This is the weekly chart and we are at major supply. There has been many attempts to break through and after each fall in price, we have had to go deeper below to get fresh buy orders. This cannot be indefinite and early warning of price breaking this range and pushing much lower looks more probable with each passing day. Just look at those long tails, there are some heavy hitters at work there.
Daily chart.
I placed a red line on top to show supply and look how weak price is when it got to the upper portion of this wide range. compare that to the reaction, one sudden strong move away and this says sellers are present and in good numbers.
The last two candles including todays show no buyers showing up. Hardly a surprise given the power behind the sellers. A blue line is marked lower down and I expect no major buying to take place until we drop below this. And even then, any buying may be weak. There are other markets showing the same weakness all around this time, and when this happens the results can be spectacular.
Take a look at the tails on many of the candles on this chart, that is not a sign of a strong market and the regular and sudden spike lower to gain orders.
As impressive as always, Doc!
ReplyDeleteS&P not only dropped significantly based on your analysis and it also did made a strong rebound after breaking below the low you indicated as it reached for the daily flipzone at around 1990.
The strong upbounce not only engulfed the big bearish 24 June daily bar , it also made a new high today.
Many of my retail trader friends are already talking about taking a long when it breaks new high. I wonder if a bull trap is awaiting there to take out both the shortists' and the breakout longists' stoploss?
Breaking into new ground is always best taken after it has been tested, and we are a long way from this. There is no interest in taking this higher for the moment and I would like to see price fall back and see if sellers come in, or if buyers will show up at lower prices.
ReplyDeletePro money if interested, will step in at better prices.
Doc...please...can you make update for SPX?
ReplyDeleteThanks.
Doc,
ReplyDeletethis question is a bit unrelated but may I ask you why you left RTM?
xman, yes will do shortly an S&P500 update.
ReplyDeleteTim, there comes a time when it is timely to move on with many things in life and RTM for me just got too much to handle. There was such an amount of contact both on the forum and via email, that it distracted me from what I do.
When I started my own blog, I did ask before hand what folks wanted and it was a toss up between a blog and a forum. A forum would have been a repeat of RTM and other sites like it where it turns into a social gathering and it gets hard to keep peoples attention focused on trading. Trading is a business and no amount of talk other than on focused trading is suitable for those who want to learn and those who see trade setups and wish to give reasons why they see it as a setup.
RTM members and those running the forum have only kind words from me and there is nothing bad or negative to be read into me no longer being there.
Totally reasonable :)
DeleteKeep it up with this blog.
Tim
Ive been reading your posts for a while, very inspiring doc, excellent analogy of the market.
ReplyDelete