So, yesterday we saw that lower high 1-Hour Uptrend I was looking for at 3975. Of course, that was just before the Market shot up on the news of a 75-bps hike and significantly increased hawkish rhetoric from J Powell. I had said nothing destroys trends like headline news, and clearly I should have listened to my own advice, hah. However, I have licked my wounds and prepare for another day of trading.
So now we are stuck in another position I had mentioned before. The one I said can be very frustrating to trade inside. We have Higher Lows, or will when they trigger, from the 3-Hour and below. Which is bullish of course.
However, on the flip end, after where we signaled last, we also have lower highs on the 1-Hour and 30m. So that was to be the beginning of a bearish reversal, and historically, it is.
So when looking how to trade this, I look to some of the other trends who haven't had much play or impact in this movement up past 3900. The 12-Hour, the 6-Hour, and the 4-Hour.
All of this movement has been above those trendlines. However, I've at least never seen price action just continue to move up without any of them. The 12-Hour is obviously a major mover, and is the higher of the missing signals at 3926. However, it is a descending uptrend line which I've said if this market is turning around we really need to see a descending trend signal to have our bottom we can try to move off of.
So then we have the 6-Hour and the 4-Hour. The 4-Hour has been left back in the 3800s and even with an ascending line it hits at around 3905. The 6-Hour was also higher highs and ascending and with the slop it is at 3950 with the base signal at 3920.
So in terms of trends, I think we need to swing down and collect the 4-Hour and 6-Hour downtrend signals. With this major push upward, I could see both coming in close to 3950ish. If it pings higher, so be it, but without them, this foundation that we are pushing upwards on is just not "normal", or I suppose unstable would be a good way to put it. This upward push is no different than when we plummeted to a new low and left signals behind before. We then went up and collected them.
So in terms of trends, I think we need to run down and collect these missing signals and head down to 3950. Once there, I'll have to reevaluate and see where we might go next. This upward movement could very well have been the Head of a Head and shoulders formation. So I could see us go down to 3920-3950, back up to around 3990-4010, and then be in for some pain. However, that's just a guess, and I trade off trends, so we will have to see what happens.
So Upside;
The 2-Hour and 3-Hour have fresh higher high trends, although we are under both ascending lines and sitting right at the 2-Hour Uptrend signal. We have to get back above and stay above the 2-Hour and regain some footing on the 3-Hour Uptrend line. If we do, I could see more upside movement to capture that high peak from yesterday.
The Downside;
Lower Highs and Higher Lows is a reversal trend pattern, albeit the less desirable one. The 30m has formed that and unless the 1-Hour can shove it's way back down below 3953 in a single push, it will also form that. Additionally, we are missing some key downtrends that we need to reacquire for any actual push, so the short term has a lot of downside also. Also, for such a big day yesterday, volume was only 1.6 million. That isn't bad, but I have always looked for a 2+ million day as commitment in the Futures ES Market.
The Economic Data;
Not the first time I was left wondering if anyone was watching the same Press Conference I was. Every time I thought the data was extremely dangerous towards stocks, I held off doing anything and watched the market go up. I knew this was still a possibility, but I thought perhaps the market had learned from the last few times it had a FED Day push, just to be slapped the following day with a plummet down. I even went back and looked at the reports of major financial sectors to see if I missed something. Nope. The basis behind the speech was that the Fed is willing to take us into a recession and even raise interest rates higher again if need be to fight inflation. These should have given a more bearish tone yesterday, and yet, there we went 70 points higher and are still sitting 40 points up. Additionally, Powell basically said he isn't giving guidance anymore, so "good luck". Which to me, he did so that he can decide he can raise rates to whatever next time and when people get upset, he can say, "No, I told you I wasn't giving guidance anymore."
Incoming today, is the GDP reading at 08:30. We had a decline of 1.6% last time, and the expectation is we will have a positive of 0.5%. The main reason I believe we may get a negative reading is politics. There have been several press releases out from the White House attempting to redefine that two negative GDP quarters does not make a recession. That is of course, incorrect. While not a full recession reading, two declining quarters puts us in what is called a "Technical Recession". We need unemployment to increase to around 5% until we could consider an actual recession. However, I wonder if the White House doesn't already know it is going to be a negative reading, and is attempting to change the narrative ahead of time.
We also have jobless claims as we do every week today. It was at 251,000, and is expected to increase to 253,000. I would tell you that a decrease in GDP and increase in unemployment should cause people to jump out of stocks, but I've come to the conclusion that with all the new investors, not a lot read the data and interpret it in a more traditional sense.
Then we have Earnings;
While yet again, who knows how people will react after they swallowed up Microsoft and Google on poor performance and potentially empty promises, Facebook posted a VERY poor performance, and its guidance is "we will layoff people and cut costs to try and do better". That SHOULD create a sell off of Facebook, however, again, maybe people are just thinking they can bargain shop and get these stocks now and somehow we shall magically rise back up to our highs of the year by the end of December.
In Earnings for today, we have Apple (AMC), Amazon (AMC), Intel (AMC), Linde (BTO), Mastercard (BTO), Merck (BTO), Pfizer (BTO), Thermo (BTO), Comcast (BTO), and of course a slew of other major cap but smaller companies. I'd expect Amazon to play a major factor in other retail and online sales companies. Mastercard might be looked at in how we are approaching a recession and consumer spending. As for the others, their respective stocks are large, but other companies in their sector have reported so I'm not sure they will have as large an impact on mutual companies in their sectors. Apple though has a huge weight in the S&P, so it could be a big factor alone in price movement.
It is possible that some of those companies already reported while I was typing this up also. I'll go check after I finish my coffee.
Overall sentiment on the day, and remainder of the week actually, is bearish. At least until we hit the 4-Hour Downtrend mark.
In terms of Economic Data;
So now we are stuck in another position I had mentioned before. The one I said can be very frustrating to trade inside. We have Higher Lows, or will when they trigger, from the 3-Hour and below. Which is bullish of course.
However, on the flip end, after where we signaled last, we also have lower highs on the 1-Hour and 30m. So that was to be the beginning of a bearish reversal, and historically, it is.
So when looking how to trade this, I look to some of the other trends who haven't had much play or impact in this movement up past 3900. The 12-Hour, the 6-Hour, and the 4-Hour.
All of this movement has been above those trendlines. However, I've at least never seen price action just continue to move up without any of them. The 12-Hour is obviously a major mover, and is the higher of the missing signals at 3926. However, it is a descending uptrend line which I've said if this market is turning around we really need to see a descending trend signal to have our bottom we can try to move off of.
So then we have the 6-Hour and the 4-Hour. The 4-Hour has been left back in the 3800s and even with an ascending line it hits at around 3905. The 6-Hour was also higher highs and ascending and with the slop it is at 3950 with the base signal at 3920.
So in terms of trends, I think we need to swing down and collect the 4-Hour and 6-Hour downtrend signals. With this major push upward, I could see both coming in close to 3950ish. If it pings higher, so be it, but without them, this foundation that we are pushing upwards on is just not "normal", or I suppose unstable would be a good way to put it. This upward push is no different than when we plummeted to a new low and left signals behind before. We then went up and collected them.
So in terms of trends, I think we need to run down and collect these missing signals and head down to 3950. Once there, I'll have to reevaluate and see where we might go next. This upward movement could very well have been the Head of a Head and shoulders formation. So I could see us go down to 3920-3950, back up to around 3990-4010, and then be in for some pain. However, that's just a guess, and I trade off trends, so we will have to see what happens.
So Upside;
The 2-Hour and 3-Hour have fresh higher high trends, although we are under both ascending lines and sitting right at the 2-Hour Uptrend signal. We have to get back above and stay above the 2-Hour and regain some footing on the 3-Hour Uptrend line. If we do, I could see more upside movement to capture that high peak from yesterday.
The Downside;
Lower Highs and Higher Lows is a reversal trend pattern, albeit the less desirable one. The 30m has formed that and unless the 1-Hour can shove it's way back down below 3953 in a single push, it will also form that. Additionally, we are missing some key downtrends that we need to reacquire for any actual push, so the short term has a lot of downside also. Also, for such a big day yesterday, volume was only 1.6 million. That isn't bad, but I have always looked for a 2+ million day as commitment in the Futures ES Market.
The Economic Data;
Not the first time I was left wondering if anyone was watching the same Press Conference I was. Every time I thought the data was extremely dangerous towards stocks, I held off doing anything and watched the market go up. I knew this was still a possibility, but I thought perhaps the market had learned from the last few times it had a FED Day push, just to be slapped the following day with a plummet down. I even went back and looked at the reports of major financial sectors to see if I missed something. Nope. The basis behind the speech was that the Fed is willing to take us into a recession and even raise interest rates higher again if need be to fight inflation. These should have given a more bearish tone yesterday, and yet, there we went 70 points higher and are still sitting 40 points up. Additionally, Powell basically said he isn't giving guidance anymore, so "good luck". Which to me, he did so that he can decide he can raise rates to whatever next time and when people get upset, he can say, "No, I told you I wasn't giving guidance anymore."
Incoming today, is the GDP reading at 08:30. We had a decline of 1.6% last time, and the expectation is we will have a positive of 0.5%. The main reason I believe we may get a negative reading is politics. There have been several press releases out from the White House attempting to redefine that two negative GDP quarters does not make a recession. That is of course, incorrect. While not a full recession reading, two declining quarters puts us in what is called a "Technical Recession". We need unemployment to increase to around 5% until we could consider an actual recession. However, I wonder if the White House doesn't already know it is going to be a negative reading, and is attempting to change the narrative ahead of time.
We also have jobless claims as we do every week today. It was at 251,000, and is expected to increase to 253,000. I would tell you that a decrease in GDP and increase in unemployment should cause people to jump out of stocks, but I've come to the conclusion that with all the new investors, not a lot read the data and interpret it in a more traditional sense.
Then we have Earnings;
While yet again, who knows how people will react after they swallowed up Microsoft and Google on poor performance and potentially empty promises, Facebook posted a VERY poor performance, and its guidance is "we will layoff people and cut costs to try and do better". That SHOULD create a sell off of Facebook, however, again, maybe people are just thinking they can bargain shop and get these stocks now and somehow we shall magically rise back up to our highs of the year by the end of December.
In Earnings for today, we have Apple (AMC), Amazon (AMC), Intel (AMC), Linde (BTO), Mastercard (BTO), Merck (BTO), Pfizer (BTO), Thermo (BTO), Comcast (BTO), and of course a slew of other major cap but smaller companies. I'd expect Amazon to play a major factor in other retail and online sales companies. Mastercard might be looked at in how we are approaching a recession and consumer spending. As for the others, their respective stocks are large, but other companies in their sector have reported so I'm not sure they will have as large an impact on mutual companies in their sectors. Apple though has a huge weight in the S&P, so it could be a big factor alone in price movement.
It is possible that some of those companies already reported while I was typing this up also. I'll go check after I finish my coffee.
Overall sentiment on the day, and remainder of the week actually, is bearish. At least until we hit the 4-Hour Downtrend mark.
In terms of Economic Data;
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Looks like Merck beat Earnings estimates and did pretty well.
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Thermo beat estimates as well.
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No one seems to want to report the actual numbers yet, but it appears Comcast missed Earnings and had a reduction in subscriber growth.
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GDP is -.9%
I knew it. That puts us in a technical recession.
I knew it. That puts us in a technical recession.
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Based on the stupidity of the market, maybe people will look at a technical recession and think they should buy, buy, buy......................................
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It's like do the opposite has become the norm. I was half joking when I said that people would buy into a technical recession, but here we are... watching the price go up after awful GDP readings.
There is a lot of concern we are heading into stagflation as well. Maybe stagflation is a buying indicator here in 2022? Stagflation has destroyed corporate earnings in the past, so I guess we as investors should look at that as a great time to pump money into corporate investment?
Stay tuned for the next episode of WTF are we doing in this market? LoL............
There is a lot of concern we are heading into stagflation as well. Maybe stagflation is a buying indicator here in 2022? Stagflation has destroyed corporate earnings in the past, so I guess we as investors should look at that as a great time to pump money into corporate investment?
Stay tuned for the next episode of WTF are we doing in this market? LoL............
Comment:
I'm just gonna finish my rant... and then take a break...
J Powell was VERY clear that he will hike into negative growth yesterday, and hiked 75 bps, said they won't give any real guidance going forward other than their primary focus on inflation only.
So now that we had two quarters of negative growth, we enter into a technical recession. The belief is that the Fed can't hike into a recession. However, Powell JUST said he will hike into a recession, that inflation is a bigger concern to him than a recession.
I can't wrap my head around this significant risk on mentality. When did investors start tossing caution to the wind? I wonder if that is what will setup a really painful drop, if the drop ever comes. Is that so many investors from jumping in with their ears closed take such a hard hit, that people start losing their shirts and thinks just start really taking a dive.
J Powell was VERY clear that he will hike into negative growth yesterday, and hiked 75 bps, said they won't give any real guidance going forward other than their primary focus on inflation only.
So now that we had two quarters of negative growth, we enter into a technical recession. The belief is that the Fed can't hike into a recession. However, Powell JUST said he will hike into a recession, that inflation is a bigger concern to him than a recession.
I can't wrap my head around this significant risk on mentality. When did investors start tossing caution to the wind? I wonder if that is what will setup a really painful drop, if the drop ever comes. Is that so many investors from jumping in with their ears closed take such a hard hit, that people start losing their shirts and thinks just start really taking a dive.
Comment:
So, most in the news are proclaiming we have stagflation today.
I believe, based on my economic lessons, that we need an increase in unemployment to keep from stagflation.
I will say that if unemployment starts to go up, we are likely going to see some serious pain in America, all stock market stuff aside, as that will now enter us into a recession and in stagflation.
That being said, according to trends, it looks like we are going to keep trying to carry up this unstable push higher, as we are pushing up above the 3-Hour uptrend.
I believe, based on my economic lessons, that we need an increase in unemployment to keep from stagflation.
I will say that if unemployment starts to go up, we are likely going to see some serious pain in America, all stock market stuff aside, as that will now enter us into a recession and in stagflation.
That being said, according to trends, it looks like we are going to keep trying to carry up this unstable push higher, as we are pushing up above the 3-Hour uptrend.
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So in looking at other FED Days and the days after. It may sound unheard of, I think we end today at 3900 or close to.
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So we have a new 30m Uptrend, which eliminates that lower high issue. We bounced off the level so far at 4032, although we peaked above it. I guess only time will tell.
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On the micro levels, with that whipsaw we have both the 5m and 15m showing lower highs and lower lows.
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30m Downtrend signaled at 4000. That gives us a lower low downtrend and a higher high uptrend with the 30m.
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So after weeks of mostly one directional or small whipsaw days, we get today. Within the day, we have extreme lower lows and higher highs within the same day.
5m and 15m Uptrends are extremely elevated in ascension
5m and 15m Downtrends are descending but not quite to the extreme degree of the uptrends.
I mean, in terms of trends, I've no idea. Just overall increased volatility. I took a short break so I'm not sure if something came out at 10:30 that promised to save the economy? I'll have to backtrack and check.
5m and 15m Uptrends are extremely elevated in ascension
5m and 15m Downtrends are descending but not quite to the extreme degree of the uptrends.
I mean, in terms of trends, I've no idea. Just overall increased volatility. I took a short break so I'm not sure if something came out at 10:30 that promised to save the economy? I'll have to backtrack and check.
Comment:
Was looking at volume, unless it dies off here, this will likely be a massive volume day. Likely comparable to June 16th, June 30th, or July 13th. Both of which signaled reverses of their trends because everyone burnt themselves out trying to push their respective trends to continue.
However, I didn't really see us ending up over a half a percent higher at all today. So at this point, the Market is just unchained and sentiment is all over the place.
However, I didn't really see us ending up over a half a percent higher at all today. So at this point, the Market is just unchained and sentiment is all over the place.
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30m Uptrend hit at 4055. It puts us with a higher high and lower low in the 30m now also. The 30m ascending line is like... unsustainable so I wouldn't use it as anything viable, other than where it signaled.
I believe I've finally understood this current market climate. "Be irrational, before rational." It may become my new trading mantra until all this insanity is over lol
I believe I've finally understood this current market climate. "Be irrational, before rational." It may become my new trading mantra until all this insanity is over lol
Comment:
And it shows up finally. Here at the 4085 level we have a Daily Uptrend signal. It flashed and went away, but it is here if we keep up here.
It would be a higher low daily uptrend. So take that as you wish, but honestly, the last 48 hours have been destroying trends as they've traded in my last 3 years of experience. Additionally, we got up here with a lower high 12-Hour uptrend.
I would think we have some sort of pullback coming up here, but I thought we weren't getting up here to begin with, so who knows.
It would be a higher low daily uptrend. So take that as you wish, but honestly, the last 48 hours have been destroying trends as they've traded in my last 3 years of experience. Additionally, we got up here with a lower high 12-Hour uptrend.
I would think we have some sort of pullback coming up here, but I thought we weren't getting up here to begin with, so who knows.
Comment:
The last Daily Uptrend signal was the close of March 29th by the way. I'd point out where we went afterwards, but honestly, one occurrence doesn't make history. So I'll just sit here and groan through this rally as I keep my short for the time being.
Comment:
After a very long bit of consideration, I'm going to hold my trade a bit more. Can't say I've gone this negative in a single trade before. However, you can't win them all, and I still believe we need to go down to collect some higher timeframe trends, since we have left them all nearly 200 points behind. I also think we still need a 12-Hour downtrend before we can truly push upward.
Eventually, I may decide to just eat the loss. However, I've made my living on trading on trends, I don't know that I can let some pretty bizarre behavior kick me off of what has worked for 3 years now.
Eventually, I may decide to just eat the loss. However, I've made my living on trading on trends, I don't know that I can let some pretty bizarre behavior kick me off of what has worked for 3 years now.