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NYSE Comp: Broadening Top Potential Macro WarningThe NYSE composite has spent the last year building a classic broadening top pattern. The pattern develops as strong hands distribute to weak hands, and when it occurs, often marks a transition from bull to bear. 1. Broadening formations are relatively rare and because the pattern itself is difficult to trade systematically (as the boundaries are continually moving farther apart) aren't given a lot of attention in literature. a. Edwards and Magee in their seminal "Technical Analysis of Stock Trends" suggest that the broadening top, as a rule, only appears near the end or in the final phases of long bull markets. b. Shabacker in his classic "Technical Analysis and Stock Market Profits" also remarks that the pattern is rare, but extremely important, often marking an important transition from bull to bear. 2. In my experience both Shabacker and Edwards and Magee are correct. They are rare and generally very hard to trade (so I don't bother) but they do offer an important warning of a potential phase transition. 3. Note that the pattern isn't always well defined, with overthrows and underthrows of the pattern boundaries occuring regularly. This is what makes it hard to trade or design a trading strategy around. a. The pattern is extremely compelling when it appears in individual equity charts. As I see it, these are the important chart elements. 1. The composite broke the trendline from the March 2020 low. This changed the weekly trend from up to neutral. 2. After breaking the trendline, the Comp spent most of the next year moving laterally and tracing out a clear broadening formation, warning of a potential phase transition. 3. Over the last few weeks the Comp violated the rising trend line (marked on the chart) along the last three internal trend line lows, and accelerated to the lower boundary of the pattern. 4. I have included the 10 and 40 week moving averages. The two averages are roughly equivalent to the 50 and 200 day averages. Note that the 10 has rolled over and is moving to meet the flattened out 50. Often a narrowing between two moving averages marks an important market decision point. Its interesting that it is occuring at the very moment when the broadening formation appears to be nearing a conclusion. 5. If the market does begin to breakdown there are several initial move targets that can be constructed. I like to look for confluences of move targets and chart supports. The more the merrier. a. I like to overlay the .382, .500 and .618% retracement targets first. b. Next I locate chart supports. In this case, the area around the 14183 high from early 2020 can be expected to generate at least some buying interest. c. There is also a measured move target that can be generated using the width of the broadening top, it projects to roughly 14400. d. 14089 is the .382% Fibonacci retracement. 6. The support confluence provided by the pivot, the Fibo and the measured move suggest an initial support zone between 14089 and 14400. I would clearly watch this roughly 2% wide zone for reversal behaviors to either reduce shorts or perhaps, if the right behaviors develop, consider new longs. But again, the MAIN point is not so much generating trading targets as recognizing the pattern as potentially a harbinger of an important trend change. This is particularly important against the context presented in the macro overview posts of the last few weeks. Good Trading: Stewart Taylor, CMT Chartered Market Technician Shared content and posted charts are intended to be used for informational and educational purposes only. The CMT Association does not offer, and this information shall not be understood or construed as, financial advice or investment recommendations. The information provided is not a substitute for advice from an investment professional. The CMT Association does not accept liability for any financial loss or damage our audience may incur.
TVC:NYAEducation
by CMT_Association
45
Entering the lost decade, then, perhaps, the golden age...'Twas a market full of bulls, In a world of delusion, Then came covid, To super charge the illusion. The Portnoy gamblers, The Wall Street betters , The Tik Tok traders, The gamma squeezers, One by one they arrived Dreamin' of the YOLO Or quivering from the FOMO Fueled by the FED And their MMT! Nobody gave a hoot about reality! Been a while folks. Time to be careful again. Prolonged 90 year bull market might be finished. Most see exponential blast off in a new age bull market or final fifth wave explosion to come. I still hold that the rise since March 2020 is a fake MMT induced 'B' wave expanded flat with devastation 'C' wave to arrive shortly. If you've made your wealth, great job, and hold on to it like something precious. If not, shorting opportunity of a life time may be around the corner, although not for the faint of heart!
TVC:NYAShort
by supere
NYSE COMPOSITE - The Stick SaveBasic Materials, Consumer Cyclical, Financial Services, and Real Estate are the Primary Sectors of the NYSE Composite. We indicated the NYSE COMP was reaching an extreme A/D low and suggested a rotation would likely provide lift. It does not appear to be sustainable, but for now, it's in Trade. ______________________________________________________________________________________ Historically the Composite has followed Dow Theory Sell Signals. The Transports should be closely observed at this time. It will again as the lead up into Financial EPS arrives this coming week. Inflation has been the Trade into all Primary Sectors with Real Estate beginning to show signs in November of several issues. The NYSE Composite is an index encompassing all common stock listed on the New York Stock Exchange, including ADRs, REIT's and Tracking Stocks. It is the broadest measure of Market Health. A free-floating market capitalization is a useful tool to "adjust" prices. It skews heavily depending upon these adjustments to "Capitalization". Financials, Energy, and Health Care are the Primaries by Market Cap. _______________________________________________________________________________________ Traders should follow the NYSE closely as it provides a great deal of information with respect to the direction of the Growth Sectors - The Trend sets the correlation, typically in a rising rate environment, we will see a reversion to an Inverse Correlation.
TVC:NYA
by HK_L61
2
NYSE COMPOSITE - Enormous Range / Breadth - MentosBeginning to see signs of Coca-Cola meeting Mentos - YouTube it. When the Mentos hit the Coke and the Cocaine remains Pure Bolivian Fish Scale.... the results are explosive. The Range here is extreme, Components on balance have been smoked and hard. Many Companies within it are Zombies Financially. Smiley Virus knows and belts it out in convincing fashion: www.youtube.com Hannah Montana impresses from time to time, this is one of those moments. ________________________________________________________________ There is a large Break ahead, failures into Q1 are assured, many entities will cease to exist in 2022. Broken, Busted, Debt Laden - Walking Dead. QE V.27 would need to expand exponentially to prop up this complete Mess. Stimmy, FED balance Sheet and more Fiscal Dead Ends all needed to Ute Higher. Possible, but the wreckage that would bring assure a Market Decline of 50%+ in 2022. Where do you want to be then... Ask yourself, who has the most to lose, the largest adjustment to make and will this transpire in a Pacific fashion... Highly Unlikely.
TVC:NYA
by HK_L61
2
NYSE COMPOSITE - Breadth remains UnwellAs we move into Year-End, the NYSE COMP should be Observed closely as it has been the Leader along with the YM. Any reversal here will be met with relief for the Big 7 - which continue to grind higher with AAPL leading the rediculous charges higher. ______________________________________________________________ The FED is heavily intervening in the "7" it is all over the Tape... they are supporting the narrowing Breadth. The US Economy, what's left of it, is the Equities Markets. They will defend it until they no longer do, we do not when, but all the Indications are they will continue this absurd Prop until they fold up their tent and let it fall under its own weight. _______________________________________________________________ Patience as this can grind on for a while longer and they will make certain to Run the Tables again and again prior to it being a locked-out downside trade.
TVC:NYA
by HK_L61
4
NYSE 2019 December - 2020 MarchNYSE COMP is far worse off Structurally @ NOW. That said, let's see how far they will press their Luck. I don't believe Consumer Sentient is going to IMPROVE unless Uncle Sam opens up the Stimmy can o' Worms again and barfs out $10,000 checks. Odds do not favor that as we would have 3.5 10 Year Yields. It is all on the Pelican at 3:05 PM EST. I believe the Bird gets sold either today or tomorrow. We shall see, without Risk, there is no reward. The Trend, although confusing to the HERD... Remains DOWN. Unusual to be angry, but today... provides it in spades. Not about getting even, simply disgusting.
TVC:NYAShort
by HK_L61
14
NYSE COMPOSITE - Signals 15 - 20% CRASH AheadIt's comical, how the operators are so desperately trying to keep this JUNK elevated. They can game it during lower volumes, but they clearly do not have the Support from anyone other than the FED to keep this MESS up here. It is going to collapse under its own weight. ____________________________________________________________________ The FED now has one of two choices... Go Lovie Howell - Rates SKY on the release of Pigeons Accelerate Hawk - When Doves CRY Swan Lake in Trade - Pick a Vector Powell will be referred to as the "Pelican" moving forward. _____________________________________________________________________ It doesn't matter - Equities are cooked SHort Term, Wall Street is getting their Fills and they can be extreme. We have our SELL Orders Positionjed again to 44% of Capital in TQQQ NQ RTY ES SMH Momentum is to the Downside. Every One of my larger TF indicators is as NEGATIVE as they have been in since 2020. _____________________________________________________________________ A Larger SELLOFF it to be Anticipated - IMHO Watch the ES @ 4665 - this is the Pivot to SELL for R/R up to 4707. This would complete the Symmetry. I am early on TQQQ SELLS but taking them today and intend to HOLD. Full Position will be 20K presently 2K @ 170, 32 for SELL @ 171 up to prior Highs x 16 The same applies to NQ. Tech will be the largest CORE SELL POSITION ______________________________________________________________________
TVC:NYAShort
by HK_L61
2
BULL MARKET ENDING NOW The wave structure within the chart posted is that of my wave count . also based on WD GANN 817 1982 to which this great bull market was started we saw a new record HIGH . the targets post a few months back called for the blow off into 4460 to 4617 I stand by the math and data back to 1902 to present ! upside is limited due to debt ceiling in 1982 .The year I made my first trade long silver at 4.83 low 4.78 the US debt was expanded since that time near 38 fold and that the dow and sp near the same . I am as bearish as I was feb 8 2020 and warned of a crash and also projected a world event 3/18 to 3/20 2020 this was the low of super cycle wave IV We will end this bull market of within the target of 4460 to 4617 A NEW BEAR MARKET HAS BEGUN A PANIC LOW IS DUE MID OCT 2022 AVG decline over the last 120 years . 38% . BEST OF TRADES WAVETIMER !
TVC:NYAShort
by wavetimer
1