Tuesday Show Note

As we await the “Big Kahuna” of all monetary messaging tomorrow (e.g. The Fed) I want to point out some truly granular “market” machinations I alluded to on today’s show.

First…

I said that yesterday’s bounce and subsequent end of day stop fit into the ‘A bit too technical” camp once again, as it seems the algos can no longer hide their footprint. The following chart shows precisely that, for it is yesterday’s movement via one minute increments. I’ve highlighted the area and marked where the day ended.

As you can see, it is precisely, dead-on, the Fibonacci line I argued for relative importance. To wit:

(Chart Source)

Second…

Now let’s move onto today’s machinations via the same increments. Like I, again, stated prior: This “market” is following technical patterns like that’s what they’re programmed for. (yes, sarcasm implied.)

So with that said, what would a “technical” failure pattern look like if all the above was true? Well, here’s today’s action carried through from yesterday’s, again, to wit:

(Chart Source)

Remember that 4200 number from prior iterations? As you can clearly see, it appears the algos were primed and ready to try and find any resting stops (aka to induce a short covering spike higher) yet there weren’t any.

However, with a fail at such a big round number, human nature would imply (and what algos are programed to look for) there might be some late positions initiated precisely after the first failed attempt, but now the algos have to try and get back, if they can. Yet, as you can clearly see – they could not.

Conclusion?

The above demonstrates extreme weakness, at least as of that moment. i.e., there is no “up-side” any longer on the resting side – it’s all on the down. For the above is another textbook example of just what that premise would look like if true and one was trying to postulate and diagram it ahead of time. (aka using a textbook example)

As always, we shall see. But we now know it all becomes visible tomorrow. Good, bad or indifferent.

See you then.

© 2022 Mark St.Cyr

Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.