If you want to see a day where technical patterns repeatedly breakdown and fail, then today is your day. It's been a while since I've seen breakdowns bounce hard into their range right after the break, or the same with break outs. These are false breakouts and breakdowns and they snare even the most experienced technicians. The only way to protect yourself is to recognize that a pattern is failing and get out.
Around 11:20AM, we broke out but formed a slight head-and-shoulders and broke down at around 12:10PM, but rallied back up to break out from a small consolidation zone. Then, we failed to follow through and we broke down at around 1:40PM but found near-term secondary support at 860 and rallied back into consolidation to breakout one more time at around 2:10PM. We formed a flag which bounced off of initial support and broke out, turning parabolic intra-day...only to fail again and create the massive neutral trading range. In the last 10 minutes, we happened to slightly breakdown out of this range.
If you ask me, today was NOT a tradeable day. So many mental stops on trades in my day trading segment got hit that I now have a pulsing headache and am taking Acetaminophen. Where's the morphine when you need it?
What's interesting is that all of this (including the headache) fits into the Sentiment Cycle. We are in the stage of despair. While you're at it, you can also read my August 28 article on the Guide to Bear Markets.
Around 11:20AM, we broke out but formed a slight head-and-shoulders and broke down at around 12:10PM, but rallied back up to break out from a small consolidation zone. Then, we failed to follow through and we broke down at around 1:40PM but found near-term secondary support at 860 and rallied back into consolidation to breakout one more time at around 2:10PM. We formed a flag which bounced off of initial support and broke out, turning parabolic intra-day...only to fail again and create the massive neutral trading range. In the last 10 minutes, we happened to slightly breakdown out of this range.
If you ask me, today was NOT a tradeable day. So many mental stops on trades in my day trading segment got hit that I now have a pulsing headache and am taking Acetaminophen. Where's the morphine when you need it?
What's interesting is that all of this (including the headache) fits into the Sentiment Cycle. We are in the stage of despair. While you're at it, you can also read my August 28 article on the Guide to Bear Markets.
S&P 500 (SPX) 1-day
S&P 500 (SPX) 10-Day
S&P 500 (SPX) 3-DayThe Bigger Picture:
4 comments:
Hi John,
Tough day... great wrap description.
What are your thoughts on our location in this bear?
Great work... thanks for sharing.
Steve
Hi John,
may I ask you, which sites do you use for this detail charts of SPX?
Thanks!
Vlado.
Hey Vlado,
It should be http://www.stockcharts.com/. John actually have some recommendation if you scroll down and look at the left side of his blog. There are lots of other useful links, you won't be disappointed.
Tradermarketinfo~
it's tough to tell where we are because all bear markets are different. However, I am closely monitoring how similar we are with the 1929 and 1987 crashes.
That's right. Stockcharts.com is my fav. The details are from my own hand.
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