S&P 500 pattern 5.2 day up, 3 day down holds BUT warning signs
Updated
Yesterday morning's drop of almost 1% was very much not expected based on the previous day trading, but based on the clearly cyclic pattern of 5.2 days up and 3 days down it was right on the mark. If you have been following me, then you will see that I made an addendum yesterday morning (before trading) to note this on my Wednesday night analysis. I was caught off guard by how much it dropped in one hour, but I was able to added to my stocks purchases from the day before during that hour.
The pattern going forward though is not as clear. The very consistent 5.2 day up and 3 day down does not align with the end of the month. The end of March and end of April all aligned with sizeable drops. This time around it does not. I am not sure what the next 2 weeks hold. I laid out several different scenarios and timelines. I honestly don't know which it will be.
What is clear in this chart and my VIX and AD analysis, is that the market is changing. The VIX did not drop as much and spiked up more. The Advanced-Decline analysis pattern had some anomalies but overall held to form. Apple took a huge hit after almost 7 or 8 days up. It looks like the market maybe repositioning to different stocks given how overbought stock like Apple seem to be. I personally am bearish now and I am looking for a moderate down turn at the end of the month. I don't know how long lived it will be or how low, but something is coming.
The pattern of up and down for the S&P 500 since the bottom is as follows:
Will the next rally be 5.2 days, 4.2 days, maybe even 6.2 days? Will the 3.0 days of selling change? Will be interesting to see.
The fact that the pattern is so precise is mind bending to me. If I was a conspiracy theorist, then I would say some large institution(s) is manipulation the market. But we should save that line of questioning for another day.
Please remember to take everything I say with caution and a block of salt. These are just my thoughts/ideas. Please use your own best judgement when trading. Good luck.
The pattern going forward though is not as clear. The very consistent 5.2 day up and 3 day down does not align with the end of the month. The end of March and end of April all aligned with sizeable drops. This time around it does not. I am not sure what the next 2 weeks hold. I laid out several different scenarios and timelines. I honestly don't know which it will be.
What is clear in this chart and my VIX and AD analysis, is that the market is changing. The VIX did not drop as much and spiked up more. The Advanced-Decline analysis pattern had some anomalies but overall held to form. Apple took a huge hit after almost 7 or 8 days up. It looks like the market maybe repositioning to different stocks given how overbought stock like Apple seem to be. I personally am bearish now and I am looking for a moderate down turn at the end of the month. I don't know how long lived it will be or how low, but something is coming.
The pattern of up and down for the S&P 500 since the bottom is as follows:
- 6.2 days up & 3.0 days down
- 6.2 days up & 3.0 days down
- 6.15 days up & 3.0 days down
- 5.2 days up & 3.0 days down
- 5.2 days up & 3.0 days down
Will the next rally be 5.2 days, 4.2 days, maybe even 6.2 days? Will the 3.0 days of selling change? Will be interesting to see.
The fact that the pattern is so precise is mind bending to me. If I was a conspiracy theorist, then I would say some large institution(s) is manipulation the market. But we should save that line of questioning for another day.
Please remember to take everything I say with caution and a block of salt. These are just my thoughts/ideas. Please use your own best judgement when trading. Good luck.
Note
Please note that looking at futures this morning is not a promising sign of this pattern holding strong. I would expect to see futures up this morning, but they are noticably down. Does not mean they will not rebound after open, but be warned. Maybe we are going to see a false breakout down to align the pattern for the end of the month? That happend aftern the first major rally out of the bottom. Maybe it is just the market finaly starting to be irrational like it should be given the econmic outlook? Good luck. Trade smart.
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