Page menu

Tuesday, August 13, 2019

Market Update 8/13/2019 - Technical Tuesday

The 1 min $SPX chart in my Public charts area continues to break down, and the $VIX is trading above 20 again, so this morning I decided to retrace our footsteps, and figure out where I went wrong.

Always trust the charts; "never argue with the charts", because the charts are never wrong. 

First let's review last weeks market action: 

Last week we got a nice short squeeze back to the 2938 level - just above the 50 day ma. The following day the 50 day ma broke, and by the end of the day it had bounce back to a lower high.

I may have been stressed out on Friday, but I was well enough aware of the fact that the 50 day moving average was going to break, as soon as the market opened, but I didn't think much of the bearish back-test of that average, going into the close. I had my mind on other things, but in hindsight I wasn't bearish enough.

There was a rush for the exits, going into Friday's close, followed by images of teargas being fired at  protesters inside the worlds 3rd largest Airport, in Hong Kong, and a Goldman Sachs report of an "increased chance of a recession", and of course the same old "China tensions" story. Looks like another orchestrated sell-off.  

My forecast was for the market to "pause", and this is more of a pullback than a "pause". I didn't expect the bullish channel to break, and I didn't expect the $VIX to break out above 20 again, on such low volume, on a Monday in August, but as it turns out there was something I missed!

Getting back to the 1 min chart, and Fridays snap-back rally

$SPX -  First thing I did was to draw up a new 1 min chart, which ended up looking about the same as the one in my public charts area.  

See the lower high at the top of the channel (in blue), where the question market is? Now compare that lower high, to the higher high on the 1 min DOW chart below.

$INDU   - Dow actually made a higher high, completing wave 5!

To make a long story short: the lower high on the $SPX is called, "a truncted 5th". This is where wave 5 makes a lower high than wave 3. It's kind of rare, but shit happens.

 I think this is when Goldman Sachs is really up to; setting the bear trap.

I'm sick of hearing about China fears, and everyone is too damn bearish, on old news.

Look, there ain't gonna be no China deal, and even when there is one, the Chinese are likely gong to break it.   

This update ran past the opening bell, and lookie there! The $VIX broke down, and we're already retesting the revent highs.

Maybe the market can hold up into OPEX, but I'm not sure it can break out above 2060, in fact I'm pretty sure it can't.  

I got charts to update, so gotta go. Watch the Public Charts area for up to the minute technical charts 

Until next time, good luck Traders,

No comments:

Post a Comment