Dow Daily Bearish Reversal 15300.30
The 16258.10 is a BULLISH REVERSAL, not BEARISH. The underlying Daily Bearish are 15340.00 and 15300.30, followed by 15095.00. Technical closing support lies at 16041.78. A closing back above this technical support will help stabilize the market. The broader support lies at 14769 to 14587. A closing below 15961.79 today would warn that we could make a new intraday low tomorrow, but today’s closing would still be the lowest if we close below 16258.
Keep in mind you DO NOT want too much of a bounce just yet. That will make people feel it is over. We are better off with a less of a bounce and some churning to maintain the bearish attitude. When you have too many people on TV saying just hold, it is not very good. It is better to see full blown capitulation to create the low.
Caution is still warranted and the closing will be critical. A closing above 15961.79 will help stabilize, whereas a closing just over 16042 will be better for now.
S&P 500 Typo
It’s 190600, not 1980600. Hey, I never took typing is high school.
16680 Clarification in Dow
That is a Monthly Bearish at 16680, not a Daily. Penetrating that intraday merely meant we were blowing through to the main Monthly Bearish Reversal lying at the 15550. So a daily closing below that number today has no impact. On our model, this is like the 1987 Crash moving to the same points within relative space and time.
Dow Close for Today
We show important closing support at 16258.10 on our What-If Model. A closing above that level will help to firm today as at least a temp low. A closing ABOVE Friday’s close of 16459.75 will be an additional positive reflection that today’s low should hold at least initially. So far, the Dow has penetrated the October low of 2014 at 15776.58, which was the last panic event reaching 15370.33.
Panic – Time to Jump on the Low?
Our models show a gap in the Reversals, which is what you look for in a panic move. We warned, “A closing below 16680 would warn of a drop to the 15500 area.” This was the GAP. So far, the Dow fell to 15370.33 on our target for this week as the Panic Cycle. We ran our What-If model and asked Socrates what the Daily Bullish Reversal was from this low, assuming it holds; Socrates came back with 17595. Naturally, this is a hypothetical number. The actual number is generated only after the close.
We can see the string of Directional Changes. This is EXTREMELY UNUSUAL and warns that this move today has caused systemic damage to confidence, which helps the shift into the flight to quality that we require to finish the bubble in government.
Looking at our correlation models, gold has not run up to the Weekly Bullish at 1187. It has barely moved up today, warning that today is providing a higher probability for a low.
Looking at the euro, we see the Daily Bullish at 11649, 11679, 11969, and 12353. The intraday high so far has been 11712, currently trading at 11601. A closing below 11649 today will also suggest that today is the extreme.
Today was the target for a turning point with a Directional Change, so this type of move is a good panic that typically eliminates confidence. Markets should now be choppy and many will look to take positions on a reaction, assuming the trend will continue.
The Monthly Bearish in the Dow lies at 15550, which is the number that will say whether this is not a false move but a correction. Then we need to look at October for the next possible low. This is where I would be WRONG about a three-month False Move as we would then be in a sharper correction. However, that would still not erase a rally to new highs. If we follow the same degree of damage, as was the case with the 1987 crash, we elected the first two Monthly Bearish and held the third. This is the 15550 number currently, whereas the first two are 17065 and 16899.
We MUST always define where an expectation is RIGHT and where it is WRONG. This is by no means a time for emotional forecasts that will plague the headlines because that is what sells.
No comments:
Post a Comment