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The C word - market acting very weak, could plunge


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#1 dTraderB

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Posted 02 August 2019 - 12:20 PM

Heavy selling on a Summer Friday afternoon, on August, can take this market down, deep & fast. 
 

However, while there is no such thing as PPT, there are strong entities that can step in quickly. 

Be prepared: for deep & rapid plunges or sharp & punishing rallies!



#2 dTraderB

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Posted 02 August 2019 - 12:24 PM

I am very hesitant to trade NQ long this afternoon but I MUST, because there can be very profitable large bounces! 

Got this in the mail:

"In my last public 6/24 post, I was looking for a 6/21-24 swing High.

 
Forecast from 6/25 Raj T&C Daily Email: "From 6/21H, we then decline into 6/26L,  then rally into 7/2-3 T&C Cluster High."
 
Actual: We saw a 6/21H and declined 51.16 SP's into 6/26L (#1 on chart below) and rallied 82.85 SP's into 7/3H (#2).
 
 
Forecast from 7/11 Raj T&C Daily Email: "The current bias is from the 7/9L, we rally into 7/12-15H.  We then decline into 7/19-22 T&C Cluster"
 
Actual: From the 7/9L, we rallied 54.36 SP's into 7/15H (#3) and declined 44.71 SP's into 7/18-19L (#4).
 
Forecast from 7/24 Raj T&C Daily Email: "from the 7/18L, we rally into 7/24 quadruple Time Cluster. From there we decline into 7/26L, rally into 7/30H and then decline into 8/5L"
 
Actual: We rallied into 7/24H (#5), decline into 7/25L ( A), 1 day earlier, made a 7/26-29H (B), 1 day earlier and we should now decline into 8/5L ©.
 
 
For many months now, we had the 4 year cycle looking for a sharp decline in August 2019.
 
For more than a year now, the Master Cycle pinpointed August 2019 as a potential Crash wave Low.
 
 
The long term 8-10 year (since March 2009L and Oct 2011L) weekly channel resistance has proven to be formidable resistance.
 
 
The 1½ year red channel resistance (since 1/26/18), currently @ 3025 SPX was not breached as well. We declined below the 1 ½ month Cyan channel, confirming the 7/26 Geo time CIT High is in place.
 
What's Next: We decline into the 8/5 Time and Cycle Cluster and make a swing Low, but be alert we could see a sharp crash like decline in the coming weeks."
 
 
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#3 dTraderB

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Posted 02 August 2019 - 12:25 PM

go to go, market calls,  after a very late lunch...



#4 redfoliage2

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Posted 02 August 2019 - 01:39 PM

At this point it seems that the ST support at SPX 50 dma may hold for a few days, to be followed by a test of the trend line support at 2900 next week.  Let's see if the trend line support could hold or not.  The chance for a breakdown there is good..................


Edited by redfoliage2, 02 August 2019 - 01:48 PM.


#5 tradesurfer

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Posted 03 August 2019 - 12:52 AM

do you or anyone else agree with the premise of this IWM weekly chart ?   it is saying that during the next 2 weeks exactly, (possibly 3)  we should plunge hard down as a result of this pattern similarity

 

 

48443335731_79f632566d_k.jpg


Edited by tradesurfer, 03 August 2019 - 12:53 AM.


#6 dTraderB

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Posted 03 August 2019 - 02:16 PM

do you or anyone else agree with the premise of this IWM weekly chart ?   it is saying that during the next 2 weeks exactly, (possibly 3)  we should plunge hard down as a result of this pattern similarity

 

 

48443335731_79f632566d_k.jpg

 

 

There is a high probability of a plunge of as much as 15% but it is more likely the market will try to bounce first; if this fails, then the 50 and 200ma 

will be the two main supports. 

A drop of 10 to 15% is tolerable but "they" will not allow it drop further without a PPT-type intervention.

A slow decline to SPX 2860 is my preferred path.



#7 dTraderB

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Posted 03 August 2019 - 02:56 PM

Pushing on string after the recession horse has bolted? 

Don't think so....economy is still strong but globally it is not so

 

Lance thinks it is so:

 

"We had also warned previously the current extension of the market, combined with overbought conditions, was due for a reversal. That reversal has indeed begun, and short-term sell signals have been triggered.

SP500-OB-OS-Chart1-080219.png

“As we have noted over the last few weeks, the very tight trading range combined with negative divergences also does not historically suggest continued bullish runs higher without some type of corrective action first.”

Chart Updated Through Friday

SP500-OB-OS-Chart3-080219.png

This past week, a disappointing cut by the Fed, and increased tariffs on China from the White House, provided the catalysts needed for a very quick market rout.

As noted in the main body of this week’s missive, a less than anticipated rate cut, and outlook, by the Fed tripped up participants. Then Trump deciding to add additional tariffs on China, in order to force the Fed to cut rates, roiled stocks even more. 

Stock sold off for the entirety of last week, so expect a rally early next week to sell into. Take some actions if you have not already as the next two months could bumpy. The correction is likely not complete yet.

  • If you are overweight equities – Hold current positions but remain aware of the risk. Take some profits and rebalance risk to some degree if you have not already. 
  • If you are underweight equities or at target – rebalance risks, look to increase holdings in domestic equities opportunistically if the markets can hold support at the May highs next week. 

As noted last week:

“With the markets back to extremely overbought conditions, patience will likely be rewarded.”

Now you know why we are patient.

https://realinvestme...ariffs-08-02-19



#8 dTraderB

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Posted 03 August 2019 - 02:59 PM

Carl:

 

 

cad3b021-2c30-4b8b-8831-f2b4fff8bec9.jpg

In some cases technical analysis can help us anticipate reactions to scheduled events. For example, the Fed announcement was long-anticipated, and you'll note on the chart above that a rising wedge formation appeared in advance of that event -- the final top forming on Monday. A rising wedge is a bearish formation, so we could anticipate that the reaction to the announcement would probably be negative, but there was no clue as to the magnitude of the reaction.

There was no advance warning of the president's proposal of new tariffs on Chinese, so there was no way to anticipate Thursday's decline, even though in hindsight the decline was not a surprise, given the news.

The last item of news I cited is more ambiguous regarding its effect on the market. The Chinese threat for retaliatory tariffs was also accompanied by the threat by the Chinese to impose martial law in Hong Kong. Was it one or the other, or both? Let's stay out of that rabbit hole and look in the rest of this report for other technical items that may have influenced our market stance.

https://stockcharts....nical-a-47.html

cad3b021-2c30-4b8b-8831-f2b4fff8bec9.jpg

In some cases technical analysis can help us anticipate reactions to scheduled events. For example, the Fed announcement was long-anticipated, and you'll note on the chart above that a rising wedge formation appeared in advance of that event -- the final top forming on Monday. A rising wedge is a bearish formation, so we could anticipate that the reaction to the announcement would probably be negative, but there was no clue as to the magnitude of the reaction.

There was no advance warning of the president's proposal of new tariffs on Chinese, so there was no way to anticipate Thursday's decline, even though in hindsight the decline was not a surprise, given the news.

The last item of news I cited is more ambiguous regarding its effect on the market. The Chinese threat for retaliatory tariffs was also accompanied by the threat by the Chinese to impose martial law in Hong Kong. Was it one or the other, or both? Let's stay out of that rabbit hole and look in the rest of this report for other technical items that may have influenced our market stance.



#9 dTraderB

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Posted 03 August 2019 - 03:00 PM

GMM:

 

A Short Stay At The Bear Trap Inn

 

The S&P must then hold the 2867-2889 level, which is huge support coinciding with the first Fibo and 200-day moving average, respectively.   We think that is where the index is heading over the next week probably after some strum und drang after tomorrow’s employment report.  — GMM,  August 1st

The talking head traders are way too bullish.  Not even thinking about a tradeable bounce until the 200-day, then will only keep it on a very tight leash.

https://global-macro...-bear-trap-inn/



#10 dTraderB

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Posted 03 August 2019 - 03:02 PM

Vance Harwood @6_Figure_Invest
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The VIX futures term structure as shown on http://vixcentral.com  (using the "wide" setting" ) is very flat and closing $VIX value is right on top of it. That's unusual, typically this close to backwardation $VIX is well above VIX futures prices. Seems that VIX is underreacting.

EA_xqAeVAAAgFVV.png
2:54 PM - 2 Aug 2019