no dennis- the decline didn't have anything to do with fears over china- that was simply the reason given out by the media! the decline was a technical and fundamental based move- like all price moves are! technical for swks was:
it got a gap closed at $73s AND it did a golden ratio retracement of 61.8% (fib) level to EXACTLY the $70s. there's still an unclosed gap at $69s- & THAT might be the bottom that gets put in, in oct.
& here's the "fundamental" reason for the decline:
the "catalyst" to take swks (& the markets) where they needed to go (as in, reason given out by the media as to why the markets are declining) could have been ANYTHING- it could have been war breaks out in the middle east, it could have been terrorist attack on the u.s., it could have been plague breaks out in the u.s., it could have been eurozone breaking up- it just happened to be china that was "used" as the "excuse" to sell off the markets- BUT the reason the markets sold off was because they had gone up by a VERY large amount since 2011 AND had not had a 10% decline since that time- as well as MANY stocks having risen by 100s of % in the past year- swks included- as well as the shiller ratio being at 25% as well as the p/e for the spx being higher than the normative avg- so because of these kind of things- plus that kind of % rise in MANY stocks- the markets HAD to decline in order to get the rise more in line with "rationality" & normative % increases based on year over year inclines. THAT'S the real reason for why the markets declined! it wasn't about any china news- it was based on technicals AND fundamentals working together- like they always do! :)
i know u won't believe me dennis- but this kind of thing was told to me in 2011 by a trader who'd been trading for over 30 years- & he told me the markets don't move based on "news"- as news is just noise! the charts will tell you where the markets will be going- so just watch the charts AND pay attention to seasonality he told me! ;)
dennis- i'm not fearful in the least!! having huge declines like these are great for buying at bottoms!! so, no, i'm not at all fearful! i was simply responding to your sentiment theory you had put forth in your post.
as for revisiting the lows as we get closer to the sept meeting:
no, the market at that time should be close to being at its top recovery price off the interim bottom we just had at 1867- the market should not be at a low price around then of going into the rate decision in sept. it is around then that the market should start to sell off again going into october- and in october is when the final low will be put in.
this means that my "guess" is that the fed will hike rates in sept and that will be the "catalyst" needed to start the decline again into october.
there always needs to be a catalyst for the markets to do what the chart is telling ahead of time what the markets are going to do- and so, that's why my "guess" is that it will be a hike in sept. then in oct, the "reason" given for the up move will be something like: "hey, a 25 basis point hike isn't all THAT bad - "AND" - it means our economy is strong and doing well- so, UP we go then from there!". ;)
dennis- i remember someone on this board in july saying the exact same thing as you just did- but it was with respect to the 10% decline that "EVERYONE" out there was expecting and/ or talking about! someone on here wrote that they took that as a contrarian indicator which meant the market would NOT be doing the 10% decline after all- because EVERYONE out there was expecting it! YET, despite "EVERYONE" out there discussing/expecting that kind of decline, the decline still happened!
moral of this is that sometimes the herd is just right- regardless of whether the herd is ALL on one side or not.
what the "news" will do re a catalyst will give the move the "magnitude" of the move. that's really the only reason i even get curious about news- is when i see a huge move in the market or a stock- then i'll look for what the "news" was to do that move- if the stock or the market move higher or lower than what i'm already expecting! like for wednes, i know that the sell off i was expecting on wednes basically already took place today- thanks to that head/shoulders pattern that i wrote about on here that was on the spx intraday chart! it completed to the neckline at 1898 AND "almost" got to the price target of the pattern- prc trg was around 1850. so now on wednes, based on ta only, i know that the spx should go back into the 1890s as that is where it needs to go to based on a daily ta occurrence that happens each day! now after it gets to the 1890s, i don't know where it will go to- whether it sells off or stays up, i don't know right now- BUT, during the day tomorrow, i'm sure there'll be a chart pattern on its 5 min or hrly chrt that will let me know what to expect for it next ;) yet do i know of any "news" right now to take it to 1890s? no! all just based on TA- & nothing more!
anyway- hope this info helps :)
oops- i meant in the above, it is very MISunderstood!...
so, getting back to my last sentence in the above:
it didn't matter what the "news" was in aug to oct- the news could have been that the us is going into a recession OR europe is losing greece OR iran declares war on the u.s. OR deadly virus is sweeping across the u.s. & all ppl are at risk OR u.s. is at war, etc- it didn't matter what the "news" was going to be- come aug to oct- because the CHART has been showing since FEB this year of something NOT GOOD coming to the markets- & that by oct, it would ALL have happened & the markets will have bottomed- & all will be well with the world again! just like when i wrote in apr/may 2014 that the markets were going to sell off into oct last yr & then bottom & go up into january BUT sell off in the 1st 2 wks of dec- i wrote that 6 months BEFORE it happened! now, what "news" of the day came out- it could have been any of those reasons i just gave u- but it was ebola scare! then just as quickly as it was released as "news", it miraculously disappeared - in OCT- & the markets went up into jan- with a 2 wk dip in dec! my point is: i knew what the markets were going to do BEFORE they did it- & not based on any "news"- it was simply based on seasonality of the pres election cycle!
the "news"- whatever the media wants to use at any given time to "explain" the markets- the news doesn't matter! the chart & TA tell where the markets/ stock are going in price! just like swks beating earnings in july & giving good guidance didn't matter 1 bit as swks sold off that day- & why? because 8 times out of 10, if a stock goes UP on the day it reports earnings in after hours, the stock sells off after it reports! just like aapl did in feb after it reported! & i've told this to ppl on these brds for 2 yrs now! & if a stock sells off on the day it reports earnings in after hours, then 8 times out of 10, the stock goes UP AFTER it reports! thats just abt TA! it isn't abt any "news" ;)
butkus- ok, i know for sure i am not explaining this to you that is in an easier way to understand- it's a hard concept to grasp- i know this because every time i'veexplained it on these msg boards, it is very understood- UNTIL ppl start looking for this themselves- given this info i've told them re "news" & a stock's price action! so, i'll try 1 more time- be open to what i'm going to tell you- put pre-conceived notions re "news" broadcast in the media every day of why a stock does whatever in price that day & just be open to this! i'll give examples too! so, here goes:
news is not the reason behind what a stock does in price! to professional well seasoned traders, news is classified as "noise"! to anyone who does ta professionally or as their bread & butter, they will tell you that they NEVER care abt any news out there on a stock OR abt fundamentals of a stock- that ALL they "need" is the chart to look at- & it is the chart they go by to know what the stock is going to do next in price! for example: i wrote on here last fri to buy swks right then at $78s because it would do a bounce up from there- & go higher in price THIS week & be at $85s-$88s within the next 2 weeks! ALL of it came to pass just as i wrote it would! now what "news" told me last fri that this price action in swks would occur?? nothing! absolutely nothing! the only thing i went by was ta!
now if i'm writing on here in june that swks will get to $85s-$88s by oct this year (when swks was at over $100 then & when earnings were coming in july), what "news" was i going by to make that prediction? nothing! no news! yet i knew from the chart that something bad was coming to the market as i saw that pattern on many stocks in almost every sector! saw it in health care, in cyber security, in goldman stock, in aapl, in swks, in nxpi- & i wrote abt all of that on here in june! so how would i know in june what china "news" was coming in aug?? i didn't know! BUT, it didn't matter what the news was- the...
& i'm going to tell u something that you may not understand BUT, ta isn't about what the news is going to be in the future- because no1 knows that info- BUT, ta will "show" u on the chrt & in options what prices are coming & for when (for when: true often but not always)- the chart (& options) tells ahead of time of what is coming for a stock or an index- the news that takes the stock or index to those prices is not known when the chart is telling u what is coming! i didn't know in april/may 2014 what news was coming in sept /oct 2014 to sell off the spx- BUT, i did know abot seasonality- & so in april & may 2014, i wrote on 3 yahoo msg brds (mu, scty, ddd) to tell the brds of what was coming in the markets in sept/oct & then into jan 2015- i wrote ALL of it in apr/may 2014- & everything i wrote came to pass! BUT what i didn't know in apr/may was what prices the spx was going to- as i didn't know in apr/may from what price in sept the spx would sell off from- BUT, i knew the sell off was coming! & then around oct 14th, i wrote a pst on the mu brd telling them that the bottom was coming within 3 days- & that there was strong support at 1820 (spx was trading at 1860 i think? then)- & within 3 days (i think it was the nxt day actualy), the spx bottomed- & went up from 1820! now there was no "news" out at the time that told me that info- there was just the chrt that i was looking at!
i can give u 100s of examples of prices i've called AHEAD of the stock going there- like my call last fri of buying swks at $78 because THIS WEEK, it would be higher than that price- & that within 2 wks, swks would be at $85s-$88s i wrote- now what told me that info? was it news? nope! was it info from 2 months ago on the chrt?? nope! it was the current chrt of last fri that i was looking at- AND other ta info stuff that i knew about already for THIS wk & next wk! so, that's where my pric call came from!
so the chrt tells u where a stok is going- & "news" is just the catalyst!
butkus- i'm not interpreting a chart from 2 months ago- i'm interpreting the chart from right now!! i get my info from the charts that are going on right now- like this week- & i may use info that the chart shows from say a month ago- for example: i know that certain patterns follow each other- so if say i see a chart pattern that played out fully, then i'll know what to expect is coming with the new pattern- BEFORE it even happens! but with some patterns- like head/shoulders- these can be over the course of a 1 day chart (like the 1 today on the spx chart) or for 5 days or for several weeks or several months! like the head/shoulders pattern on the spx that started in feb of this yr. i saw it forming in march/april- BUT i didn't know if it would continue because it was such a long timed pattern- so i had to just sit tight & watch to see if it still kept forming- & by june, it was half way completed- & that was when i knew it had a high likelihood to complete to the neckline. so then i still was just watching it continue to form- & the more it continued forming - in the PRESENT- by doing the body parts of the patern, the more likely it was going to complete- & it did! BUT, i didn't know the "news" of aug to oct of what would make that pattern continue- but the chart told the tale that something bad was coming in the markets- & i wrote abt it on here- in june! i didn't know anything abt china in jun tho!
my price calls are always made BEFORE the stock gets to where i see it going- & i'm looking at not only current patterns on a chart but i'm looking at other "current" ta things like stochastics, macd, macd histogram, bollinger, keltner, gaps unfilled, support prices/ resistance, seasonality, is stock in an uptrend or a downtrend, options info, etc etc- all of that info is from current times- not from 2 months ago. & i've been predicting prices on stocks "correctly" for over 2 yrs on these msg brds (but for 5 yrs in total).
i'm going to continue this in a 2nd post...
... by failing to continue to form), that i would write about that on this board to let people know about that! BUT, those patterns just kept on forming- on many stocks like swks, cybr, etc & on the indexes too- UNTIL the patterns fully formed AND then broke the necklines too! the neckline for swks was at $85s- $88s. that's why now that price area is resistance!
so, anyway- that's what happens- & it's up to a good technician to keep track of the changes that occur each day/ each week/ each month- to see if certain patterns are still forming OR are now playing out (as in, they've completed & are now trying to get to the price targ of the pattern) OR have failed & are now being replaced by a new pattern, etc etc.
so, that's what is going on behind the scenes with TA stuff :)
hope that helps butkus??!
butkus- it's not that the analysis is wrong in the cases i mentioned- it's that things change each day- so the chart needs to be looked at daily in order to see if there are any changes in certain ta things like a pattern emerging for example or a pattern failing- or other changes like a stock was in a long term uptrend (longer than 1 year) and then 3 weeks later, the stock is now in a downtrend. so, things changed over the course of that 3 week time period. like for example: i told dividendseeker in 1st week of august that amba was fine when it was trading at $110 (down from $119s)- because on the day i wrote that, amba was still in a long term uptrend and was holding support prices on sell offs. then, just last week, when amba dropped below $96s (which had been string support), it went into a downtrend on its chart. so 3 weeks ago, amba was fine- it was in an uptrend, holding support, etc. then just 3 weeks later, everything on its chart had changed to now being no longer fine- and now being negative!
same thing with swks- it was in a long term uptrend for over 2 years! then just in june or july, it went into a downtrend- that meant lower prices coming UNTIL or UNLESS it went back into an uptrend! instead, it didn't- and eventually, the downtrend got worse as swks broke its 200 day ma price- which had acted as strong support a number of times on sell offs in july.
so, a technician who knows what to look for on the chart (to measure the safety of a stock- ie: is stock in a downtrend? which means short rallies- or is stock in an uptrend? which means buy dips) will be able to know when things have changed for a stock or the index - and their analysis of 3 weeks ago might no longer be valid because the chart now as changed! when i 1st wrote on here in june of the large head/shoulder patterns i was seeing on all indexes & on many stocks in different sectors, i wrote that i would keep an eye on it so that if things changed with it (like, patterns got negated by...
so, head/shoulder pattern on the spx just got completed as the spx just made it to 1898 ;)
that is very true cgd re that kind of physician! i never looked at it that way, but it is so very true! my doctor always told meabout his family- his kids and grandkids and cottage etc lol- but he also wanted to know EVERYTHING that was going on physically with me- as he told me he takes the WHOLE person into consideration when treating them! he was so wonderful to have as a doctor! i just loved him!! :)
thank you cgd for your post :) was very nice to read :)
aww thank you jack! i appreciate that very much! :) i didn't notice any of the naysayers of mine on here calling correctly for prices or price action - yet, they still just love to fling their mud all over the place! ;)
thank you for replying hack :) it is appreciated :)
i guess i'll try to answer that for you- it's just a guess on my part but my guess is that it is due to people only WANTING and/or "EXPECTING" the markets to go UP! so, if the markets go against them and go down, then they get told: oh it's just the market! BUT no one says anything when the markets go UP because that is what the "majority" of people want (as most people are long) and/or expect to happen- so, no reason needs to be given! but the truth of the matter is that it's always the same answer of: "it's just the way the markets work"- when the markets go up or go down!
ta analysis always works- BUT, when it fails to materialize as predicted, it's usual due to 1 of 2 reasons of:
1- it's the person reading the charts that gets it wrong as they aren't very good at reading charts, so their analysis is wrong (i've seen that one OFTEN lol).
2- the pattern that had been showing on the chart fails to get completed OR gets completed BUT fails to get to the price target of the pattern - both of these occurring could be due to several reasons- like a new pattern emerging that overrides the current pattern that is forming.
hope i answered your question??! if not, then it means i didn't fully understand what you were asking?! sorry.
oh my god!! "I" jad an eye doctor like that too LOL - i had to wait sometimes 2 hrs or longer beore i finally got in to see him! he LOVED to talk to his patients- he was a very lovely man- so, it was hard to get mad at the long wait to see him lol - but yes, i understand dennis :) well, see you next week then lol ;)
thank you herbal :) i appreciate you writing this :) i just get sick of the "weeds" on these boards- among the "flowers"- people like YOU , cheetah, cgd, heik, dennis, lilly, mike, toast, etc are the flowers! we can tell whom the weeds are ;)
thank you again herbal :)
theres a head/shoulders pattern right now on the intraday chart of the spx lilly- neckline is at 1898. should get there today or wednesday.
price target is around 1850- not sure if it will get there though.
it's already starting - the sell off for wednes.
wednesdays are normally volatile days- so, that's why i'm expecting a down day on wednes- plus other TA related reasons to ;)
tomorrow could easily be another down day lilly- gap fill day from today's up gaps.