P&F Chart School

[James48843]

What a day.

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[malyla]

By the way- I've never seen a 34 square "long tail" down on the S&P 500 before.
In my life.
I'm 48 years old.
I guess if you live long enough, you see something new all the time, eh?

I'm in at 880 - d$#m the nukes. If it's worse that 880, then say a good word about me to the all-powerful being who requires my presence soon.

G.F.L We all need it.

 

[James48843]

Let get real her. We're sitting -14% below Oct 1st's level, and we're only at the 4th trading day of the month.

Most months, even in down cycles, NEVER finish more than -11% down. And those are RARE events.

The one exception was that big crash of 1987, which this IS NOT.

That year October was down -21 %. Followed by -8% more percent in November 1987. But this IS NOT 1987- not even close. Everything is happening in slow motion this time- and it is much more like 1929-1932 than 1987.

Every other month since 1950, we've had AT MOST an -11% decline in a single month.

October historic, down months 1950 to present:

Down Years
2005 -1.77%
2000 -0.50%
1997 -3.45%
1995 -0.50%
1990 -0.69%
1989 -2.52%
1987 -21.76%
1984 -0.01%
1983 -1.47%
1979 -6.75%
1978 -9.16%
1977 -4.34%
1976 -2.22%
1973 -0.13%
1971 -4.18%
1970 -1.25%
1967 -3.53%
1957 -3.98%
1955 -0.35%
1954 -1.89%
1951 -2.26%
1950 -0.81%

2008=?

Source: http://www.moneychimp.com/features/monthly_returns.htm

So the only question remaining now is - when to jump back in?

Is it time yet?

Answer that- and we'll see.

​

OK- I capitulate-

I said two days ago that this was NOT 1987. We were 14% down, and only once in the period of 1950 to 2007 did we have a month GREATER than 11% down, and that was during the crash of 1987.

I will note here and now, for the record, that this is now the 9th of October, and we are now down, officially, -21.90% for the month of October so far. Therefore, we have officially exceeded the decline that was the 1987 crash.

Where do we go from here? If we went flat- exactly sideways, for the rest of the month, we would have the worst month since the depression.

If history is any indicator (I guess we should stop saying that, eh? History is not proving to repeat itself) then we could expect to go higher before the end of the month. After all, conditions are not as bad as they were in 1987, now are they? Are they?


I give up.

I need to go pet my dog, hug my wife and son, and enjoy what life I DO have.

View attachment 4854

Jake doesn't care what the market did today. He still wants me to play tonight.




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[James48843]

Just in case you were curious- a couple facts tonight.

1. S&P volume hit 6.8 billion shares today. Pretty good, but not anywhere near a "capitulation surge" in the traditional sense. I would think something more like 10 billion shares trading is what it is going to take to signal an end.

2. the VIX hit over 64 today.

I've NEVER seen it over 50 until this week. And I've NEVER seen it hit 64 before.

And what is worse, according to the VIX P&F chart, the expected top "price objective" for the VIX is going to be 88.

View attachment 4857





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[alevin]

Karl Denninger is talking numbers whose names I dare not put into print myself-they are too horrifying, yet his logic is compelling. If you want to see for yourself, take a walk through his editorial from yesterday and then read todays. Both are posted at http://market-ticker.denninger.net/

 

[James48843]

I cannot say a thing. Speechless.

Opened and dropped over 7.7% in the first ten minutes of trading. Volume over 25 BILLION traded in the first ten minutes.

View attachment 4858
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[James48843]

View attachment 4859​

 

[Pilgrim]

Another shot in the endless debate:

"Whenever you hear words like ‘overbought' or ‘oversold' or ‘momentum' or ‘support' or ‘resistance,' it means that whatever you're hearing is garbage. But it also means that the person you're listening to has no idea what's about to happen, and is therefore resorting to the financial equivalent of astrology."

http://finance.yahoo.com/expert/article/stockblogs/90717

 

[hessian]

Today's, Monday, 10-13 P&F Pattern - "Long tail Up." Wondering what this suggests?
Retracement? --Or when would a new P.O. come about?
VR
View attachment 4881

 

[James48843]

Today's, Monday, 10-13 P&F Pattern - "Long tail Up." Wondering what this suggests?
Retracement? --Or when would a new P.O. come about?
VR

I have no idea.

This one is so far out of historic data, I am not even going to hazard a guess.

I am looking seriously for a good spot to jump out. I've used up my two moves already this month- so I would only have "G" to go to until November, and I am not happy with that prospect.

But I am setting aside any P&F chart work until things calm down. It simply doesn't work to try and make technical interpretations on moves of 10% during a single day.

Ya know what I mean?

I'm not even going to try.

Your guess is as good as mine. I HAVE NO IDEA where we are headed- higher or lower.

 

[hessian]

Today's, Monday, 10-13 P&F Pattern - "Long tail Up." Wondering what this suggests?
Retracement? --Or when would a new P.O. come about?
VR

Thanks James! It sure is an interesting chart though! Completely understandable. Current events are rare, even historic (I heard that today's jump hasn't been seen for 70 years!)
Even Stockcharts P&F "Chart School" doesn't seem to give any clues, either...
http://stockcharts.com/help/doku.php?id=support:pnf_alerts
But, hope you'll keep going on lessons - we got to get back to some market normalcy before too long! :blink:
VR

 

[James48843]

For what it's worth-

(And these days, I am not counting on what it's worth- it's too wild of swings for my taste)

The swings now appear to be showing lower highs and higher lows.

View attachment 4924​

If history repeats it's trends, we'll fall down to around the 875-880 range here on the downside, and then move back north again to the 970-975 range.​

These are some pretty classic formations forming here, although the width of the swing is HUGE compared to normal swings. Therefore, I would NOT recommend trying to catch a wave....you could be underwater for a long time if the tide goes out.​

Kind of like a rip-tide, no?​

 

[James48843]

Nice. Dropped right down to the 875 mark, and reversed.

Higher tomorrow?

View attachment 4925​

 

[hessian]

Hey James,
I thought the same, except I thought - if we only had the Old Rules -unlimited IFTs per month - this would seem almost ideal - like it would have been almost too easy to ride the wide swings up & down (until it breaks the triangle either way of course). :blink:

 

[James48843]

Yeh, no kidding. I could clean up if we had the old rules. I already used my two moves this month.

It's killing me.

 

[malyla]

It's a long way to the bottom bolinger band. I think it's time to stop DCAing for awhile.

Everyone think light (blow some hot air). Maybe we can get the market to rise a little before gravity (and the credit crash) pull it back down. One, Two, Three, blowwww.........

 

[James48843]

It's a long way to the bottom bolinger band. I think it's time to stop DCAing for awhile.

Everyone think light (blow some hot air). Maybe we can get the market to rise a little before gravity (and the credit crash) pull it back down. One, Two, Three, blowwww.........

All that wind really didin't help.

Things are not looking well. We may be in for another cycle down soon.

How low can it go?

Well, the good news is....that it can't go below zero.

Unlike other things, there WILL be a bottom, sooner or later on this.

( at least I HOPE so...)

 

[James48843]

And another ugly sign of the times-

VIX climbed up to 79 today....

And the VIX P&F Chart is now showing a target VIX of 150.

I have NO IDEA what that means. I've NEVER seen it like this. Ever.

View attachment 4936


What next?
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[James48843]

VIX hit 89 this morning.

 

[hessian]

James,
That VIX p&f P.O. is amazing!
I'd missed looking at it.
Just a theory: folks are getting wiser -to panic selling? Folks like my Mom asked me should she should sell now - I told her absolutely NOT (its too late for that!) -rather I think folks might be becoming wise to capitulation-selling & are now just waiting - for right time to buy-in soon - but when will that be, is the question.
Theory is that capitulation selling may be a thing of the past? Folks just holding on, no matter what?
VR