Today was an anomaly that reminded me of times when there is so much shit going on that you just kinda went along for the ride, grab a pack of beer, and say fuck it. When we gapped down so far in early morning trade, I knew that if the down trend is to continue, the market has to fill it now and not later in the weeks to follow because I have a hunch that we are in for a ride similar to the Oct-Dec 2018 correction. Everything fundamental reminds me of that time (inflation talks, slow china growth, rising yields, etc.) and its no surprising that with the market at ATH we are due for a big test. S&P is hanging by a thread here and if it breaks the 50day ema which is extremely close the likely chance to break with two trading days left in the week is highly possible and that next week, we see a bigger break to the downside. There is nothing right now that makes S&P wanna go up. There has to be a huge catalyst for it to bounce out of the 50day ema. With VIX above 20, the market is on high alert. Notice the VIX did not flinch when the DOW, S&P, and Nasdaq retraced back the losses? There is no elon musk controlling the stock market here. Only the FED. The talk of taper or transitory is damning to the market no matter what.
So what do I see? We are gonna down and fill the right side of the head, then we go up a little because of oversold conditions. If the selling is fierce and we drop to 390, there is no head in the h/s pattern. We test 390 sidways and if its breaks it, we look to the 200day MA. I'm looking for a 2 month move in the S&P that will test us.
So what do I see? We are gonna down and fill the right side of the head, then we go up a little because of oversold conditions. If the selling is fierce and we drop to 390, there is no head in the h/s pattern. We test 390 sidways and if its breaks it, we look to the 200day MA. I'm looking for a 2 month move in the S&P that will test us.
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