As the market continued its relentless push to the upside today, I noticed that channels I drew were not being retested with consolidation and that instead, price action only accelerated to the upside. This is a phenomenon called "accelerating fan lines" and they are a sign of a "blowoff top." When I saw that on the short duration scale, I laughed, because that's just what the market did leading up to the June highs.
And then I stopped laughing because of course that's what the market also did on an even grander scale over the last years, culminating in the February highs. On Twitter, I joked that it was a blowoff top within a blowoff top within a blowoff top.
Minutes after I made that joke and published some images of it, news regarding possible US sanctions against China came out and the market trend and tone shifted. In case this is the end of the road for the bulls, or in case this is the beginning of some very serious selling, which I think is possible, I want to document what I see for posterity.
Here are the smallest, most local fan lines, over just the last few days (yellow):
And the bear market rally as a whole, the last few weeks (red):
And the bull market itself, the last months (orange):
Now, if the accelerating fan lines have fractaled themselves out to the upside, then we may now be destined for decelerating fan lines to the down side. And, in fact, we can see those already having begun. They are down trend lines; they are what tell you that we are in a bear market overall, and that the last two accelerating fan lines have been counter rallies only.
Long-term (orange):
Last few weeks (red):
And quite possibly today (yellow):
Let us see if this magnificent structure unfolds as fractals, just as it looks to folded as fractals. Though perhaps we have a little more room to the upside, but I believe a great turn in the markets is upon us.
And then I stopped laughing because of course that's what the market also did on an even grander scale over the last years, culminating in the February highs. On Twitter, I joked that it was a blowoff top within a blowoff top within a blowoff top.
Minutes after I made that joke and published some images of it, news regarding possible US sanctions against China came out and the market trend and tone shifted. In case this is the end of the road for the bulls, or in case this is the beginning of some very serious selling, which I think is possible, I want to document what I see for posterity.
Here are the smallest, most local fan lines, over just the last few days (yellow):
And the bear market rally as a whole, the last few weeks (red):
And the bull market itself, the last months (orange):
Now, if the accelerating fan lines have fractaled themselves out to the upside, then we may now be destined for decelerating fan lines to the down side. And, in fact, we can see those already having begun. They are down trend lines; they are what tell you that we are in a bear market overall, and that the last two accelerating fan lines have been counter rallies only.
Long-term (orange):
Last few weeks (red):
And quite possibly today (yellow):
Let us see if this magnificent structure unfolds as fractals, just as it looks to folded as fractals. Though perhaps we have a little more room to the upside, but I believe a great turn in the markets is upon us.