Uptrends Weakening; Levels to Watch for the Day
Well, I had ended yesterday by mentioning I would be watching for a Gap Open, and sure enough, we had one. After closing at 4123, we opened at 4119.
Overnight we had a change of the 1-Hour to a Downtrend right at 4099. Due to the major upswing of the 30m at 4143, it actually signaled lower than the 1H, and signaled in at 4085. This is really important to watch, because it puts the 30m at a lower low on the downtrend signals.
Now, before embracing the doom and gloom potential plummet I think has been overdue to this bizarre rally on awful economic news, any downtrend of these next timeframes will be a higher low if they signal (2-Hour to 6-Hour) unless we plummet some 200 points in the changing signal. Not impossible, but that's a bit much for a 6-hour time period. Remember that we opened low yesterday, but then still had a rally that even managed to find new highs. Bulls have been desperately attempting to hold onto this momentum.
However, not all trends were up, as we revisit the lower high Daily signal at 4105. I drew in the descending uptrend line on the Daily trends, and you can see we are falling below it.
I won't draw the higher high uptrends of the 2h and 3h, but just know they are around 4085 (3h) and 4079 (2h). The last level of support I see is an uptrend channel that connected the previous highs (not timeframe trend signal related) that hits around 4065.
If we fall below that, I have no resistance on my charts until 3955 where the 6-Hour Uptrend will pick up. However, every downtrend that signals will be a higher low downtrend signal, so I'll be watching to see how we melt through them.
Economic Info for the Day;
Pelosi's visit is all over the news today, and the concern that it could cause military conflict between the US and China, or, the more likely outcome, some economic fallout between the two with potential cyber attacks on Tech companies in California by the Chinese government.
Again, I'll repost my previous comment on Earnings I'd commented on for this week;
Aug 2 - AMD (AMC), CAT (BTO), PayPal (AMC), S&P Global (BTO)
AMD could be one to watch because of Intel doing poorly.
If AMD also does poorly, it could cause some loss of confidence in the Tech Sector, maybe...
We have JOLTs Job reporting today, and some Fed Speakers who may comment on to clarify if Powell's comments were to have been hawkish or dovish amongst this market rally.
Lastly, as I've continued to warn, I'd watch the Energy Sector. It dropped over 2% yesterday, and I think if there is weakness in the market, it could come from that sector that has made major growth this year in spite of overall stocks plummeting.
Even with all the resistance, this rally, in terms of trends, was built on unstable ground, and could then fall as quick as it built up.
Overnight we had a change of the 1-Hour to a Downtrend right at 4099. Due to the major upswing of the 30m at 4143, it actually signaled lower than the 1H, and signaled in at 4085. This is really important to watch, because it puts the 30m at a lower low on the downtrend signals.
Now, before embracing the doom and gloom potential plummet I think has been overdue to this bizarre rally on awful economic news, any downtrend of these next timeframes will be a higher low if they signal (2-Hour to 6-Hour) unless we plummet some 200 points in the changing signal. Not impossible, but that's a bit much for a 6-hour time period. Remember that we opened low yesterday, but then still had a rally that even managed to find new highs. Bulls have been desperately attempting to hold onto this momentum.
However, not all trends were up, as we revisit the lower high Daily signal at 4105. I drew in the descending uptrend line on the Daily trends, and you can see we are falling below it.
I won't draw the higher high uptrends of the 2h and 3h, but just know they are around 4085 (3h) and 4079 (2h). The last level of support I see is an uptrend channel that connected the previous highs (not timeframe trend signal related) that hits around 4065.
If we fall below that, I have no resistance on my charts until 3955 where the 6-Hour Uptrend will pick up. However, every downtrend that signals will be a higher low downtrend signal, so I'll be watching to see how we melt through them.
Economic Info for the Day;
Pelosi's visit is all over the news today, and the concern that it could cause military conflict between the US and China, or, the more likely outcome, some economic fallout between the two with potential cyber attacks on Tech companies in California by the Chinese government.
Again, I'll repost my previous comment on Earnings I'd commented on for this week;
Aug 2 - AMD (AMC), CAT (BTO), PayPal (AMC), S&P Global (BTO)
AMD could be one to watch because of Intel doing poorly.
If AMD also does poorly, it could cause some loss of confidence in the Tech Sector, maybe...
We have JOLTs Job reporting today, and some Fed Speakers who may comment on to clarify if Powell's comments were to have been hawkish or dovish amongst this market rally.
Lastly, as I've continued to warn, I'd watch the Energy Sector. It dropped over 2% yesterday, and I think if there is weakness in the market, it could come from that sector that has made major growth this year in spite of overall stocks plummeting.
Even with all the resistance, this rally, in terms of trends, was built on unstable ground, and could then fall as quick as it built up.
Comment:
Looks like we may have our morning rally like we've come to expect.
Comment:
Job Openings came in slightly lower than expected. Could show some slowdown in the labor market, but unemployment is still fairly high, which is a contributing factor in the rise in inflation. Who knows how the market will respond to this though. It means there is a slight push towards a recession, but potentially a move away from inflation. Would need to see unemployment rise though.
Comment:
Brief push there below the 3-Hour and 2-Hour Uptrend lines. Looks like the morning rally might have burnt out a lot faster today than it did the last couple days.
Comment:
Looks like after all the fanfare, we are stuck below the 1-Hour higher low ascending line, and the 2-Hour higher high ascending line. Literally bounced off of both during this whipsaw movement.
Comment:
Overall whipsaw day. However, we have a lower high with the 30m Uptrend, as it pinged at 4117. In order to keep a lower low, we'd need the 30m to push below 4086. Not sure that will happen, however, we got a new 1-Hour Uptrend at 4139. So now it won't be too difficult to acquire a lower high 1-Hour uptrend, and we only need to push and get a 1-Hour Downtrend to have a lower low downtrend also. Be an interesting end of the day to watch today.
Comment:
The lows came back in to stay for the day. We have been hitting off this 4080 low level since Friday before we've made these highs three times now. So, again now you have to decide, is this a head and shoulders, triple top, double bottom?
I have a bearish bias I think, so I'm seeing bear signals, but I've been seeing bear signals since we were around 3970, and clearly I was wrong in that one. Although, historically trends have been 80% accurate, and I was long overdue to get one wrong when we came up here instead of going down as we should have in terms of trends.
Be interesting to see if we push lower overnight or now have a rebound and run opposite as we have the last few days.
I have a bearish bias I think, so I'm seeing bear signals, but I've been seeing bear signals since we were around 3970, and clearly I was wrong in that one. Although, historically trends have been 80% accurate, and I was long overdue to get one wrong when we came up here instead of going down as we should have in terms of trends.
Be interesting to see if we push lower overnight or now have a rebound and run opposite as we have the last few days.
Comment:
On the Earnings front... AMD missed Earnings pretty badly. With Intel also getting hit, I could see that falling into the Tech field in general.
Although, even with great Energy company earnings, I still see a pullback on some energy sector earnings as highly probable. It was slightly negative today. It already had a pullback the first half of June when we hit our last lows, but then regained some footing. I just see it losing another 15%, which still puts it up 40% for the year but would be the catalyst that sends us to revisit the 3600 level or even lower.
Although, even with great Energy company earnings, I still see a pullback on some energy sector earnings as highly probable. It was slightly negative today. It already had a pullback the first half of June when we hit our last lows, but then regained some footing. I just see it losing another 15%, which still puts it up 40% for the year but would be the catalyst that sends us to revisit the 3600 level or even lower.