P&F Chart School

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Man, is that Ugly!

Here is today's P&F chart. Notice that we got TWO new "O"s forming on the downside, and that makes a total of 23 down units without a break. Good grief Charlie Brown, that is incredible!
View attachment 4276

Now, you'll also notice that the downside bearish price objective slipped downward again today. Now, at an incredible 970. I don't know about you, but that one is a POWERFUL message that the blood will continue.

We have a resistance point at 1220-1224. Today that one got clipped right out of there.

If I had ANY brains at all I would have cut my losses and bailed out again upon seeing that.
​

I HATE the new limits- because I know if I move out to "G" now, I will NOT be able to get back in until next month. I WOULD have bailed out today if it were not for that.

But, there is one small glimmer of hope on the horizon. Lord knows nothing else seems to be going our way. That one glimmer is the VIX number, which today bounced up to 30.84. That's a pretty strong number, and reason to hang in there when all else is lost.

View attachment 4277
There has been so much bad news, for so many days in a row, that at this rate, our stock funds will be absolutely worthless in just 70 more days.

and I KNOW that is not going to happen.

But loosing one percent every day for days and days and days is getting very old.

So here's to the idea that one more day- well, that can't hurt us any more than the last four weeks have, now can it? (Said in desperation- because there is no hope left, and that is EXACTLY when we should get a bounce.

Note: I am expecting a bounce up. I am NOT expecting a bounce back to previous highs anytime soon at all. When it DOES come, and it will, I plan to use it to regain my recent losses, and then perhaps go to the sidelines for a while and lick my wounds. That bearish price objective of 970 is SCARY, and we'll have more downside after the expected bounce returns.

In short- this is what a bear market looks like.

Full of opportunity, and full of pain.

I would like some of the former, to help me get over the latter.


​
 
WHOOO HOOO! well I mean wooo hoo (little woo, little hoo):nuts: The price objective is still bearish so I'm not going to stick in any more toes.
 
Yes, luv2read- we are at five boxes up.

Now, you'll notice that we still have that red bearish line over the time here. That's an indicator to me that the bloodshed is just starting, and to expect a reversal again and heading downward again in the future.

So how far do we go upwards before another reversal? That's the question.

One of the drivers over the last few days has been the price of oil breaking off it's perpetual upward direction. That's the first outside indicator I will be watching closely to see which we we will go.

Without any outside influence of the oil price, I would expect about a 50 % retracement before we fall off. Since we had 23 units down, that would lead me to think we'll get about 11 units up.

But that could vary, depending on outside factors.

If the price of oil collapses down below $100, then we'll get better than an 11 unit retracement.

But if the price of oil reverses again and heads north past $140 again, then we may run out of steam very early.

Because all the other factors- banks, airlines, industry earnings, unemployment, etc, still seem to say our economy is slowing down and in a skid.

And remember- it's the outside influences that move market directions.

Note: Here is an unscientific indicator if ever there was one: Traffic on my local highway. For the last couple years, traffic has been bad. Real bad. My morning commute has been a half- hour of clogged roads at 5 MPH. This, on an interstate.

About January this year it started getting better. 30 MPH, with just a few places down to 5 MPH.

By April it was clear sailing every day to work- 55 MPH or better. And it stayed that way.

Until last week.

Last week, I hit my first slowdowns again- 45 MPH in a couple places.


And the bottom hits the market this week.

Could it be that the economy has turned?

Well, by the "James's drive to work traffic jam" indicator, maybe.

Yes. it's unscientific. But hey, it's not anything worse than all those other Fed prognosticators.

I'll keep you posted. :-)
 
James48843 said:
Yes, luv2read- we are at five boxes up.

Now, you'll notice that we still have that red bearish line over the time here. That's an indicator to me that the bloodshed is just starting, and to expect a reversal again and heading downward again in the future.

So how far do we go upwards before another reversal? That's the question.

One of the drivers over the last few days has been the price of oil breaking off it's perpetual upward direction. That's the first outside indicator I will be watching closely to see which we we will go.

Without any outside influence of the oil price, I would expect about a 50 % retracement before we fall off. Since we had 23 units down, that would lead me to think we'll get about 11 units up.

But that could vary, depending on outside factors.

If the price of oil collapses down below $100, then we'll get better than an 11 unit retracement.

But if the price of oil reverses again and heads north past $140 again, then we may run out of steam very early.

Because all the other factors- banks, airlines, industry earnings, unemployment, etc, still seem to say our economy is slowing down and in a skid.

And remember- it's the outside influences that move market directions.

Note: Here is an unscientific indicator if ever there was one: Traffic on my local highway. For the last couple years, traffic has been bad. Real bad. My morning commute has been a half- hour of clogged roads at 5 MPH. This, on an interstate.

About January this year it started getting better. 30 MPH, with just a few places down to 5 MPH.

By April it was clear sailing every day to work- 55 MPH or better. And it stayed that way.

Until last week.

Last week, I hit my first slowdowns again- 45 MPH in a couple places.


And the bottom hits the market this week.

Could it be that the economy has turned?

Well, by the "James's drive to work traffic jam" indicator, maybe.

Yes. it's unscientific. But hey, it's not anything worse than all those other Fed prognosticators.

I'll keep you posted. :-)
Click to expand...


A retracement today of about 100 Dow points would make me want to get in for a possible short term bounce. Unfortunately I won't be able to watch the market's today. I like your "James drive to work traffic jam" indicator. I do the same thing myself. Metro ridership is at all time high's almost daily. Futures are pointing up currently. I'm scared of this bounce running out of steam and I don't want to get whipsawed out.

Good luck everyone.
 
IF it makes 1320, then that would be a 50% retracement. I HIGHLY doubt we'll get that on this cycle.

The good news is that stocks have reacted well to the oil drop. Keep your eye on oil. If anything allows oil to spike higher- more than a couple bucks, then sentiment could turn on a dime and head south again.

Here comes Hurricane Dolly. If I was smart, I'd bail out and lock in the gain for the month right now. Luckily it's not looking like Dolly can much adversely affect Gulf oil- but if it did, then watch out. As long as it doesn't do TOO much to the Houston area, we should be ok. But keep your eye out tomorrow. I think there will be some outside force that pushes the markets back down, and soon. We'll just have to wait and see.

P.S.- More traffic jams today. Good sign.
 
As long as the refineries aren't hurt, we should be ok for up to 6 months, even if rigs and pipelines out in the gulf are damaged. There's oil in the holding tanks and SPR. The reason oil and refined products shot up after Katrina and Rita was that 99% of the refineries on the gulf coast were damaged - no way to refine the oil stockpiled in the tanks or SPR. Refineries are operating at 89% of capacity now BTW. Holding back to let demand catch up to supply.

So, let's hope all the storms bypass the refineries as well as the rigs and pipelines. Oil rigs shut in to prep for a storm, and there's enough of them out there that a majority of them will come right back online after a storm and the price of gas won't be affected much, but if even ONE refinery is shut in, the price of gas will skyrocket.

Thanks for the update on the traffic stockticker James. :)
 
OK- we're still looking good so far. Up this morning to 1290, which gave us two more "X"s. I think a lot of that has to do with the continued fall in the price of oil.

However, we're not yet halfway back from the last big fall. That would be around the 1320 mark- and that would be a 50% retracement from the beginning of the most recent fall to the bottom. Over history, going more than 50% on the first cycle has been a struggle, and the ONLY thing I see acting as positive news is the fall in the price of oil. Should that change, and oil start moving back up, then I think we'll get a reversal.

Anyway- here is today's chart:


I'm watching closely for signs that oil reverses. And watching to see if we're going to approach the 1320 level. If either thing happens, I plan to be ready to move to G for safety. Until then, keep a close eye on things.​
 
Danger zone, but it hasn't broken down into "O"s yet.

I am holding one more day.

If it breaks to the downside, then it's time to "eject, eject, eject".
 
Well, that wasn't much of a rebound, before everything broke down again.

This afternoon was pretty nasty, eh?

We ended up down enough to make those little nasty "O"s appear once again.

Now, if I were a betting man, I would wager that we have more - a lot more- on the downside again. Since I didn't bail out today (Probably should have used that "G" move, but I just couldn't bring myself to do it before the noon cutoff) I have until at least noon tomorrow to decide what to do.

Here is today's chart.

I'm HOPING that what we are about to get will be a repeat of an earlier move a few months ago. In that move, as shown here, we dropped three "O"s, and then got a little strength back again. I'm hoping for a little more of that. We should know tomorrow morning which way it will go...

View attachment 4338
The difference between then and now, however, is that then, we only had a fall of about 14 units, before retracing more than half-way (8 units up), then down three, then up five.

This time, we had a fall of 23 units, and only got 8 of them back before we broke down three. Not a good sign.
Oil isn't helping. The up we got over the last few days may have simply been the slack in the oil markets, and some relief out there at falling oil prices. If oil goes back up, we're toast, and the markets tank. Markets did not like the fact that oil closed higher today.

All signs still point to the bear eating away at this market. IF we get a nice up tomorrow, I'll stay in and try and make it back. If, on the other hand, it looks again like the bear is going to eat away all gains this month and keep going down, I may jump out. I'll know more tomorrow.

Good luck, and happy investing.


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