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Friday, August 25, 2023

Looking at Yesterdays Bearish Engulfing Pattern

 Looks like Wall Street took my lead - to raise some cash - ahead of Jackson Hole. See yesterday's update.

Looking at Yesterdays Bearish Engulfing Pattern

A bearish engulfing pattern produces the strongest signal when it appears at the end of an uptrend. The pattern is created by interpreting the data of two completed candles - 

You should already know; yesterday's 1 day reversal, did not occur at the end of an uptrend, and doesn't even qualify as a bearish engulfing pattern, but this is the kind of nonsense you see the trolls peddling on Twitter.  

 The market was sold at resistance, at the 50 day moving average; exactly what we were watching at yesterday's open. 

That was one hell-of-a one day reversal, but I'm still only looking for a pullback, in most markets. 

$SPX - daily candlestick chart - 50 day moving average was sold out of the gate. 

$NYFANG (for example) - I obviously haven't updated this chart for a while but - same thing - sold at the 50 day ma.  

Same goes for the Nasdaq, and the $NDX; the technicals could not be clearer.

But you also had a Fibonacci target on the Tech chart being sold 

I alerted to all this in my Twitter feed around 9:30AM CST 
You can also find clear resistance on the NASDAQ, if you know where to look,
and the Russell 2000 continues to whipsaw in a range. That's the wave b pullback I blogged about yesterday. 

Thankfully I had already sold tech... as I mentioned in yesterday's blog.

Funny, all the networks claim to know something about technicals, yet I never once saw anyone point to the obvious sell signal. Perhaps they were too busy searching the internet for Trump's mugshot? 

That's the mass distraction lame stream media for you! 

Here's my take on yesterday's sell-off 

Some hedge funds returned from their summer break early, in order to try to shake the weak hands, on light summer volume, because they don't want to be forced to chase a summer rally. 

Who else would be taking retail down, only a few months ahead of the holiday shopping season? 

Eventually these hedge funds will be forced to put money to work, and probably sooner, rather than later.    

Yesterday's shakeout looks like a bear raid, based on ridiculously obvious sell signals, just ahead of Q3 window dressing. This is business as usual, on Wall Street.

I was hoping to move to cash ahead of my vacation which begins at today's market close, and probably won't end until the week after Labor Day, but when opportunity comes knocking, money has to be put to work. 

I caught a nice rip in Natural Gas yesterday, and I see Oil up this morning. 


Looks like Goldman Sachs is short Asia/China according to their latest press release downgrade.

Goldman Cuts China Stock Targets on Renewed Property Concerns 

There's usually a trade somewhere, whether it be in Oil, Energy Equities, Tech Stocks, crypto, or whatever the latest craze is. You just have to know where to look.

Jackson Hole: Will Powell crush the  AI rally? After all Stock Market bubbles tend to fuel inflation. 

Don't count on it. Money has to go somewhere, and since it's not going into the housing market, it's most likely going to be put to work in equities.  

Take Care, AA 


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