There we go, the support at the trough has just broken.
Now, look for a long red candle, that then gives up ground and leaves a shadow below it.
If this doesn't happen somewhere above 1740 on the ES, we could be looking at a trend change.
Deflationary aromas in the air!
look at bonds and pm's getting crushed, and stocks following suit.
Yep, those who bought the dip.....enjoy your new purchase!
You've had a great run, so getting burned here, if it happens, no big deal.
However, if we get a major correction, this time it could be years to reverse....
QE was the last bullet.
Not the wrong logic, for the past five years.
However, what if the market decides time is up for QE the wonder drug?
Just a thought, but so far this morning, the market doesn't seem impressed.
Well, it looks like we get another one today (beware the head fakes, though).
After five years of intense QE, we still get lousy data. So, if the data is accurate, one would think QE is not the answer to the problems in this economy.
Of course, the data is questionable, and seems to be form fitted to whatever it is the central bankers would like to do going forward.
Naturally, the market is going to front run the FED's next move, and not the actual economy. Remember the economy? It's that quaint almost forgotten thing that used to be a major driver of stock prices.
This morning's data was a mixed bag, and it's anyone's guess as to how genuine it was.
We're to believe Nov. beat Oct., but lower than Oct. ex-auto's (with the kick off to Christmas shopping happening in Nov?),
And that claims have jumped up 68,000 (at a time of year when the numbers are usually "better" due to seasonal hiring?).
No doubt we could see the bounce to ES 1794 today, it looks like the FED does not want to commit to a taper at the next meeting, imho.
Good morning, nice to see you here, pandorabelle.
Don't forget, the theft isn't complete until shares are sold at a loss!
First, they draw in the most 401K money they can, as investors feel assured that the market is "strong."
Then out of the blue, you start to see deterioration, but it's probably "just another pull back."
Then it's more bad news, and investors think, "well, we were due for a correction, probably a good place to buy more."
Then it's the big one, and 401K money in the pic-nic baskets ends up at Yogi and Boo Boo's place.
And of course, Yogi and Boo Boo are the same one's behind all the scams, including the QE grift.
The big banks can use their balance sheets to go short as well as long, and they control the media.
If we do get a bounce, I expect a standard 50% retrace, which would put ES right around 1794. This would set up a classic complex head and shoulders top, the "two headed monster".
If this support area breaks, that's great news for bears, but look out for a long red candle that gives up ground resulting in a long shadow down below....this has been the signal to buy on every single previous potential top this year.
I was somewhat stunned that we didn't get one yesterday, but then again, support hasn't broken yet, either.
Technically, the argument for a potential top is stronger here than on the previous examples by far.
Given market behavior this year, I'm inclined to agree with you.
However, technically, this is the most encouraging we've had all year for bears.
We all know that the market is somewhat of a "rigged casino", and it could be the guys running the casino want at least a decent pull back if not something more.
The rules of TA are programmed into the bots. The swing trap is a legal maneuver for the casino owners. Beware, at this point the players have been conditioned to look for a swing trap here yet again, and a wave of buying could come in here before breaking support.
Let's look at the 5 hour chart and get a "close up" of the recent high to trough, to second peak (ever so slightly lower than the first), and subsequent down move that accelerated yesterday.
On the one hand we're sitting near that support, with a bounce just starting, and that could run hard to the upside.
On the other hand, when you look at the move from the second peak to yesterday's lows, it's the strongest down move from any potential top this year. (Not the deepest, yet, but the bears clearly took control recently).
It shows that supply of shares is showing up from the ES highs of 1812 ish, all the way down to where we now are.
Being the forward looking mechanism that it is, the market could see the current level as still being an excellent place to lock in gains, which means more supply could be showing up in the coming weeks.
It would likely be difficult for bulls to push this back to new highs with the quickness and ease we've seen on the other four occasions......this latest down move shows heavy resistance with pretty good volume.
Correction: if you see this potential top as a head and shoulders, the second shoulder is higher than the first, but just a whisker lower than the head, so could be seen as a double top rather than a head and shoulders setting up. There also is the potential for a complex head and shoulders, the "two headed monster".
We've seen the swing trap four times so far this year.
The swing trap occurs when it looks like a major top could be in place, with a break out to the downside, that soon reverses course and soon a new high is in.
There was the May swing trap that ended in late June. The next was the August swing trap that ended in early September.
The following new high was just barely in place, when we saw the late September swing trap that ended when they made the "no taper" announcement in October.
The fourth one was quick, in late Oct. and early Nov. it looked like we had a double top in place, and support was broken, and it didn't take long for the down move to get reversed and sent roaring up to a new high, and there we got a pull back briefly, followed by another new high, and the current all time high.
The new high setting up swing trap #4, and the subsequent new high, set up what looks like a left shoulder of a potential top.
This potential top could be viewed as an M shaped double top or a head and shoulders, with the second shoulder being just a whisker lower than the first.
In either case, we're sitting right at the break out zone, as anyone who studies TA will tell you. The break out of current support sets up nicely with the previous "double top", as we often see on charts where new support comes in at previous resistance.
This is the third test of this level, with a "classic looking" top in place.
If this is going to be like the last four occasions, look for a break of this level (i've got it at the 1775.40-1781.50 area on the ES), and reverse before getting to 1740 on the ES.
Clearing 1740 to the downside on the ES could trigger a genuine correction.
I think, if they do taper, they will leave the door open "to ensure demand for U.S. treasuries."
In other words they will still be the buyer of last resort up to the point needed to keep the treasury solvent.
It's QE that matters.
Could be the market thinks QE has failed?
more QE is more failure.
No QE and back to reality....and that too is much, much lower stock prices from here.
Something changed recently, don't you think?
Daily chart says no trend change yet, but just a whisker away.