No idea up or down the next Monday. However, if you have a strong heart (or good stomach? I usually get stomachache when panic) or good at pretending dead for awhile, here are 2 setups with very good profit factor:
- SPY closed below its BB bottom for 3 days in a row, buy at close, HOLD until the very first day SPY closes above its BB bottom, you have 74% chances to make money. The profit factor is 4.5 which is very good.
- Whenever you see (this week’s) high to (last week’s) low down gap, you buy on weekly bar close, the next week you have 60% chances to make money. The good part is the profit factor which is 13.2, which is super good. The problem is the sample size is only 5, too small. And yes, weekly gap does get filled every time but sometimes it’d take awhile if this is year 2008 once more.
Whenever SPY down 3 days in a row, you buy at close, HOLD until the very first day SPY closes in green, you have 74% chances to make money. The profit factor is 1.6 which is not good enough for the risk.
Routine statistics about SPY down 2 weeks in a row.
- The next week has 94% chances to rebound to $194.02.
- The next week has 87% chances to rebound to $195.52.
- The next week has 77% chances to rebound to $196.74.
Routine statistics about SPY down 3 days in a row (this is about the next Monday, not HOLD until blah blah).
My daily take:
– Looks like the big ellipse posted yesterday is still in force. Market closed exactly as expected
– SPY CMF bullish divergence is massive. It started by mid December.
– It means that this trend has a declining volume what makes it quite suspect
– Market closed slightly below the triple Fibonacci confluence
– Short term NYAD charts are showing a bullish divergence
Conclusion
– Market is in the edge of a cliff. I mean, October’s rebound wasn’t invalidated yet (reached 76.4% Fibonacci)
– Bulls must act now otherwise October/September lows will be revisited
no support from MFI
Some additional stuff, NYAD charts:
– Daily charts using DTO. Similar extreme low levels were reached on 06/29/2015, 08/24/2015, 09/01/2015, 09/28/2015 and 12/11/2015. All of them, no exception triggered a sizable bounce
– 04 hour period charts. We have a positive divergence that started by noon on Thursday
DTO – did you also check the indicator’s pattern back in 1998, 2000, 2008 or 2011? I think we have to look at how the indicators behaved back then. Some of my long term iindicators are close to suggesting that a real bear is just around the corner …
DTO shows only extremes not the trend itself
This oversold could embedded longer than we can stay sober. no clear turn here on daily, on intraday will be clearer no reversal to call out to.
Holy Crap!.. Next logical stop is 1870.. Scenario- see chart..
Update on the DAILY Stochastics-9
Below 20 is oversold
STO-9 is now at 5.78 extreme oversold
Asking the question: How long can we stay oversold ?
Just under the green boxes are the # of days it took before a bounce, counting from the day STO moved below 20 to the day it moved back above 20
You can see that the oversold period ranged from 2 to 5 days this year
Today/Friday is day #2 oversold, but note that the 5.78 oversold line (pink line, pink arrows) was only hit one other time this year and that was on 13 nov, and it bounced the next day
So… if we don’t get a bounce in the next 1-2 days (or maximum 3 days), I’ll eat this chart…
Makes sense.. 1870 by Wed the 13th more or less..
Nice chart Al!! 🙂
hey where u been?
miss you terribly
https://www.youtube.com/watch?v=89MihWd6zKk
Thanks Al!! Miss you guys too! Just been busy with life!!
The bounce is in the next corner. But the main question is: how far it will be?
If we have the big bounce as we expect, I will do believe that the Ellipsis is nailing all this big round top.
If this is the case, 2050 is very feasible
Updated chart with a count… max is about 2000 to me.. See chart.
Ajvs:
The STO-9 system allows NO frontrunning
The BUY signal comes when STO-9 moves above 20
“””But the main question is: how far it will be?”””
It will stay long until the STO-9 turns and crosses down
You need a target? It’s a moving target….
Under this system we don’t tell it what the target is; it tells us…
(and it all depends on your timeframe)