Speaking of fibos, just playing around with some numbers this morning. It's still kind of early here and haven't double-checked my math, but noticed this: from October 3, 2018 intraday high to "the" December 26, 2018 low, the Dow declined 5239 points. So far from Feb 19 to March 12, the Dow has declined 8414 points. 5239 x 1.618 = 8476 points, a difference of only 62 points. The Dow has also nearly touched the 377 week EMA as of yesterday's close, I think something like 150 points short of it. Last touch or close below 377 weekly was in 2011. But to be fair it tore through the 144 and 233 levels this week like they weren't even there.
S&P is a little different. Using the same dates as above, S&P declined 593 points on that last leg down in 2018. Since Feb 19 the S&P has declined 915 points. 1.618 x 593 = 959 points, a difference of 45 points.
So, Dow is within 1% of 1.618 vs. the prior decline, but S&P is within about 5% thus far. There are probably a million other contrary reasons why the market won't or can't bounce a bit from here, I don't know. But I wouldn't be shocked at some type of decent bounce from at or near yesterday's levels, especially given the level of panic the last couple of days. Either way we are in for a few interesting days ahead, methinks.
Could maybe see that happening. But touches of the weekly 200 EMA (blue line) are pretty rare, closes below even more so. Three touches since 2016, with most recent in late December 2018. And we know what happened after that. I think last close below weekly 200 EMA was some time in 2011?
If my crappy esignal data can be believed, the March 8, 2019 intraday low of 2722 held for the rest of the year, although we obviously had lower lows in 2019 prior to the March 8 low. Tested on June 3 at 2728.
So, today (3/9) is basically the one year anniversary of the 3/8/19 low in addition to the 11 year anniversary of the 2009 low that kicked off the bull. No idea whether that means something, or nothing . . .
Darned if I know--other than it seems like important tops and bottoms, or at least nicely tradable moves, seem to happen in March. I just did a quick look at the 10 year period prior to March 2009. Dates may be off by a day or two because I did it in a hurry. I realize one could probably do a similar thing by looking at May, or October or other months of your choosing (especially around Oct 10 or so), but that wouldn't fit my highly unscientific narrative. 🙂
Just looks to me like caution is in order between say March 6-24 for a significant reversal during times there has been a big move in the opposite direction. Maybe it's something, maybe it's nothing. Maybe I'm just wasting extra time these days because this market is far too volatile for this slow blinking, slow thinking guy . . .
At the risk of being "that guy", and trying not to jinx the recent sharp decline, but I believe today is the 11 year anniversary of the intraday S&P low, with something like March 9 the closing low anniversary that kicked off what turned out to be quite a bull run? If my hazy and fading memory serves, I think that closing low was something like a 12 or 13 year low at the time. Granted, those 2009 lows came after a 50-some percent drop vs. where we are at today, but I don't dare go back and read the end-of-the-world articles from those days in the mainstream and financial media. I'm afraid they may sound similar to some of what we are hearing now.
Maybe this time it really is different (and worse), and to match the 2007-2009 decline in a percentage fashion there would obviously be a long way to go yet. If that is the case, this decline is just a cub so far and a real bear has yet to appear. But I hate market milestone anniversaries like today and next week. They give me the willies because of increased potential for weirdness. And it has been weird enough lately. Some of these violent intraday price swings in such short time periods of time are breathtaking.
I have been struggling with channel placement all week. Here is my lame attempt on 32M ES tracking the downtrend with midpoint blue line placed at Friday's close. The inner lime green channel lines have done an OK but not perfect job of containing the down move, until this morning's move up, so I added a parallel channel line to the down channel, which kinda worked to catch the advance. But the two up channels I'm not so sure about, the steepest one has broken for now. We were up 90-ish point off overnight now, but I don't even know if that's a lot, given last few days action. Still feels like down is the way for now. I'm interested to see what happens if we drop to the upsloping midpoint line around 3125-30, but I hate trying to trade these wide channels.I'm just gonna watch awhile and see what happens. 😡
Are we getting close to one of those one day or so, tear-your-face-off short covering rallies yet, maybe today or tomorrow? Or do we continue down into the abyss? As of now, we are up about 50 ES futures points off the overnight low, and it doesn't even look that impressive on the charts yet.
Finally broke down thru the bottom of the channel I was using today. Got extremely lucky and closed the last of my longs at the second thrust at 3383.75 up at that pink horizontal Action Zone line. Shutting it down now for the week to spend Valentine's Day tomorrow with the Mrs. and get a start on the holiday weekend.
Doc, thanks so much for scaring me out of my longs almost exactly at today's top. You da man! And thanks for all your great calls for what turned out to be a really profitable week--really appreciate them! To show my appreciation, I am going to add to my Technical Trader subscription and add one next week to the Liquidity Trader as well, even though I don't understand the subject matter very well. 🙂
Knock 'em down tomorrow and see ya next week. Thanks again.