This is a WEEKLY chart. Each candle represents a week of price activity.
Let me be very clear, I am not predicting a double bottom. Today is only Monday. There is a lot of week left in the candle that represents the week.
Let's ponder the what if's...
What if today was Friday. How would I view the chart?
The current candle put in a lower low and a lower high compared to last week's candle. This is negative and keeps me leaning to the downside.
The current candle has many names but I just call it a shooter ( thanks R.S.). This is negative and keeps me leaning to the downside.
The current candle has a higher low compared to the 2018 Dec 24th candle. This is positive, longer term, and would make me want to lean to the upside.
The current candle is showing Double Bottom with the 2018 Dec 24th candle. This is positive and would make me want to lean to the upside.
What if we get the Senate to pass a bill to help "the consumer" not the corporations?
This is easy. If we get a bill that helps the consumer with loss of wages, which will in turn help corporations, this market will go up and probably go up big.
The fact that the chart is showing a double bottom and the fact that the House & Senate are working toward passing a bill that the Pres already said he would support are both very positive.
If the bill passes and the "big guys" are happy with it, this Double Bottom will look like it worked again. But maybe only for a while.
What if we bounce here (Dbl Bot) but then fade again?
If we bounce off this Double Bottom it just means the market goes up some. It doesn't mean it has to keep going up.
It is very possible we get a bounce from the passage of some bill out of the government and then, since the news doesn't get better, the market begins to go down again.
If this happens I would look for a third test of the $238 level. If it doesn't bounce off that level I would expect the market to go even lower.
This scenario is called the "h-pattern". You can look it up online if you don't know what it is. Here is a link to a video : youtu.be/4qjje9_k0fw
Let me talk about the news since I mentioned it in the last paragraph...
Every time a news anchor says, "Breaking News", the news gets worse. Tonight we are getting a rash of government officials telling nonessential businesses to close. We have already had the public stop traveling. We have experienced empty shelves at the grocery store. We are watching the number of people infected rise. We are hearing that those who need respirators may not get them because the country doesn't have enough. We are hearing these "social distancing" or "shelter in place" orders are needed to slow the spread of the virus because otherwise our hospitals will become overrun with infected patients.
The news will get better in time.
But better news may not immediately lead to restarting consumer spending. If there is no (or very little) consumer spending, there are no company revenues let alone profits. It is hard for stocks to go up for any length of time without revenues and profits. Until the news gets better AND businesses are allowed to reopen AND consumers go back to work AND consumers begin to spend again... We are in for a rough ride in my opinion.
Hang in there! Good luck to you! We, as a country, will get through this. Problem is we don't know when or how. And for that reason, we all should be very cautious.
Let me be very clear, I am not predicting a double bottom. Today is only Monday. There is a lot of week left in the candle that represents the week.
Let's ponder the what if's...
What if today was Friday. How would I view the chart?
The current candle put in a lower low and a lower high compared to last week's candle. This is negative and keeps me leaning to the downside.
The current candle has many names but I just call it a shooter ( thanks R.S.). This is negative and keeps me leaning to the downside.
The current candle has a higher low compared to the 2018 Dec 24th candle. This is positive, longer term, and would make me want to lean to the upside.
The current candle is showing Double Bottom with the 2018 Dec 24th candle. This is positive and would make me want to lean to the upside.
What if we get the Senate to pass a bill to help "the consumer" not the corporations?
This is easy. If we get a bill that helps the consumer with loss of wages, which will in turn help corporations, this market will go up and probably go up big.
The fact that the chart is showing a double bottom and the fact that the House & Senate are working toward passing a bill that the Pres already said he would support are both very positive.
If the bill passes and the "big guys" are happy with it, this Double Bottom will look like it worked again. But maybe only for a while.
What if we bounce here (Dbl Bot) but then fade again?
If we bounce off this Double Bottom it just means the market goes up some. It doesn't mean it has to keep going up.
It is very possible we get a bounce from the passage of some bill out of the government and then, since the news doesn't get better, the market begins to go down again.
If this happens I would look for a third test of the $238 level. If it doesn't bounce off that level I would expect the market to go even lower.
This scenario is called the "h-pattern". You can look it up online if you don't know what it is. Here is a link to a video : youtu.be/4qjje9_k0fw
Let me talk about the news since I mentioned it in the last paragraph...
Every time a news anchor says, "Breaking News", the news gets worse. Tonight we are getting a rash of government officials telling nonessential businesses to close. We have already had the public stop traveling. We have experienced empty shelves at the grocery store. We are watching the number of people infected rise. We are hearing that those who need respirators may not get them because the country doesn't have enough. We are hearing these "social distancing" or "shelter in place" orders are needed to slow the spread of the virus because otherwise our hospitals will become overrun with infected patients.
The news will get better in time.
But better news may not immediately lead to restarting consumer spending. If there is no (or very little) consumer spending, there are no company revenues let alone profits. It is hard for stocks to go up for any length of time without revenues and profits. Until the news gets better AND businesses are allowed to reopen AND consumers go back to work AND consumers begin to spend again... We are in for a rough ride in my opinion.
Hang in there! Good luck to you! We, as a country, will get through this. Problem is we don't know when or how. And for that reason, we all should be very cautious.
