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My largest short heading into the day was EEM. In spite of yet another ridiculous mini-rally this morning, things are once again falling to pieces. As the daily chart shows, the repetition of buying-based-on-unicorn-farts followed by a stall (tinted thrice) and then a plunge-based-on-reality is getting a little predictable.
I was explaining yesterday why I think that the current move on SPX is just a rally within a downtrend that has not yet bottomed out. That means that I am watching the significant resistance levels above in the expectation that one of those will be a brick wall at which SPX will reverse into the next move down. Yesterday the rally closed at 1830, on the weekly middle band that broke on Friday and is significant short term resistance. It may be that the rally will stall there, though we might also see a break over that resistance and then a return to close back on or underneath it by the close this week. SPX weekly chart:
I’ve got one of those “personal tale” anecdotes in the hopper that people seem especially fond of reading, but I think I’ll leave it for another day. For now, I’ll just wrap up my day with the chart of the ES, which as I’m typing this is up an immaterial half a point. If the trading gods are reading this, it would make things a lot easier on us chartists if prices stayed beneath the tinted pattern. If they do, the clean target appears to be 1772. Inflation data roles out tomorrow an hour before the opening bell, so that should get things moving (hopefully: down). G’nite!
Just a friendly reminder to get up really early in the morning to watch the first of four “blood” eclipses. A quartet of these is quite rare. I read that there was over a 300 year stretch where no such event took place. There are plenty of stories about how these eclipses signal the end times; for me, I’d be happy if we could just continue that nice waterfall sinkage that was so fun last week.
The US stock market is negative pre-open, but don’t be surprised if we get a strong bounce soon. It could be a trade-able bounce. I have bought a couple items in anticipation and am watching several more.
A bounce is a bounce; a trade. It is what happens on a would-be bounce that will be important going forward. What will the market do at resistance? That will tell us a lot about what this thus far mini correction will be, another quickie or something more lasting.
SPX has firm support at around 1800. (more…)
