Well, that was a day! What happened the last hour? Clearly, the pitchfork trendline was broken near the open, but its parallel line was held throughout the day until the last 1/2 hour. A clear bearish assault on 237 was made and accomplished to get below, before it was brought back to 237+ by the close. We have tested the 237 area four times in the last four days and penetrated it for the first time in the last 1/2 hr. The SPY market appears to be flagging down ward.
We also got no rally at the close, in order to move the 8 & 20 hr MOVs and get them to cross. We did get outside the down trend channel late yesterday and then mid day today. We actually are still outside the channel, but we went down to it in the last hour of the day and close outside the channel at the close. I initially thought the potential bottom formation was spoiled by the last 1/2 hour; but the waveform down was terminal in re-examination. It's possible that the horizontal nature of the day's formation required the fake out below 237 to complete the pattern.
On the 2 hr plot the SPY hasn't been this oversold, since the two days following the potential 2-day Island Top of late Jan. I also plot the TRIX on the same plot as the momentum, since when they cross, they foretell a change of trend. On the 2 hr plot the momentum has crossed above the down trending TRIX as it did in the turn around after the island reversal. It may take a few days to generate significant upside, but the potential of a bottom is actually here.
$NYMO has gotten down to -60 in the last four days. With -40 of it in the last two days, even though the number of points lost on SPY has been relatively small. The last two days have been outside the BB of $NYMO, which has normally marked a bottom, if you look over the last year of data. It has lead to an immediate rally or a bottom followed by a flat area that has lead to a rally. Two consecutive days of being outside the BB is fairly rare (in a bull market).
Finally, the $CPCI & the $CPCE both when lower, rather than demanding more puts and shorts. This is a bearish development that you would have thought sentiment would be getting bearish instead of bullish. Yikes!
I believe the market is oversold at this point (Mr Dev had it so earlier in the day) and the last hour seemed to only exasperate that condition, if I am correct. We have filled the gap and tomorrow is supposed to be the low (I errored before in saying it was today; its 3/8). I got the impression that tomorrow could be one of those days that we gap up at the open and run all day, due to the oversold condition. It's not how I would have like to see it go, as we didn't gap low enough to get an OOPS buy this morning. Clearly, that could happen tomorrow. and its been 5 days since we had the gap higher last Wed AM. So we have sold off for 4 consecutive days. We haven't done that for over a month and 3 months ago.
Clearly we are ripe for going down tomorrow, and it would put me in a dilemma in that I went long today at several different times. When looking at all the factors, it looks like we can have a bottom and should have a bottom, but the doing is in the actual rise in price. With 3/8 slated to be a low, we do have potential to put in a bottom here, but I would hate to see it come from lower levels.
Edited by thoughtpwr, 07 March 2017 - 06:34 PM.
