I Draw Channels- The Market Ignores Them - What Up Wit Dat? 2/18/21

[DrStool 259]

Equal height trend channels have been really helpful to us through the years in identifying support, resistance, and price targets on the intraday movements of the S&P 500 and, more recently, the ES futures. 

Lately, not so much. I draw the channels, just like always, but instead of stopping and turning on a dime, violations of the lines seem larger and larger, and more and more frequent. 

So why bother?

I don't have an answer, other than, maybe things will return to "normal." 

But I doubt it. These are signs of increasingly disorderly, unstable markets. 

That's a trend that is unlikely to reverse any time soon. Just my opinion.

But is it really so abnormal, or is this just mental distortion? 

At least cycle projections still seem to work, more often than not. Support and resistance LEVELS, that is the horizontal lines from prior highs and lows, still seem to work, in very short time spans. Although, in today's environment, they tend to hold, only on the downside. They get broken on the upside. 

And guess what! If we draw the trendlines just so, with an eye to connecting highs and connecting lows, with just a little bit of give each way, with parallel lines on the other side of the channel, they do tend to contain most of the action. Not all, but most. 

That's what we have to work with. 

It has to be good enough.

So what do we have here? Short term bottom, or consolidation for another downdraft. 

Don't know. Odds are the first, but they need to clear 3937 to confirm. On the other hand, if they take out 3915, then I think we're good for 3886, next. 

 

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[DrStool 259]

In the old stays, the stock market used to climb a wall of worry. In the current era, the stock market climbs a wall of QE. 

[DrStool 259]

We're kind of on the hair trigger. 30 minute bars.

[Jorma 51]

The heck with lines.  Individual  low points on bar charts of various interday periods, nipple bottoms,  around the top of any hour are a lot more fun to watch for and watch. I'd say a rough case can be made that algos are current attuned to the clock, usually the top but sometimes the bottom of hours, as points to withhold  support momentarily.

[DrStool 259]

Treasury Joins Fed in Spewing Money into A Black Hole

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[DrStool 259]

2-3 day cycle projection 3880

[DrStool 259]

call it 3875-80

[Jorma 51]

An extremely rare nipple top on the 1 minute chart.

 

[DrStool 259]

That one came right down to trend support.

 

[DrStool 259]

Felt crapitulatory

[DrStool 259]

Is this the bottom?

[DrStool 259]

If they don't break this downtrend. the afternoon will make this morning look like a Sunday School picnic. 

[DrStool 259]

They need a stock selloff to get whatever loose change there is to rotate into Treasuries. 

[DrStool 259]

They're above the channel. Need to hold and extend. If it stalls, it's still trouble. 

[DrStool 259]

4 hours ago, DrStool said:

2-3 day cycle projection 3880

That was the low.