After I did my Whole Foods Bear Market post late last month, I started hunting around for other interesting parallels: that is, stocks which had topped out around 2006-2007 and then went into a complete, utter, and stunning free-fall. The additional requirement, of course, was that they be exhibiting a topping pattern as of right now. My thesis is that these are sample “canaries in the coal mine” which illustrate far better than the insanely-manipulated /ES market how unhealthy equities are.
First is Pier One, that purveyor of throw pillows, scented candles, and coconut monkey dolls:
(Note from Tim: just about the only person I’m in contact with throughout any given trading day is Northman Trader, who was kind enough to share the post below. Click on any of the images for a big version. I’d like to add that Northman tends to be much more evenly-balanced than I am, and he isn’t running around beating the bear drum constantly like me, so take that into account when reading this:)
We’ve been bullish from a trading perspective this week and it has worked out great, but we are chartists and what we are seeing is concerning. We’ve talked about structural macro charts for a while and they have teased us along the way with magic saves month after month. But since they are monthly and quarterly charts one has to recognize that the math is straightforward and its clinical results are showing one startling conclusion for bulls: Utter Doom.
We have been using the Tinder Box theme in NFTRH lately. As in, stock market sentiment is so bleak, so depressed as to be a Tinder Box with the elements to ignite a flame that bounces the market, to clear the over bearishness at least.
We have successfully followed a plan every step of the way… 1. down from the August breakdown, 2. up on the bounce to SPX 1975 or 2040 (hit 2020) and now 3. down to a test of the October 2014 / August 2015 lows, which is a decision point between a bounce or an entry into a bear market (by making a lower low to October 2014).
And here, my friends, I present to you some of the very worst of America: sorority girls.
Vapid. Vain. Vacuous. And always taking selfies. Just drink in some of this and comprehend the blinkered Philistine pig-ignorance that is before you. All hail duck lips! Honestly. Watch this. Take a good, long look. It’s appalling on multiple levels.
rejoinder, of course, comes from Star Trek (since, in spite of my boyish good looks, I am a dork at heart).
Here’s today’s swing-trading watch-list:
Long Netflix (NFLX)
Bulls had a weak start but recovered strongly yesterday. That set up a rising channel that on the bigger picture is likely to be a bear flag. I was carefully considering upside resistance levels within that flag but the NFP number was bad, and it seems likely that the bear flags of various kinds on the various equity indices are likely to break down this morning. Scan 3x 60min SPX INDU TRAN charts: