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Tuesday, August 16, 2022

Market Update 8/16/22 - Trading Into The Danger Zone

Yesterday, we saw the 200 day moving average - on the DOW tested, but like I told you last week, the market is getting extremely overbought, and these bear market rallies, typically only last a few weeks. 

This is why I told traders to sell yesterday's even number target:

 And I'd add to shorts if we see the 4400 target taken out, as I pointed out in yesterday's update  

$INDU - trades to overbought - above my red line - as it's driven to the 200 day ma in a panic. This is panic buying, because not only do you have retail short sellers capitulating, but you have the market engineers rushing the target, and taking advantage of a mutual fund Monday, and that's a good opportunity for the pros to help drive the market to their moving average targets, and take profits.      

Here's another view of the same thing

Checking the Wave Count

Now, I was under the impression, that this is a wave D rally, which is typically more complicated than this - as you can see my sub-wave labelled "(W)" of wave D, and I anticipated that it would take several months to complete, but this move actually counts more like a wave (2), suckers rally.   

To help explain, I'll illustrate the same pattern on the Wilshire 5000 $WLSH chart. 

 Wilshire 5000 $WLSH - trades into the same pattern I predicted back in June - a down-turned expanding triangle, or as most traders would call it, "a down-turned megaphone". 

And after being correct on a difficult call like that, I'm going to continue to mention it, every chance I get, but even though it looks like I was right all along, it's important to try to confirm the pattern, on several different charts, track the $VIX, look for alternative patterns, and keep an eye on the calendar. 

The longer I do this the more I realize, watching the corporate owned news agencies is not so important, unless it's in order to use them as a contrarian indicator. or instance: The lame stream media continues to talk about a "soft landing", just as they did in 2007, just before the market crashed. That's a contrarian indicator. 

Using the MSM as a contrarian indicator 

Yesterday: The lame stream media was reporting yesterday, that China did a surprise rate cut, and the idiots at Bloomberg were left asking, "why isn't the market pricing in risk"?

1. China has been in a bear market since 2020, and even as global equities continue to rally, China continues to sell off. 

2. News is priced in months/ years, ahead of time. Don't believe me? When was gold breaking out, and making new all time highs? Back when the inflation story was being priced in, back in 2019-2020. As I've always said, covid was only an excuse for more bailout world policy. They knew they were going to have to do massive cash injections back in 2019, when the broader market traded into a headfake wave B. The only reason they continue to push vaccines is because this keeps populations confused. 

Google search vaccine/ vaccinate, and you'll get plenty of results, that don't even mention "flu season".   

3. Yesterday I heard @TheChartress (Abigail Doolittle)  on Bloomberg talking down oil yesterday. I assume this is to try to help with that, "soft landing" story, and commodities have been crushed.... but believe me, she knows nothing about timing oil markets. She's gets placed in the same contrarian indicator camp, as that nitwit Jim Cramer. As far as I have been able to ascertain, neither one of these loons has any technical skill, and this is why you'll see Bloomberg, and CNBC, will occasionally have real traders on.  

Adding these 2 idiots to the Wall of Shame

 Getting back to the Wave Count 

What if this is wave 2, after all? 

In the case of the above "what'-if"'; if it is wave 3, then it will look like 3000 point drops on the dow, all over again, and it will only get worse from there. If, instead we only see a mild pullback to higher lows, that's going to rule out a wave 3 crash. It's going to be another easy call. 

 What's the catalyst for a wave 3 crash? 

There are so many bad things happening right now, that it would take hours to blog on it, but you can feel it in the air, as Tucker was reporting, just last night. 

He also reported a nightmarish situation that's unfolding right now, and that is that children are being encouraged to switch genders, with the help of illegal black market pharmaceutical drugs.

This isn't conjecture. I see it happening, on the streets of Chicago, and it has grave consequences for society, and humanity. This situation also explains why young people are not competing for available jobs. 

Scary times are coming, 
take care, 


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