The market was flagging all day long in a downward channel. As a multi-day/week holder of shorts and cash, the actual shape of the channel and 2-day flag/flagpole means a lot to me. In fact, the last few minutes should have determined a highly likely scenario for the next day, but it looked 50/50 to me. I simply saw no rush to “load up on longs”.
Mathematically, slopes have very high importance to the technical flag pattern. I’d say that today’s flag had a negative slope of around -0.60. For me to give consideration to a potential Spiker™ play, I like to see a slope of between 0 and -0.30, and no positive slopes. Deeply negative-sloping flags increase the chances for failure to the downside. In addition, the length of the flag is also critical. I will give the market one more day to figure it all out.
Not only that, we are in a very slow and boring measured move down on the 1-month/60-min chart. We are still in a downward move until there is a force spike to the upside well above the upper area of the channel. What’s interesting to note is the dried up volume today. Compare today with the past several weeks. It confirms that we are temporarily consolidating here.
Another interesting note is that the COMP has finally caught up with it’s brothers and is making the habit of making new lows on a daily basis. This was a divergence several weeks ago when the COMP was noticeably outperforming the SPX, which was falling off a cliff. Today’s COMP close is entirely under the November intra-day low, an intermediate-term breakdown.
Something to think about: during the Dot-Com crash, the COMP lost -83% during 3/00-10/02. If you round up all the S&P financials, they lost -84% from 2/07-3/09.
The “Crisis Map”
What stocks are you warming up to?Thanx C A
where are the damn white charts?
crude – Nothing right now. I’m just waiting for direction and can take a countertrend move, e.g. I got short MET at $17.45, etc. These days, I don’t care much about what happens. Indifferent about the market because Washington has it by the balls.
Fly, when I use the white charts, I can only use red, purple, and yellow for my lines. I’m not sure why, but all of the others become grey. Besides, I like the sunset in background. It give a sense of calmness in the midst of chaos.
Indeud, what crude_oil said.
great post, CA. love your chart work.
Boy does Suriname feel like a douche! Only country in SA in unofficial recession. Pretty funny since they only have one real city. Maybe they will have a stimulus package and lead us all out of the morass… maybe not.
Did you put that map together? If so, great job.
Today is a spiker day, and it will last for some time. Financials will offer double-digits, even here.
no, the map was free from wikipedia
You can go play softball and quit making charts. You are done!
Full Moon fever.
850-875 SPX on tap.
I can see Hawaii on that map! Lol. a few red dots.
Nice day for the longs.
Full moon. Feast of Purim. No wonder.
CA – How far do you see the financials rallying? I got long FAS on Monday. Someone called a target of 8.65 What do you see?
There’s a lot of money to be made on this kind of spike. My post will be a Spiker special.