The_Unwind
Short

Don't Fight The Fed ?? Bullish Mantra Falls On It's Face

TVC:SPX   S&P 500 Index
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15
The "Follow the Fed" Bullish mantra which has been ingrained into all investors and traders psyche's like clockwork
has this time failed the consensus badly as the S+P 500, has rolled over,broken a bullish descending wedge pattern,
and has now fallen 200 points, ..in less than 4 trading days.

The almost complete reversal of fortune is telegraphed by the speed of the decline.
Complacency has a way of catching up with the market when the consensus is so very one sided.

The move down from the peak at 3429 on Fed meeting day has simply caught
the bulls in massive bull trap that has completely blindsided the majority.

Whether this one sided belief in the Fed's cookie jar was the real fools gold ,
will be quantified in the days and weeks ahead.

However next time you hear a bullish market guru say "Don't Fight The Fed."
perhaps now you will think twice,before accepting that bullish mantra coverall... ever again.

THE_UNWIND
SEPTEMBER 21,2020

Comments

all the best
Reply
The_Unwind PolarHusk
@PolarHusk,

Thank you. You too.
Reply
The bulls were warned in August of what is coming in Sep/Oct...the banks are going down.
If you believe it's 2008 and the Fed will save them...think again.
Deliberate sabotage and planning...every crisis is different.
Liquidity is FLEEING European banks!
Reply
The_Unwind Fractal777
@Fractal777,

Banking scandal brewing in EU, multi decade potential money laundering violations coming out..
You're absolutely correct about the flight to whatever quality is still out there,
Thanks for your comments.
Reply
VIX looks like a dead cat bounce...
Reply
The_Unwind pixelated.puzzle
@pixelated.puzzle,

So far...
Reply
Going by your chart, it looks like a descending wedge which is a bullish sign? Still learning here!
Reply
The_Unwind poister198
@poister198,

Yes.
The technical expectation is that a "descending wedge " triangle pattern to the downside usually has an upside bullish resolution.

Conversely an ascending wedge triangle pattern's technical expectation is for a bearish downside resolution.
In reality then, the technical pattern resolution for a wedgehas the exact opposite conclusion than expected.
I hope the helps
Reply
DaddySawbucks The_Unwind
@The_Unwind, Might be one push down left in it; who knows, but NQ1! is a falling wedge, looks to have found support at 260 on QQQ; expect a retest probably on Thursday; I buy puts on Wednesdays now, LOL; Tues are all Up, Thurs all Down, haha!

This marketwatch contributor writes an insightful blog, he also observes that NQ is compressing and price change is less on each decline: https://www.marketwatch.com/story/charting-a-bearish-technical-tilt-sp-500-dow-industrials-violate-major-support-2020-09-22-121035222?mod=mw_latestnews

GL my friend!
Reply
The_Unwind DaddySawbucks
@DaddySawbucks,

Thanks for Michael Ashbaugh's column. He's very good. I used to read him all the time.
The highlighted damage shown to XLF is almost worth the price of admission.
BTW, great long side, switch and buy yesterday.Impressive to say the least Mr.Sawbucks
Maybe you should be writing a column for Market Watch too :)
Reply
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