Oct 17, 2014: 11:26 AM CST
As was generally expected, the market retraced higher after several down-days in a row took price to a key monthly support level (1,825).
Let’s look at the current S&P 500 and Dow Jones charts and highlight the surge back to the underside of the broken 200 day SMA:
On the breakdown under the confluence of the 200 day SMA and the August price low with the 1,900 “Round Number,” the S&P 500 collapsed into a vacuum of buying until bulls supported the market aggressively off the 1,825 target.
Now, we see a logical bullish price pathway surging higher toward the underside of the 200 day SMA and this same confluence.
It should be our focus for planning the next swing in the market into next week. Continue Reading…
Oct 16, 2014: 4:22 PM CST
Join us live for a day of trading education from Fibonacci to Price Patterns, Trend Days to Spotting Market Reversals.
I’ll be part of 8 trader educators presenting a full day of content as part of the
Smart Investing Workshop: Financial Leadership from Professionals live event.
I’ll be the final speaker to round out the day, taking the microphone at 3:15pm EST (12:15 PST):
I’ll teach you what a Trend Day is and how to position yourself best for these explosive intraday moves.
The information will apply to swing and intraday traders.
These sessions are free and you can attend any or all sessions at your convenience.
Click here to register for free and start planning your schedule.
Thanks to the team at Investor Inspiration and I can’t wait to see you there live!
Oct 16, 2014: 1:15 PM CST
We’re putting the pieces back together from a broken market yesterday!
An afternoon violent “V-Spike” Reversal took us right back to where we opened, and today’s session took us just above that level where we are at mid-day.
Here’s our S&P 500 update and trending stock scan for the day:
After a market collapse (vacuum of buy orders) swept shares yesterday morning, we’re retracing back to where we ended the day Monday afternoon near the all-important 1,875 pivot level.
We’ll use this as our focal level and trade bullishly for an intraday reversal above but bearishly (to continue the trend into resistance) under 1,870.
Oct 15, 2014: 2:38 PM CST
How does current market volatility – which is surging – compare to the two prior post-stimulus (QE) sell-offs that occurred since the 2009 Bear Market Bottom?
Let’s take a look at where we are and what may be in store if history is a guide:
The chart above shows the S&P 500 index compared with Volatility.
I’m defining “Volatility” as the Intraday Range which is measured by the intraday High minus the Low.
The red histogram shows each day’s range (high minus low).
The black line is simply the 21 day (roughly one month) average of the Intraday Range. Continue Reading…
Oct 15, 2014: 12:44 PM CST
“This time, it’s different” and it is very different.
When price failed to hold a critical “Make or Break” support level (mentioned yesterday), the outcome was “Break” and what a powerful breakdown it is!
Let’s jump straight ahead into a market with no floor and put the pieces of the broken market back together.
We’ll start with a few quotes I wrote to members in the game-planning section of last night’s report:
“However, should buyers fail to take advantage of the probability for a reversal, then we’ll quite simply play [aggressively] short and anticipate a literal collapse of the market… there would be no downside target if this support level [1,875] fails.”
“…prepare yourself to preserve capital or aggressively short-sell because the end-result of a breakdown under 1,875 is a literal collapse that could crush the market toward 1,800 very quickly as buyers realize they’re trapped and their game [buying every dip successfully] has ended….”
The “Collapse Scenario” is precisely what occurred – when sellers took the market under support, buyers panicked and the result was a literal collapse or vacuum in buying which sent shares lower, melting down toward no known target (1,875 was the last logical target ahead of a violent sell-off which we’re seeing now).
Just like a market trading straight-up in a short-squeeze, a market trading lower in a liquidation impulse has no known/obvious target and it’s difficult for new traders to enter in a fast-moving (collapsing) market without retracements.