Remember, on the bright side, a bear market is just a bull market turned upside down. Get ready to stand on your heads.
I have long predicted that the SPX was destined to touch the 200W MA since we broke below the 50W. See my previous charts for verification of this. Now that i have patted myself on my own rump and acknowledged that my soothsaying has proved correct:
On one hand, i would venture to say that a dump of this magnitude and speed, should spring back. . . However, we will have to wait until a few weeks in January to see what the traders really want to do. .
End of Year Low is in full effect. Treat Trends Lightly during this time.
End of Year positions will be closed - as they may be being held open ONLY for tax implications . . which come January 1st will no longer be justifiable.
IN short, i expect we may be have a burst upwards, but break back down . . I hope that the 200W MA remains a solid support line moving in to 2019, but we will have to wait and see on that one.
A break in one direction or the other (yellow Channel Lines) would make room for a daily scalp IMO .
PS. . . Im returning from a 3 day vacation (banning)
I do expect that we have overshot to the upside. There are a lot of variables in play however. . . .
- How much of the lowered 2019 earnings guidance is ALREADY baked into the multiples.
- How much money is being held out of the market due to uncertainties around the trade war
- How much of the money has returned to the market that was being held out due to the FED uncertainties with the rate hikes (FED has gone full 'wait and see' with the rate hike projections.
Read an article the other day on 'Seeking Alpha' regarding dumps of the magnitude that we experienced in December 2018 and the subsequent moves. 80% of the time that we had a dump like we had in December, with a subsequent climb like we are in now, we retraced back down to the December lows. Not that the market repeats itself, but this is certainly a compelling fact to be wary of. . . this could be a 'bull trap' of sorts. Be careful