Notice the chart does not contain the last 3 o's which make the last up ward move climactic.
In my weekend post I showed how all of the world's major stock markets moved together. That they essentially moved with the Fed's QE. That the dominant players were heavily involved in one trade and that was to heavily short the dollar and be long everything else. There were signs of distribution throughout the world and there did not seem to be enough money to hold everything up. The leverage to do all this as well as to drive bond rallies all over the world and fund massive worldwide budget deficits is probably in the hands of a relatively small number of players. The leverage must be huge. A problem anywhere must effect everywhere...There is a problem in Asia.
The horizontal formation of the past few weeks sure looks like distribution.
The spx also is flattening out in new high ground with shortening of the thrust. Moreover prices have worked out to an apex, to move either up or down sharply.
Oil looks like it is breaking down.
Treasury bonds surprisingly enough might be ready to move lower again.
The Russell continues much weaker than the SPX and now has a huge area of distribution going back ot early August.
Yesterday, prices were bid up overnight in order to create demand for equities, both from trapped shorts and new longs who like action. After that demand was satisfied, prices fell of there own weight. Today that decline accelerated and was sharp enough that support stepped in with stunning demand at A. On the next decline observe a perfect secondary test and notice how the supply vanishes for one bar. I have to go to sleep so let me just say what I hoped to demonstrate. You as the chart reader must answer the question of what the support buyers intentions are. Is it to hold prices up to distribute more as the point and figure formations would imply? or is it to try to induce another major rally? Knowing this can change on a dime, I believe the former. Good night.
I am sorry, on re-reading this none of the labels came through.
The horizontal formation of the past few weeks sure looks like distribution.
The spx also is flattening out in new high ground with shortening of the thrust. Moreover prices have worked out to an apex, to move either up or down sharply.
Oil looks like it is breaking down.
Treasury bonds surprisingly enough might be ready to move lower again.
The Russell continues much weaker than the SPX and now has a huge area of distribution going back ot early August.
Yesterday, prices were bid up overnight in order to create demand for equities, both from trapped shorts and new longs who like action. After that demand was satisfied, prices fell of there own weight. Today that decline accelerated and was sharp enough that support stepped in with stunning demand at A. On the next decline observe a perfect secondary test and notice how the supply vanishes for one bar. I have to go to sleep so let me just say what I hoped to demonstrate. You as the chart reader must answer the question of what the support buyers intentions are. Is it to hold prices up to distribute more as the point and figure formations would imply? or is it to try to induce another major rally? Knowing this can change on a dime, I believe the former. Good night.I am sorry, on re-reading this none of the labels came through.
