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And so the market started fading on leap day…
On the 1st SPY made a lower high at 137.99 vs the previous day's 138.19.
This much was enough the kick in a downtrend.
ES_H made an almost equal high, shy by only 25 cents vs the leap's 1377.25.
We were closing in on the uptrend line rapidly and ended Friday in a triangle, with the first close below the red trendline.
The triangle being a continuation pattern, the downside was in favor.
I posted this image Sunday night:
As I was reviewing my charts and the financial news this weekend, I came across Mish's article:
Another Plunge in 3-Month Rolling Average of Petroleum and Gasoline Usage
He states, "Note that petroleum usage is back to December 1995 thru February 1996 levels. Gasoline usage is back to December 2001 thru February 2002 levels."
Bizarre as it may sound, this is what happened in the stock market last week. Like a dog chasing the tail and going round and round. When the index fell in the 1st part of week, remaining bears started making noise. ZH was painting the town red with the news of coming Eurocalypse. And I was telling readers to wait and not to front run. I said repeatedly that trend change is not confirmed and whipsaw is expected. Technically the market was oversold to start with. Again, as absurd it may sound that while the prices were making higher high, the market was oversold, it was true. How can we expect a decent sell-off in such a situation? And not to forget, the cycles were showing a top due by March 6-9. Last I said, may be Friday, March 9 will be the fade date.
