Most devastating bearish setup in history?
As insane as it might seem, I present here what i think is the *most probable* scenario unfolding in the market. If actualized, it will become the most devastating market crash in all of history. Here are some reasons why I think this is the most likely scenario now:
1) Most bearish movement indicators has been smashed, including velocity and magnitude of the decline
2) HOWEVER... the critical TRIN and PCC (quite abnormally) are still far from triggering bottoming levels
3) European indices have dropped through 2016 lows with the FTSE at 2012 lows already
4) The market leaders AAPL and MSFT are just beginning their decline and should catch up with the rest of the market shortly
5) The VIX structure, already at historic highs, looks still to be building base after base.
6) The FED has used up all their ammo with no clear victory
7) We are in a Gann year of PANIC
8) Coronavirus impacts are just beginning to be visible
9) Oil prices are getting crushed day after day
10) Movement of bonds and metals indicate we are entering a deflationary environment
Good luck with your trading!
1) Most bearish movement indicators has been smashed, including velocity and magnitude of the decline
2) HOWEVER... the critical TRIN and PCC (quite abnormally) are still far from triggering bottoming levels
3) European indices have dropped through 2016 lows with the FTSE at 2012 lows already
4) The market leaders AAPL and MSFT are just beginning their decline and should catch up with the rest of the market shortly
5) The VIX structure, already at historic highs, looks still to be building base after base.
6) The FED has used up all their ammo with no clear victory
7) We are in a Gann year of PANIC
8) Coronavirus impacts are just beginning to be visible
9) Oil prices are getting crushed day after day
10) Movement of bonds and metals indicate we are entering a deflationary environment
Good luck with your trading!
Comment:
11) Corporate bonds appear to be crashing as well
Comment:
Today, we had some strong downside action, yet it seems to me that the majority still do not believe that the worst bear market in history has only started.
TRIN ended the day at a dismal 0.65 and PCC at 1.335.
I shall maintain my view that this crash will not finish until the following conditions are met:
TRIN spikes through 5.0 and closes above 2.0
PCC closes above 1.75.
So until then, look out below...
TRIN ended the day at a dismal 0.65 and PCC at 1.335.
I shall maintain my view that this crash will not finish until the following conditions are met:
TRIN spikes through 5.0 and closes above 2.0
PCC closes above 1.75.
So until then, look out below...
Comment:
Sentiment has turned even more bullish today, which is usually a bearish sign. I see the possibility that the gap at 2475 will get filled before the next move down, but it does not have to.
Comment:
Rally target likely completed. Next target 2150.
Comment:
Closing TRIN 1.2 and PCC 1.12. As I expected, bulls were vacuumed in throughout the day and perhaps the decline started in the last 15 mins. Market may vacuum more bulls in overnight with a small gap up, but the next decline should be monumental.
Comment:
Market swept up all the bottom callers and may be heading straight down in one fell swoop now. Next target is still 2150. We shall see what happens next when we get there.
Comment:
Market turned hard exactly when most were calling for a bottom. Now capitulation can happen at any time with two days of gap down and straight red candles. The point of no return.
TRIN 1.4, PCC 1.23: Means the selloff is starting to intensify but still not enough selling for a bottom.
TRIN 1.4, PCC 1.23: Means the selloff is starting to intensify but still not enough selling for a bottom.
Trade active:
Today's close: TRIN 0.59, PCC 1.11
The market continued stepping down despite relentless buying as indicated by the TRIN and PCC above. Verdict: No bottom yet in sight.
The market continued stepping down despite relentless buying as indicated by the TRIN and PCC above. Verdict: No bottom yet in sight.
Comment:
IMHO, something *very* dangerous is playing out here. If we check out the indicators on this page money.cnn.com/data/fear-and-greed/, every chart points to the absolute of extreme fear EXCEPT for volatility and put-call-ratio, which have both pulled back significantly for some reason. It suggests to me that those indicators are recoiling for further and accelerated downturn.
Trade active:
Today's close : TRIN 1.02, PCC 0.87
The monster rally likely scared off most bears and added more fuel to the frenzied call buying. (There were not that many bears onboard to begin with according to the TRIN and PCC indictors.) This is what the market likes before a huge capitulation move. I still believe this will ensue within a 1-3 days at most.
The monster rally likely scared off most bears and added more fuel to the frenzied call buying. (There were not that many bears onboard to begin with according to the TRIN and PCC indictors.) This is what the market likes before a huge capitulation move. I still believe this will ensue within a 1-3 days at most.
Comment:
With respect to the waves forming, I see the possibility that we rise back to the SPX 2580 level before the next surprise move down, but this does not need to happen. It could very well resume the downtrend tomorrow. This unpredictable short term nature of markets is why we must use wise money management trading techniques to profit during these volatile events.
Trade active:
Today's close: TRIN: 0.9, PCC 0.9
Nearly hit my rally target of 2580 before starting to turn down. Certainly a scary move for most bears, but should be nothing compared to the capitulation move that is very likely coming. Could rally some more tomorrow morning, but that will likely be it imho. Good luck all!
Nearly hit my rally target of 2580 before starting to turn down. Certainly a scary move for most bears, but should be nothing compared to the capitulation move that is very likely coming. Could rally some more tomorrow morning, but that will likely be it imho. Good luck all!
Comment:
We are approaching the limits of this most devastating count now. 0.786 retracement from the Mar 13 top is 2607 and the rally should theoretically stop there. Above 2711 and something else would certainly be in play.
Trade active:
Today's close: TRIN 1.72, PCC 0.98
Third day of rally has reduced the probability of the depicted crash. However technicals are still quite abnormal. TRIN indicates that selling pressure increased significantly today, even though the market rallied non-stop. PCC indicates that bearish sentiment is still lackluster. VIX has barely budged for this entire rally. Therefore, downside danger is still significant, although it may not drop as low as 185 anymore.
Third day of rally has reduced the probability of the depicted crash. However technicals are still quite abnormal. TRIN indicates that selling pressure increased significantly today, even though the market rallied non-stop. PCC indicates that bearish sentiment is still lackluster. VIX has barely budged for this entire rally. Therefore, downside danger is still significant, although it may not drop as low as 185 anymore.
Trade active:
Today's close: TRIN 1.1, PCC 1.1
With the strong gap down last night, this scenario remains valid. There has still not been single day with lots of selling/bearish volume since the crash began. Volatility began ramping up during the last 15 mins today, despite everything the governments and central banks have thrown at the meltdown. My guess is the next (and likely most powerful bearish wave) has commenced. Fractal counting suggests it will bottom on Apr 6th.
With the strong gap down last night, this scenario remains valid. There has still not been single day with lots of selling/bearish volume since the crash began. Volatility began ramping up during the last 15 mins today, despite everything the governments and central banks have thrown at the meltdown. My guess is the next (and likely most powerful bearish wave) has commenced. Fractal counting suggests it will bottom on Apr 6th.
Trade active:
TRIN 1.3, PCC 1.1
May see a couple days of chop due to options expiration, but overall outlook has not changed. Bottoming may not be until mid Apr now as the corrective wave appears to be extending out in time.
May see a couple days of chop due to options expiration, but overall outlook has not changed. Bottoming may not be until mid Apr now as the corrective wave appears to be extending out in time.
Trade active:
TRIN 1.1, PCC 1.2
Overall, there is still little belief that there could be more downside action, although the average closing TRIN and PCC over the past week tells me that a wave of bears are finally starting to clue in to this opportunity now. Bulls have not changed course at all, buying each and every single dip. This tells me that I am still likely right that the strongest downside action is yet to come.
Potential bottoming target: 165-215
Potential bottoming date: Mid April
Leaving the range wide open for now. The action of the next several should give us a clearer picture of what might come.
Best of luck to those following me.
Overall, there is still little belief that there could be more downside action, although the average closing TRIN and PCC over the past week tells me that a wave of bears are finally starting to clue in to this opportunity now. Bulls have not changed course at all, buying each and every single dip. This tells me that I am still likely right that the strongest downside action is yet to come.
Potential bottoming target: 165-215
Potential bottoming date: Mid April
Leaving the range wide open for now. The action of the next several should give us a clearer picture of what might come.
Best of luck to those following me.
Trade active:
TRIN 0.6, PCC 1.1
Who would believe that with yet another 5% drop in the market, THERE IS STILL NO SELLING VOLUME?!?!?! Instead, the TRIN shows that bulls were buying this dip with ever more fervor and the PCC shows that bull/bear speculation is still balanced.
Verdict: No change to outlook. No bottom yet.
Potential bottoming target: 165-215
Potential bottoming date: Mid April
Further observations: Possible analog to 1929 approaching? Black Thursday -11%. Rebound Friday FLAT. Black Monday -13%. Black Tuesday -10%.
Be prepared.
Who would believe that with yet another 5% drop in the market, THERE IS STILL NO SELLING VOLUME?!?!?! Instead, the TRIN shows that bulls were buying this dip with ever more fervor and the PCC shows that bull/bear speculation is still balanced.
Verdict: No change to outlook. No bottom yet.
Potential bottoming target: 165-215
Potential bottoming date: Mid April
Further observations: Possible analog to 1929 approaching? Black Thursday -11%. Rebound Friday FLAT. Black Monday -13%. Black Tuesday -10%.
Be prepared.
Trade active:
TRIN 0.8, PCC 1.2
Although the TRIN and PCC indicate that overall sentiment is still in buy-the-dip mode with little concern for a continued crash, we need to consider that there could be further rally short term as the SPY p/c ratio suddenly jumped today. I trimmed some profits and rolled near term positions out in case we get another face ripper rally to further reduce the oversold conditions. 1929 analog will be pushed out to next Thursday at the earliest now.
Potential bottoming target: 165-215
Potential bottoming date: Mid-late April
Although the TRIN and PCC indicate that overall sentiment is still in buy-the-dip mode with little concern for a continued crash, we need to consider that there could be further rally short term as the SPY p/c ratio suddenly jumped today. I trimmed some profits and rolled near term positions out in case we get another face ripper rally to further reduce the oversold conditions. 1929 analog will be pushed out to next Thursday at the earliest now.
Potential bottoming target: 165-215
Potential bottoming date: Mid-late April
Comment:
Taking another look at the overall structure, seems 258 may need to be retested before further downside action. If it breeches much above that level, then this scenario could be invalidated. Market taking the situation to the extreme as usual.
Trade active:
TRIN 0.34, PCC 1.1
Never have I seen such a bearish day with the TRIN so low, suggesting enormous buying volume was deployed to keep the market from completing diving! Contrary to what most are thinking, I think it it the buying that is almost exhausted, rather than the selling. Outlook unchanged, except it may continue dragging out longer than expected.
Potential bottoming target: 165-215
Potential bottoming date: Mid-late April
Never have I seen such a bearish day with the TRIN so low, suggesting enormous buying volume was deployed to keep the market from completing diving! Contrary to what most are thinking, I think it it the buying that is almost exhausted, rather than the selling. Outlook unchanged, except it may continue dragging out longer than expected.
Potential bottoming target: 165-215
Potential bottoming date: Mid-late April
Trade active:
TRIN 1.43, PCC 0.97
The rip-bears-face off rally that I saw the potential for last week due to the SPY p/c ratio become too bearish came a couple days late, but here it was. Not fun. It could still continue into tomorrow. Sentiment signals are no longer clear so we'll have to reassess from scratch tomorrow. Overall, still doesn't seem like anything socio-economic has changed much, so today may still have been a squeeze to lock knock out all the bears before capitulation.
The rip-bears-face off rally that I saw the potential for last week due to the SPY p/c ratio become too bearish came a couple days late, but here it was. Not fun. It could still continue into tomorrow. Sentiment signals are no longer clear so we'll have to reassess from scratch tomorrow. Overall, still doesn't seem like anything socio-economic has changed much, so today may still have been a squeeze to lock knock out all the bears before capitulation.
Comment:
Just want to pass on a warning here to my followers that I think it's time to stop trading oil indefinitely (until society stabilizes). I expect this commodity will continue capitulating into negative territory as oil reserves reach capacity. However, there are rumours the most traded oil ETF USO is about to go extinct to protect the interests of the managing firm. This type of action has unpredictable consequences, so both bulls and bears alike could be shafted. ref.: oilprice.com/Latest-...ous-Oil-Futures.html