Crash Analysis

Here are my thoughts on the SP monthly.   

Multi-day update

 Will go ahead and put multiple days together.  Good structural cues everywhere. 

10-1

Following a down day, a 1st hour check mark pattern unfolded.  Classic bullish behavior. 

10-4, happy Monday. 

10-5, Tuesday

10-6, Wed

Down Day

Low confidence down day, but they did close it -1%, which is non too shabby. 

We are in daily reversal zone now, so the nod for an upside try, but if selling hits again so be it.  

 

Range Day

 Range day today.   This market would suggest an up day tomorrow most likely as sellers didn't get anything done to follow through. 

Confidence Red Day

 They don't come often, but they do intrigue me to post.  Run of the mill average up grinders days are so boring!   

Today bottomed out in the 2% down zone, which I think has been a big zone over previous down days as well, but will have to do more research.  

Double bottom was perfect, and set up by the bounce high tick readings of 1000.  And trade to VWAP was perfect.  

The only thing I'm a bit surprised about was that VWAP reversed price so perfectly.  The shorts were trapped and should have not had it so easy. 

But it's a bull market and as I write afterhours the futures are up 24 points.  

I'm leaning bullish for tomorrow but would not be surprised to see a rally fail.  

Confidence Red Day

Our suspicions with the pattern failure yesterday were correct, the sellers were building their case.  

High  confidence sell day today with beta leading lower.  

Big caps are still in the zone where a buy response could happen on a dime.   Same with small caps, although that index looks a bit more toppy, having based for so long.  

If sellers are going to come in and gun it,  no need to be a hero and fade.  But in this market, you have to keenly be prepared for short squeezes.  

Afternoon Base

The afternoon base was a bit puzzling.   If shorts were trapped, then that triangle gets bought.  

So I'm leaning bearish going into tomorrow but with low confidence.  

 

Great Trade Idea

 Today, the naz and iwm folks were selling off while the es held her own.  

The trade of the day was to see this and pounce. 

Down We Go!!

 Not bad:  Serious explosion!

So it's been over two years since a blog post.  Throughout the last two years, I've posted many times in my brain.  But I'm working now and have a very busy practice.  Trading, by comparison, is chump change.

But let's look at today, after the 10% rout.

This is different this time versus the last true bear in 2008.

Bottom line:  I don't know.  I'm thinking lower, lower, lower...  That, or a massive short covering rally in the cards.

All of the reasons aside,  I don't think this market goes massively lower.

Evidence of panic: https://www.intellectualtakeout.org/article/coronavirus-mass-hysteria

I feel a lot of the selling is margin calls.  Too many too comfortable for too long.  No free lunch folks.

See you tomorrow.  I really miss blogging.  Go take a cruise tomorrow and enjoy life.

The Grind is On?

This is just the action we expected after Friday's V-rebound. 

Don't out think this stuff. 

If they keep doing this, without a major reversal, then it could go on for weeks back to highs.

Not getting ahead of myself but I'm keeping that option open in the head, so I don't out think it.

Corrections can look really scary.