(For those that want to know)
Because so many keep asking me my thoughts I’ll just keep updating my ongoing conversation and observations as things seem to strike me as material. Today, as the “markets” closed, it appeared to be sending another material signal, hence this update. To wit:
The above represents the S&P 500™ as of the cash close (aka day session) today. Once again at the end of the day, with 10 minutes to go, the “markets” bolted out-of-the-blue nearly 10 handles. These types of moves have a significance for watching for when, where, and why they are happening, as I’ll explain.
The “when” aspect is the timing. This move happened because of a phenom known as MOC (market on close) orders. This is a re-balancing type of thing that on most occasions takes place without anyone paying it a second thought. However, the reason why it makes itself a phenom to notice today is because, this sudden movement known as a “panic bid” coming in and spiking said “markets” signifies just how few participants are actually in these markets. Or, said differently – no one is here. i.e., It’s a ghost town of a Potemkin Village.
The “where” aspect has to do with both “closing a gap” and within spitting distance of another very highly watched Fibonacci Level i.e., 78.6% aka “the line in the sand for Fibo watching.”
The “why” aspect, in my opinion, that marks something to notice is via the technical. i.e., It’s coming precisely at a point where a very highly watched technical pattern is ending with movements that the pattern itself calls for to terminate. i.e., A market pop up – then a falling back.
The wildcard in all this begins stating now until Friday 8:30am ET. The reason?
Positioning for the June employment report. And it has the potential to be a real doozy, shattering records that may just cause everyone (yes, even the BTFD’ers) to take a pause and ask themselves “Is this ‘market’ really fairly priced?”
As always, we shall see. But as I noted on the above, that little box with the arrows pointing to it is where I’m watching for all the action.
In retrospect the above is basically the same chart that I’ve been using all along, I’ve just tweaked a few things to coincide with the current gyrations. But the overall premise and price levels still hold from prior. i.e., The “market” doesn’t need to do anything different to have the same outcome of what I’ve been suggesting. This just may explain why it’s taken a bit longer than expected. Nothing more.
Once again, we shall see. But I believe it may be sooner, as in much sooner, rather than later.
© 2020 Mark St.Cyr