The selling of US stocks on 08/22/22 was powerful and relentless. The stock bears at the end of the session were probably exhausted. Note on the comparison chart the NYSE cumulative Tick - symbol TICK. On 08/16/22 the SPX ended the session near the low of the day. The TICK reading that day was -816. On 08/26/22 with the SPX lower, and also endeing the session near the low of the day, the TICK reading was only -274, a significant bullish divergence.
The SPX 08/26/22 session - on a one-minute time scale had a low TICK reading of -1126, an even larger bullish divergence!
The SPX low on 08/26/22 was just below a Fibonacci .382 retracement of the 06/17/22 to 08/16/22 rally. Even more amazing there's a nearly perfect parallel trend channel of the 06/17/22 to 08/16/22 rally. The SPX hit the lower trendline.
A multi-day rally could begin on 08/29/22. The time zone for a significant top had been 08/31/22 to 09/01/22. The sharp drop on 08/26/22 makes this time target less likely.
If a multi- day rallly develops the peak may come on 09/06/22. More on this later if a rally develops.
Mark
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Error on original text. The first sentence should be (The selling of US stocks on 08/26/22) not 08/22/22.
Mark, thanks for the excellent post. You make a good case for exhaustion by bears. But sharp one day drops like the one on 8/26 are usually followed by further declines, at least that has been the case throughout 2022. Often you see a rally within 3-4 days of a sharp one day drop, but the rallies eventually give way to deeper declines. I am curious to hear your thoughts about this.
markrivest
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@BlkGold, Yes, note that after the 08/22/22 drop it took two trading days to bottom. Lets see what happens on 08/29/22. If there's a significant move below the 08/26/22 bottom it could mean a larger decline is under development. I will have another post after the 08/29/22 trading session.
TraderV123
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Thanks! Let's see if 4000 holds. IMO this could be a strong psychological level to see a reversal. NFP is a key important news event this week. GLTA!
Nickquick7
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@TraderV123 man your looking worse by the day. Better luck next time. Looks like I was right. Glad I’ve been short.
TraderV123
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@Nickquick7, Hope you closed your shorts today IMO. Remember, this is a marathon, I'm here for the long haul. Day trading gold has helped me offset S&P 500 paper losses. See you at 4000+ soon! 3945 as I write. Good luck to all!
Nickquick7
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@TraderV123 if you think today is a rara moment you are a newb. Good luck
TraderV123
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@Nickquick7, Marathon, remember? Learn how to hedge my young friend. Judging from your most recent reply, sounds like you added shorts early today! Please watch your margin position imo. I wouldn't want you to get wiped out. I'm doing just fine, lots of powder. Don't be too quick on the trigger finger! Please don't worry, you'll learn how to trade soon enough. GLTA!
Nickquick7
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@TraderV123 I’ve been in this game much longer than you. No need for margin. You sound like a newb
TraderV123
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@Nickquick7, Trading imo is no game and should not be treated as such. For me it is a side income project. The word newb wasn't even around when I started trading. I know you are probably a young person, which is great. Make sure you can make next Month's rent. GLTA!
Nickquick7
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So your telling me one day of a sell off exhausts the bears when we are seeing the most hawkish fed in the last number of years with a balance sheet close to 9 trillion that will begin to roll off. Yea ok great work there mark….. good luck