I’m sick of these last half-hour shenanigans, but this time it was different. I actually expected this one, because the market was at it’s lower range during 12/12 – 12/16 when the market formed a double bottom. This is an example of how charts can provide some value in anticipating pullbacks and throwbacks and possibly, the dreaded “WTF pattern”.
WTF Pattern (noun): A technical pattern that usually occurs during the last hour or last half-hour or even the last 5-mins of any trading day. It doesn’t care if you’re a bull or bear. It is non-biased and only causes extreme agony and stress for the overnight holder. Toward the end of the day, traders sit at their trading desks bewildered and confused as to what just happened prior to the closing bell. This creates a nationally coordinated, highly audible response to the unusual action which begins with a “WTF!!!” and may continue with creative vulgarity to express uncontrollable anger and dismay (see SPX 1-day).
Besides the WTF pattern that occurred around 3:40PM today, we had a series of bear flags that actually did what they were supposed to do — breakdown, making today a very easy day to trade. The 880 breakdown was a key shorting level because the market declined below the 12/18 V-bottom and 12/16’s pre-Fed flag level. After that, the market didn’t have much short-term support.
In addition, I stated that the VIX was forming tails at the 100-day MA and it may reverse. The VIX fell as low as 42.75, went positive to 46.69, but backed off in the last 20 minutes (WTF). This is the 3rd tail on the VIX.
Right now, it looks like we are closer to forming a bearish wedge than an ascending triangle. It appears that both sellers and buyers are exhausting themselves (notice extremely low volume today). Many sellers sold a while ago and buyers don’t really have the buying power (they can’t even buy Christmas presents), therefore, we’re stuck in this slow and boring tape which I’m sure is driving some people mad. The market will stay rather quiet this entire week as more people look forward to their Christmas festivities rather than risk losing more money. For most people, they’ll be glad that 2008 is finally OVER.
Look at 10-day & 45-day charts of the SPX for support/resistance levels and actually write them down. It’s easy to forget about them while you’re on the battlefield. Knowing these key levels helps prevent panic selling or impulse buying. You’ll also be aware of why and where bounces occur so you’re not caught off guard. This is true, unless you get hit by the WTF pattern in which case you’ll only have seconds to react to the idiotic program trading and/or manipulation.
I just realized that the ProFunds Group, parent of ProShares, is only 19 blocks away from where I am. Many people seem to be dissatisfied with their 2x ETFs. After I sell my holdings, if you’d like me to drive by and throw Molotov cocktails at the building, let me know.
Anyway, we’re at the 12/12 – 12/16 lower range, but we’re also sitting on top of the 30-day MA. The market could continue this rally for a short period of time until it hits 875 (20-day MA), 880, and maybe even 890 (50-day MA). After a bounce, if the SPX drops below 860, we would have formed a lower high which will confirm a bearish wedge pattern. For the market to burst through 920, it will probably require a catalyst greater than the Fed’s rate cut, or maybe Santa coming to town would just do. In any case, the market is running out of time and it will soon make a decision with or without you.
SPX 1-day
SPX 3-day
SPX 5-day
SPX 10-day
SPX 45-day
SPX 3-month
DJIA 3-month
NASDAQ 3-month
Russell 2K 3-month
VIX 6-month
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Nice charts, kid.
Could that last “tail” on the Vix chart be construed as a doji?
On my five minute charts, the $Vix seems to be in a pretty tight channel, ovah heah.
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WTFs sometimes happen when traders, who have been trying to build positions at limit prices all day, come to the last half hour and still have their order partially unfilled.
That’s when they cave in and decide to change (WTF)the remaining shares unfilled from limit to “market”.
It sure is a doji, next to a hammer. I think the VIX has only one more chance to end positive and close above the 100-day MA.
Nice work. Patiently waiting for the new lows at the bottom of the wedge.
WTF patterns occur a lot during light volume trades. They tend to slowly kill bears in individual stocks. almost like a bear trap shakeout.
Alpha – I didn’t consider that. thx
Gio – yup, big orders move light volume markets with relative ease.
I still think its all triggered by programs.
Looks like programs to me also. I had 6 individual stock charts open on the monitors, 2 targets in staples, 2 in health care, 2 in restaurants/booze. 5 out of 6 showed simultaneous surges to the close. I mean to the second… After about 5 minutes of this I checked out the index etfs, and yep…there it was. I’m so used to seeing that bullshit that I just routinely conclude the bots are in there either buying or forced selling. The sneaky ones are shifting to lower volume buys/sells spaced at 10 min intervals early in the day starting about 10:30.
Fuck em…shift to the 1 minutes and be ready to pull the trigger one way or the other…any time of the day.
not 100% sure but i think the buy back fuckery card might have been played …i also think it can only be played at certain times …but im not sure ..i did notice a huge buy of “X ” near closing 199.4k
corporate buybacks are not allowed after 3:45.
And anyone wonder’s why I gave up and decided to start hunting indices?
Normally, that rush would not have happened (earlier in the year) but, it pushed off the Qsinator buy by 2 cents.
If it’s bots, then they should be able to be owned.
I like Manuel’s idea – change the focus.
Hey, ChartBoy:
So….
What is YOUR prediction for the next week?