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This week was a bit frustrating, to say the least. Given the price action leading up to this week I thought the diehard bulls had breathed their last breath and we can get on with the show. But alas, the bulls are still gasping for air and clinging to this 200 week EMA which served to kill a lot of short term bears and churn the hell out of their accounts. But all is not lost.
I love the smell of bull flesh in the evening.
As you can see below, the oh-so-2017 app company Snap is getting destroyed after hours, now having lost over 90% of its value from just last September. What a train wreck!
Last Friday there was a clear break back below the 5dma, and that was a fix under the Three Day Rule. On this rule SPX should retest the last low at 3491.58 before any retest of the prior high at 3806.91. I haven’t counted but there have been nine previous fixes in 2022 and I’d be surprised if this rule hasn’t fixed well over 100 times since the start of 2007 and on the current rules for this, after a small tweak in 2019, there has not yet been a failure, although there have been two marginal higher lows when triangles were forming at the lows.
I have mentioned that there is no such thing as a perfect market stat, and that I would therefore expect to see a fail on this stat at some point, but there’s no particular reason to think that would be here. I have been asked this week what I would expect to see if it does fail here but, as that hasn’t happened before, I have no idea, though it would open the next possible resistance level in the 3900 area.
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