in the cards. So if you missed the Thursday rally: Good. You're obviously smart.
The second difference (not so much mistake as maybe premature hypothesis) was that we were going to have a high in November. I was really hoping we could have a low on the 7th or 15th then a nice rally after but unfortunately those became highs and now we're going into the strongest direction change of the entire year: The much talked about week of November 21st.
In short we aren't having a Christmas rally. And if the fed pivots it's all over. Good look back historically: It never is. Not to mention that the best month for the DOW happened through tightening. That should put the "interest rate/stock market" theory to rest. And think about it: "What sort of conditions would make the Fed pivot?". Yeah... I can think of one.
If you haven't noticed that often the targets end up being the day of the move in a direction and not necessarily the "actual high". Since August I've been "leading" the targets by one session or so. Right now I have a starter position risking 0.5% on SQQQ (the last position being so rudely stopped out). Stop loss is current high of day.
Just as an aside: AI gives the timing of reversals but not necessarily the actual levels that they'll happen on. I assumed that we'd penetrate the reversals but since we closed above them I could've guessed we'd have a bounce. That bounce is over.
Daily Targets:
- Today and Tomorrow. Could be the high for the month.
- Cool doji today.
- If we go a bit higher on this timeframe don't even pay it any mind: We're crashing. Period.
- We're going to probably chop down every day for the next while.
- We have a whole mess of reversals above us that provide resistance and I don't think there's a hope in hell we close above them. Never say never I guess.
- Meme stocks are rallying again. Basically a flawless indicator of the top aka: "Last Buyers".
- Volatility targets starting tomorrow. Between HYG, the VIX, and the DOW all giving topping/bottoming patterns... yeah. Macllelan oscillator is diverging wildly. And the RSI is now giving a massive hidden bearish divergence since the September high.
- This had better not be because of Trump lol.
- To top it all off AI is giving a Panic cycle on November 22nd.
Weekly:
- This week and next are the highs for November. December 5th and 19th look like bounces maybe. January 2nd and 16th also.
Monthly and Beyond:
- Springtime looks like a bottom.
Correlation with other indices:
- Long story short: Tech to the downside, DOW to the upside.
- The DOW is being driven by foreign capital as stated ad nauseum and so if you want to play anything to the upside basically your choices are UDOW aaaand... that's it. That's the ticker lol. And other defensives if you're big brain.
- I'm not sure energy will necessarily follow if we have a legit recession.
- The SPY is a balance because it has some energy and what-not. So maybe it'll be a good play (some intraday/short term boys and girls like it cause its price action is easier but I digress). Tech is going to eat shit for the foreseeable future so there's no reason to expect it to rally later on: The play is the DOW right now.
- I know that the DOW has been rallying hardest but it also has bottomed first. So tech still might have more downside (until Q2 2023) while the DOW might recover a bit sooner (probably by January).
IMPORTANT: SECTOR ROTATION:
This next part really might be it's own idea but I want to cover it anyways. If you were playing long this year then you'd know that energy was the only game in town really; XLE has been good to all who participated. I played tech down but not everybody does that. I wanna explain a concept that some of the less theoretical types might not get but:
Institutions rotate between sectors.
If you go back to 2020 you'd see everything crashed at the same time. Fair enough. But look at the difference between QQQ and XLE: When did tech rally? April. When did energy rally? November. What that means is that the big guys are shifting their cash into technology. NOT energy. If you were playing to the upside that would have been your cue that tech was what the whales are doing.
This is really all trading amounts to in theory: Following Bigfoot best you can. And that's really all Socrates does: Monitor capital flows.
Now go look at the DOW vs the NASDAQ in September/October. Notice that the DOW held its September low more or less while the NASDAQ/SPY made a new low. Okay that's sector divergence. When that happens that means the institutions are moving capital out of risk and moving to the blue chip style stocks. With all the wars and instability going on that's just common sense.
More importantly: Look at November - January 2021. Everything went down December, but tech kept going on a weekly level and energy formed a hammer and reversed up. If you were an absolute psycho you could have bough a triple leveraged Energy ETF (XLE3) and just made 350% this year in your sleep lol. That was really my confirmation that tech was about to get throttled. And there's that old wallstreet saying: Going long pays salary, going short pays commission.
May the Force be with us all.
(And don't even think about going long. I'm serious lol.)
Comment:
For anyone playing along at home we just triggered today's Crash Mode support which we bounced off of. Let's see how we close.
Comment:
You know, Looking at the DOW and QQQ again, it seems like the rally so far was only a 3% difference or so; 18.58 and 15.34 respectively. The NASDAQ just fell from a much further height...
Comment:
We opened under Crash Mode so that will become resistance now. I added low of previous session but the rest will just be for pullbacks.
Comment:
Update for tonight:
Daily: Pendulum Swing to Downside
Weekly: Temp High
Monthly: Knee Jerk High
Quarterly: Temp Low Short-Cover Reaction
Also the next week could have a spike to a new high so be prepared with a stop loss if necessary. I'm currently short though.
Daily: Pendulum Swing to Downside
Weekly: Temp High
Monthly: Knee Jerk High
Quarterly: Temp Low Short-Cover Reaction
Also the next week could have a spike to a new high so be prepared with a stop loss if necessary. I'm currently short though.
Comment:
So we're having quite the gap down and then a real reversal up now. Nut look at the volume: Not many buyers. I'll add again soon or if I stop out add next week.
Comment:
Lol. Closed at 0.00% today. They probably think they're hilarious.
Comment:
23rd and 25th look like potential highs but volatility is spiking like crazy this week so we might not even get that chance. Futures currently red.
Comment:
AI daily comment: "Forming False High"
Expect maybe some chop for a week.
Expect maybe some chop for a week.
Comment:
*For reference the last time we saw that signal was from Tesla on Sept 10.
Comment:
Took profits and reentered average 44.03 SQQQ.
Comment:
Still have heavy position. Currently considering buying SDOW or FAZ. Seeing some really bad stuff rn.
Comment:
Whew. What a rally today. Unfortunately it was on very low energy. This implies there arent many buyers actually left to jump in. However we are right at the weekly bullish reversals (finally) at 292.60 and 294.60. If we break out of these next real resistance is 307 and 308. We have elected a total of SEVEN bullish reversals today also. These usually only matter for one time unit though (so if you elect one they only really have momentum for the next trading session).
As far as the rally goes? Looks like we're going to actually have a pretty dramatic chop distribution until Dec 12th, which also has a major volatility target beginning, which appears to continue until the end of the year. If we hold at least 292.60? That might be bullish. However we've already elected a quarterly bearish reversal. We are going lower. Personally I'm sitting this one out. By the time the fed pivots all hell could break loose.
Anyways good luck!
Also, the PMI just went below 40...
As far as the rally goes? Looks like we're going to actually have a pretty dramatic chop distribution until Dec 12th, which also has a major volatility target beginning, which appears to continue until the end of the year. If we hold at least 292.60? That might be bullish. However we've already elected a quarterly bearish reversal. We are going lower. Personally I'm sitting this one out. By the time the fed pivots all hell could break loose.
Anyways good luck!
Also, the PMI just went below 40...
Comment:
Got in on the high last Thursday. Going to add as we go down.
Monthly GMW comment: Temp High Possible CRASH
Panic cycle Dec 8th.
Target Dec 12th. Good add day maybe.
Possible low Dec 19th - 26.
Rally into January 19th, crash into spring.
I decided to short multiple tickers with favorable RR. Also DOW peaked perfectly on Nov 28th weekly so awesome.
I'll do a full report later. Good luck out there.
Monthly GMW comment: Temp High Possible CRASH
Panic cycle Dec 8th.
Target Dec 12th. Good add day maybe.
Possible low Dec 19th - 26.
Rally into January 19th, crash into spring.
I decided to short multiple tickers with favorable RR. Also DOW peaked perfectly on Nov 28th weekly so awesome.
I'll do a full report later. Good luck out there.
Comment:
Oof stopped out. Looks like CPI beat.
Comment:
Reopened shorts off the 30 minute candle. Very green on the day.