Allow me to list 4:
1. When you look at the1 day/ 1 year chart, you just expect that the next words the market will sing are “...knees and toes” to follow the immense head and shoulders pattern now looming on the market. Yesterday, we had a confirmation of that head and shoulders as the price action fell through the neck line
2. This past week, in the last shoulder, we saw a symmetric triangle with a confirmed bearish breakout.
3. Yesterday, the market fell below $2800 support, and today it is bouncing off the $2800 resistance.
4. Has anyone even looked at the yield curve?!?!
For those who insisted $2750 is the actual support, it is obviously a support level, but we will see if it holds up to another hit from a drop this or next week. If it holds and bounces, then I think we can expect a bull run up past the highs, but let’s be realistic with the full picture...
I don’t find it likely that it will just bounce on this blip of a support level and run up from there. Economic sentiment is weak from the trade war, past trends from 2017 and 2018 indicate that such a large momentum downward would indicate a large pullback in the market, and the clear head and shoulders would have an immensely disappointing short side for its size if this was the bottom. The chance that this is the last bearish blip before another run just doesn’t fit this scary trending channel of progress and huge pullbacks we have seen these past years. The time frame between pullbacks is shorter this time with the last big one ending only 6 months ago. This is a terrifying reality as the market seems so unstable as to potentially produce semi-annual 10-20% corrections, but we may be headed that way. With current sentiment about the credit market, I would not be surprised if we see another 2008 or worse eventually, but for the present, I think we are looking at the very least upon a large correction.
Disclosure: I currently have put and put spread positions on SPY and SPXL
1. When you look at the1 day/ 1 year chart, you just expect that the next words the market will sing are “...knees and toes” to follow the immense head and shoulders pattern now looming on the market. Yesterday, we had a confirmation of that head and shoulders as the price action fell through the neck line
2. This past week, in the last shoulder, we saw a symmetric triangle with a confirmed bearish breakout.
3. Yesterday, the market fell below $2800 support, and today it is bouncing off the $2800 resistance.
4. Has anyone even looked at the yield curve?!?!
For those who insisted $2750 is the actual support, it is obviously a support level, but we will see if it holds up to another hit from a drop this or next week. If it holds and bounces, then I think we can expect a bull run up past the highs, but let’s be realistic with the full picture...
I don’t find it likely that it will just bounce on this blip of a support level and run up from there. Economic sentiment is weak from the trade war, past trends from 2017 and 2018 indicate that such a large momentum downward would indicate a large pullback in the market, and the clear head and shoulders would have an immensely disappointing short side for its size if this was the bottom. The chance that this is the last bearish blip before another run just doesn’t fit this scary trending channel of progress and huge pullbacks we have seen these past years. The time frame between pullbacks is shorter this time with the last big one ending only 6 months ago. This is a terrifying reality as the market seems so unstable as to potentially produce semi-annual 10-20% corrections, but we may be headed that way. With current sentiment about the credit market, I would not be surprised if we see another 2008 or worse eventually, but for the present, I think we are looking at the very least upon a large correction.
Disclosure: I currently have put and put spread positions on SPY and SPXL
Trade closed: target reached:
Closed puts at news of Fed Rate cuts last week and profited about 30%.
