We mentioned that the fed spike "did not sit well in our gut" and it turns out that this was the correct analysis. Pure, zoomer, liquidation spikes like that so many times get re-traced. It's the nature of the beast, because they are so short-covering-based, sucking buying power out of the market.
Yesterday's balance (and failure to punch higher) was a major signal to confirm the prior day's exhaustion. And the steady grinder down action today hit the obvious destination of 1700 and near full re-trace of the fed madness spike. And it was steady with high volume, indicating heavy institutional forces were at the helm.
The programs will be locked in on 1700, so a bounce of some variety will be likely on Monday. If a bounce higher materializes and then fails, and 1700 gets taken out again, potentially watch out for a move back down to the 1680 zone gap and then the 1665 zone gap. Lowest odds scenario is a never ending bull market bounce punch higher. But we have scene that movie before, so you never know.
On that note, October is looming. Can the buyers pull another rabbit out of their hat yet again? Sure, but Wednesday's happy little panic event has all of the earmarks of ushering in a major top. Or at least a major corrective down leg. As we will point out, the monthly chart is nothing but a minor high of the 2000 all time highs. And any reader of this blog knows that the minor high pattern can be one of the most pounced upon reversal patterns -- on all time frames. Buyers have to watch their back at this zone in a major way.
No comments:
Post a Comment