3 replies to this topic

[Douglas]

According to my risk summation system, the days this coming week with the highest risk of seeing a turn in or acceleration of the current trend in the DJIA are Thursday March 13th and Friday the 14th.  

 

Last Tuesday in the risk window the expanding triangle I noted in the DJIA short term plot shown below was finally broken to the downside, but formed yet another expanding triangle.  Much like in the previous week-wide risk window, the DJIA just swung violently up and down this past week trending down as predicted by the triangle break-out direction.  I suppose the boundaries or a break of the new blue triangle will determine the DJIA direction over the next week or so.  

 

 

The selling in the DJIA stayed pretty subdued all week with none of the downside targets that I noted in last week's post hit, not even the 200 SMA.  The SPX made it to the 200 SMA, so I guess that sort of counts.   As others at this site have noted, sentiment is getting pessimistic enough to call for a bounce, but I won't get too bulled-up just yet.  See what happened in 2008 and 2022 below where sentiment was this bearish.  The DJIA bounced but then in relatively short order it turned tail and headed lower.  Sentiment may set the mood, but something else is needed to seal the deal if the bear is prowling these parts.    

 

 

Regards,

Douglas

 

  

 

 

[Douglas]

My current EWave count shown below expects the DJIA to move higher in pretty short order to form a "b" wave of a larger wave "(4)".  The ensuing "(5)th" wave may or may not make a new high.  Of course given my feeble EWave skills and bum luck, this count probably won't survive Monday, but hey, you got to have an plan, wrong, right or otherwise, until the market hits you in the nose (bad misquote of Mike Tyson). 

 

 

Regards,

Douglas

[Douglas]

The futures are heading sharply lower tonight.  If the DJIA keeps heading down, it's going to mess up my EWave count above before the ink is even dry.  To prevent this from happening,  I've decided to go ahead and publish the next crash risk window dates.  Every time I publish one of these cotton picking crash risk windows, the market heads higher just to make me look foolish.  So as a preventative measure, the next crash risk window is the week of March 24th.  There, that should do it.  I expect the DJIA  futures to turn around and head higher now for sure.

 

Regards,

Douglas

[Douglas]

Well, that didn't work.  Unbelievably the "bullish" EWave count above survived today, but only by about 27 DOW points.  Way to close to have any confidence that it's not worthless.  My bearish alternative count is chomping at the bit to pull the wagon, but I suppose that I should wait till the bullish count is officially dead to have its funeral.

 

Today did have a "0" reading in the risk summation which is unusual and has coincided with lows occasionally in the past which could just means that I simply did a lousy job of interpreting the risk summation data which is cold comfort, but better than the alternative that today was not a turn and the low lies out at the end of this week probably a whole lot lower. 

 

On the plus side there were a lot of green ticker symbols on the S&P screen today considering the DJIA was down 890 points which means maybe rotation instead of throwing out babies with the bath water.  Although that also means that today was not a true capitulation day since capitulators gripped with fear don't rotate into lower risk stocks, they just cower in the bond bunker.  

 

Regards,

Douglas