Timing the bottom is almost impossible. Instead, look for buy signals. When the ROC indicator goes from mega oversold (-20) to mega overbought (+20), along with the KST either showing a positive divergence or weekly MA crossover and a McClellan Oscillator (measure of market breadth) mega oversold (-70) to mega overbought (70) is the signal I would look up for!
Chart 3 is suggesting next support rail is 8% lower. This extends from 1984.
Notice also that every major bottom showed a series of bullish divergent lows. We only have our first here, so a long way to go towards a bottom.
This leads me to believe:
1. We are not at the bottom
2. Monday's gap open will lead the way to next target. Gap down look for retest of...
Quick studies on the $NYSE don't look good.
As chart 1 suggests, we're holding support at 2016 levels, and could backtest the breakdown, which would result in an upwards move of 28%.
Could also gap below Mon open. 2011 levels are next. 28% lower
Things I'm thinking about this morning.
Points of Interest:
Untested POCs, October low, 200 moving average, 50% and 61.8% retracements, gap at the beginning of the sell-off, Monday $VIX pop to $40+.
Untested POCs (see related ideas) beneath February high were erased in a swift correction. In my opinion, the virus-related news is...
This pattern will delight and disappoint bears, as it leads to short term squeezes with long-term payoff. Would be hard to hold a short through this cycle, especially given the need to roll contracts beyond September.
Invalid if price dumps early, which it may.
As with the Dow, Russell, Financials (XLF), the past couple of days have broken below their respective year long trendline support, leaving gaps. Whether markets will retrace off of these oversold conditions or continue their slide is yet to be seen, but the veracity of this downside move should give pause to market bulls. Let the dust settle and see if there are...