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ST low in place, how high can it bounce?


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#1 dTraderB

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Posted 11 October 2018 - 06:17 PM

As I posted at about 3:22pm earlier today, the LOW was in place, and so it has been, at least until now. 

 

IT low? No, not as yet, because we have to see more energy & resolve from bulls. Some may still be holding losses and this will deter them from jumping in at these level. 

 

That's not the low for 2018. 

 

Where will this bounce end? Maybe at 2790/2800? or all the way to 2860? or even higher.

 

But, I think we have seen the high of 2018, with a very low probability that the market may rally to it and make a new high at about SPX 3000. I don't think so but I do not rule it out in Q1 2019. 

 

If you know the history of the Chinese, you will not take them for granted, they are very patience, they are superb at timing their actions, and they analyse your weakness & exploit it to the fullest. The trade war is now in its early stages but there is still time to resolve it or else the market will not like it. 



#2 dTraderB

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Posted 11 October 2018 - 06:20 PM

Had a great day today but not as good as yesterday, mainly because I do not want to give back any! 

Traded conservatively, most of my early trades were NQ long, I bought a few more QQQ puts and closed most in the afternoon session. 

After that, I trade NQ short, but was not as aggressive as yesterday. 

Had one nice VXX long trade but decided to focus on NQ and QQQ. 



#3 dTraderB

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Posted 11 October 2018 - 06:22 PM

NDX IT Trend Model Neutral Signal - Climactic Breadth Readings Continue Erin Swenlin | October 11, 2018 at 06:32 PM

The Intermediate-Term Trend Model Neutral signal generated today on the Nasdaq 100 (NDX) replaced a May 9, 2018 BUY signal. It was another exhausting day as we watched the correction continue with prices free falling lower. Yesterday I pointed out the climactic breadth and VIX readings and suggesting a selling exhaustion was underway. I went out on a limb (which I hear cracking right now) and wrote that I'm looking for a bounce before the week ends. Breadth readings are still suggesting a selling exhaustion to me. Be aware, these are very short-term indicators so seeing a rally pop is...

 

https://stockcharts....s-continue.html

 



#4 dTraderB

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Posted 11 October 2018 - 07:20 PM

Fed policy error

President Donald Trump on Wednesday partly blamed the Federal Reserve for headwinds in the market. “I think the Fed is making a mistake. It’s so tight, I think the Fed has gone crazy,” he said, reiterating criticisms that he has harbored about the central bank’s intent to normalize interest rates from crisis-era levels and prevent an overheat of the economy.

CNBC’s Cramer and others also are making the case that a policy mistake by the Fed may be the market’s undoing.

Is it time to panic yet?

Some market participants say it isn’t quite time to panic, but advise caution.

“My expectation is that selloff will be similar to what we saw earlier in the year and ultimately this will turn out to be a good buying opportunity for those investors that have a longer time horizon and have a portfolio that suits their risk tolerance,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

“How long could this little correction last? Well, the one in late 2015 lasted about seven months but that was a full-on earnings recession, I don’t think we’re facing that right now,” wrote Antonelli in a note, referring to the 2015 downturn in markets partly sparked by concerns about a slowdown in China’s economy.

“These kind of moves are also good for one thing: Making a shopping list of all the names you wanted to own lower and saying ‘here’s my chance, lemme do some homework and see if I still like it.’ Opportunity always abounds, my friends, you just gotta find it,” he said.

https://www.marketwa...ears-2018-10-10



#5 dTraderB

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Posted 11 October 2018 - 07:23 PM

LOL

Dow 40,000 is coming, but only after ‘a large panic event’ passes, analyst warns

 

https://www.marketwa...arns-2018-10-11

 

 

This is Possible:

Blackstone’s Byron Wien says S&P 500 on track for year-end rally to 3,000 despite stock-market wreckage

https://www.marketwa...kage-2018-10-11



#6 redfoliage2

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Posted 12 October 2018 - 02:59 AM

I'd not be surprised to see SPX gaps up by 50 points......................



#7 dTraderB

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Posted 12 October 2018 - 06:35 AM

Yep. Extreme bearish sentiments during the past few days that finally culminated in blood-in-the-streets

 

But, am not as yet convinced the October bear will retreat to hibernate for another few months. 

 

One reason why I stopped trading VXX overnight: it's down by 3.23 as I write this!



#8 dTraderB

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Posted 12 October 2018 - 06:37 AM

That overnight ES high is the major resistance today. 

 

The SPX opening gap will be huge, as you wrote, so it may be filled in the not too distant future. 



#9 dTraderB

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Posted 12 October 2018 - 07:03 AM

History tells us that while large divergences are possible at times, they’re unsustainable. What was the source of the divergence? Maybe the crowd had assumed that an extraordinary economic boom in the US would carry the day.  Whatever the explanation, a huge gap unfolded in performance between the US and the rest of world – a gap that was destined to close at some point.

“The sharp rise in US 10-year yields has caused investors to suddenly reprice the impact of moving from post-crisis low yields to a rising rate environment,” advises Eleanor Creagh, a strategist at Saxo Capital Markets in Sydney. “We have the global growth engines, price of energy rising, price of money rising and quantity of money falling combined with the ongoing trend of de-globalization which has started to impact markets and the cracks are showing.”

Analyts at ANZ agree, opining that “equity markets are locked in a sharp sell-off, with concern around how far yields will rise, warnings from the IMF about financial stability risks and continued trade tension all driving uncertainty.”

The question from a US perspective is whether an extended slide in stock prices is warranted? Quite a lot of the answer will be based on the economy. For the moment, the numbers still look encouraging. Recession risk remains virtually nil, as noted in this week’s update of the US Business Cycle Risk Report, based on data published through Oct. 5.

Meanwhile, the outlook for the immediate future remains upbeat, based on the latest nowcasts for third-quarter GDP, which is due later this month’s in the government’s preliminary Q3 update. The Atlanta Fed’s GDPNow model (as of Oct. 10) points to another strong quarterly gain, projecting a 4.2% rise in output for the three months through September. The New York Fed’s Q3 nowcast (Oct. 5) is considerably softer via a 2.3% estimate, but it’s safe to say that both numbers strongly suggest that the nine-year US expansion will roll on for the foreseeable future.

If the economy continues to grow, there’s a reasonable case for seeing any slide in stock prices as a buying opportunity rather than a signal that an extended bear market is upon us. Ongoing rises in interest rates could temper a rebound in equities, but as long as yields are trending up due to solid economic activity it’s reasonable to assume that the big picture for stocks remains productive. Expected return may no longer be stellar, although the further stocks fall the better the outlook.

The usual caveats apply, of course, but the first order of business for putting a market tumble into perspective is monitoring how the macro trend evolves. By that standard, it’s premature to assume the worst. By contrast, if the incoming data reveals that the macro profile is deteriorating, we may be looking at more than a “normal correction,” as US Treasury Secretary Steven Mnuchin characterized yeseterday’s sharp decline in the stock market.

 

http://www.capitalsp...k-market-slide/



#10 dTraderB

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Posted 12 October 2018 - 09:47 AM

Much more selling pressure than I thought

 

Fear still prevails in the markets