Do not fight the Fed Market is setting up to crash
There a millions of market viewpoints. The nice thing about tradingview is that for the most part the viewpoints are technical in nature.
Put simply the technical viewpoint I want to show in the chart here is that the nasdaq composite is under heavy selling pressure. We had a rebound today January 10th, 2022, but it was nothing more than an intraday rebound. The weight of the evidence still points to down market and accelerating down.
The narrative too often even from technicians is that the market will bounce, is due for a bounce, will bounce make a new high first, finds support etc etc.
Well guess what, sometimes the market does not bounce that much or even find much support. Sometimes it falls really hard and *drops like a ROCK*. Sometimes it just goes down and *stays down*. Sometimes it will go down 5 limit down days in a row without barely a bid.
So the chart pretty much says it all. If we view the peak in the Nas composite as November 22, 2021 then we count the number of days until we reach last support and then peak selling climax. The current nasdaq time frame is *barely* holding onto support. Today's one day reversal candle was not a victory, just an intermission.
The key aspect of the overall chart is the *Final Rally* that occurred in December 20th, 2021 to December 28th 2021. That rally was a suckers rally and was orchestrated so that the big money can sell and sell really hard. That same final suckers rally also occurred in 1987. It gave the appearance to most market participants that the market was setting up for another new high, new bull trend, new rally and all is well. And yet those dreams were dashed, and then came the rapid bearish engulfing with a speed and force that most are not prepared for. The SPEED of the price action down is what causes most people to not be able to react quickly enough and get out in one piece.
I certainly do not wish a decline as severe as 1987 but we just have to look at the technical price structure and make an honest assessment and take it from there....
Put simply the technical viewpoint I want to show in the chart here is that the nasdaq composite is under heavy selling pressure. We had a rebound today January 10th, 2022, but it was nothing more than an intraday rebound. The weight of the evidence still points to down market and accelerating down.
The narrative too often even from technicians is that the market will bounce, is due for a bounce, will bounce make a new high first, finds support etc etc.
Well guess what, sometimes the market does not bounce that much or even find much support. Sometimes it falls really hard and *drops like a ROCK*. Sometimes it just goes down and *stays down*. Sometimes it will go down 5 limit down days in a row without barely a bid.
So the chart pretty much says it all. If we view the peak in the Nas composite as November 22, 2021 then we count the number of days until we reach last support and then peak selling climax. The current nasdaq time frame is *barely* holding onto support. Today's one day reversal candle was not a victory, just an intermission.
The key aspect of the overall chart is the *Final Rally* that occurred in December 20th, 2021 to December 28th 2021. That rally was a suckers rally and was orchestrated so that the big money can sell and sell really hard. That same final suckers rally also occurred in 1987. It gave the appearance to most market participants that the market was setting up for another new high, new bull trend, new rally and all is well. And yet those dreams were dashed, and then came the rapid bearish engulfing with a speed and force that most are not prepared for. The SPEED of the price action down is what causes most people to not be able to react quickly enough and get out in one piece.
I certainly do not wish a decline as severe as 1987 but we just have to look at the technical price structure and make an honest assessment and take it from there....
Comment:
Ok so we had a 3 day really... bear market rallies are usually in 3's (3 days)
We see that in 1987 the DJIA and spx did have an aggressive rally before the mega plunge.
The most bearish possible signal I can think of for today is that the price bar moves already all the way down to 14530 or slightly below on Nasdaq. That would be a full bearish engulfing and very ominous...
but I have to admit that based on how slow the market is, it seems extremely unlikely to happen.
Mercury retrograde is 6:30am tomorrow Eastern time.
People keep buying the dips because they are trained to buy the dips
we need to get closes under 14915 before end of day today to say we have opened a real trap door for tomorrow
We see that in 1987 the DJIA and spx did have an aggressive rally before the mega plunge.
The most bearish possible signal I can think of for today is that the price bar moves already all the way down to 14530 or slightly below on Nasdaq. That would be a full bearish engulfing and very ominous...
but I have to admit that based on how slow the market is, it seems extremely unlikely to happen.
Mercury retrograde is 6:30am tomorrow Eastern time.
People keep buying the dips because they are trained to buy the dips
we need to get closes under 14915 before end of day today to say we have opened a real trap door for tomorrow
Comment:
This is not an accurate .618 retrace in the SPY but close enough... lols
key danger extension is TOMORROW and into next week !!
key danger extension is TOMORROW and into next week !!
Comment:
Update traders !!!! we are hitting the key danger levels I mentioned in the Nasdaq !!!
Extreme crash caution advised!!!
Extreme crash caution advised!!!
Comment:
I feel like this is the week that we need to rally or bust. This is the week that could be a waterfall down.
This is somewhat complicated by the fact that AAPL earnings are not until Jan 27th or about 10 trading days away. AAPL is not the entire market but it is definitely one that can move tech in a clear direction.
Armstrongeconomics has this week as a panic cycle week. We are also still within 3 days of the mercury retrograde of last Friday.
Also the bond market TLT looks very week and at risk of a crack down, or really bad crack down which could destroy tech stocks (rapidly spiking rates)
Wasn't that what cracked the market in 1929 ? the bond market COLLAPSED and it pushed the stock market over the edge.
We also have a hindenburg omen sell signal (some of them only lead to sideways or only consolidations, but still )
This is somewhat complicated by the fact that AAPL earnings are not until Jan 27th or about 10 trading days away. AAPL is not the entire market but it is definitely one that can move tech in a clear direction.
Armstrongeconomics has this week as a panic cycle week. We are also still within 3 days of the mercury retrograde of last Friday.
Also the bond market TLT looks very week and at risk of a crack down, or really bad crack down which could destroy tech stocks (rapidly spiking rates)
Wasn't that what cracked the market in 1929 ? the bond market COLLAPSED and it pushed the stock market over the edge.
We also have a hindenburg omen sell signal (some of them only lead to sideways or only consolidations, but still )
Comment:
It looks like the epicenter of the crash will start on Monday next week. I think we only have 1 to 3 days left in this crash. RSI is at 30 level on multiple indices.
*REMEMBER* the WORST part of the stock market crash is when we get price action with RSI less than or equal to 30 level
*REMEMBER* the WORST part of the stock market crash is when we get price action with RSI less than or equal to 30 level
Comment:
we are look at possibly 10 to 25% drop by next week. Look for a HUGE red bar down that closes at its lows
Comment:
Maybe a final update on this idea... I moved to 100% cash here. RSI hit near 20 on several indices.... Seems a bit greedy to be expecting RSI to get to 10 or 11 as was the case in 1987 crash....
So perhaps best approach is only day trade from here try to play few swings.
The fed meeting seems to be the forward looking event that could lead to a massive bounce up from these oversold zones.
So perhaps best approach is only day trade from here try to play few swings.
The fed meeting seems to be the forward looking event that could lead to a massive bounce up from these oversold zones.
Comment:
I just went short again and long volatility
The market cannot get a big rally going and this looks like a bear pennant. Look for a big capitulation dump today and early next week. This could be the big one.
The market cannot get a big rally going and this looks like a bear pennant. Look for a big capitulation dump today and early next week. This could be the big one.
October 16th, 1987 at 12:46 PM Eastern time (New York) we see that Mercury Retrograde begins. That was a Friday at that time and date. if you look at the chart October 16th, was the kick start red bar that was quite severe. Not to say that the previous bars were not severe or down, just not as scary. The 16th red bar was scary AND it was on a FRIDAY.
Present time frame in 2022
THIS FRIDAY
January 14th, THIS FRIDAY at 6:41 AM Eastern New York time is Mercury Retrograde.
So here is the point. Today is only Monday, there are 4 days left in this week. Based on the historical similarity and the Mercury Retrograde similarity perhaps we expect more down price action leading to huge acceleration by this Friday? and then a Monday next week collapse, or 'sometime' next week collapse.
I am no astro expert, but I know enough that the market action around some aspects can get very dicey.