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This Week's Risk Windows


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#1 Douglas

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Posted 25 November 2018 - 09:55 PM

As I noted previously, Monday the 26th is in a two trading day risk window along with Friday the 23rd.  Given the recent slumping market, I expect that window to contain a low, although less likely, it could be a downside acceleration event.   The other risk window this week falls on Wednesday the 28th according to my system. 

 

Lots has been written on this site about current negative sentiment.  Call me not completely convinced yet based on what investors are doing as opposed to what they are saying.  Go to www.stockcharts.com and plot the daily closing tick ($tick) versus the SPX since the sell off started.  Other than one day the first nasty week, by the close each day folks have at worst been only slightly negative.  Last Friday  they were giddily buying the dip with both hands near the close trying to catch "the" low.  That is not the reaction of someone who's afraid.  I am aware that so called smart money acts near the close and Friday was in a risk window that typically produces a low, but still you'd think the fearful herd would have been overwhelming if sentiment was truly that broadly negative.  

 

Regards,

Douglas



#2 qqqqtrdr

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Posted 26 November 2018 - 10:28 AM

Friday, I jumped in with both feet.. All my 401K went from cash to long...  The sentiment signals and put/call signals were screaming buy, and with amount of puts out there the chances of the a panic sell-off was not likely...    A decent bounce was likely...   I hope it is the bottom and we go higher now, but my charts give an output like the weather..   I'm pretty confident for the next 3 days, but after that I need to see if the bullish scenario holds....

 

qqqqtrdr



#3 Douglas

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Posted 26 November 2018 - 10:31 AM

No fear this morning, so the Friday close dip buyers were indeed the smart money (a.k.a. qqqqtrdr) and the Friday leg of the two day risk window did apparently catch a low.  This would point to a top on Wednesday, or if the FED folds, an acceleration to the upside. 

 

Regards,

Douglas


Edited by Douglas, 26 November 2018 - 10:33 AM.