Did any technicals predict the melt down?

[Neuroway]

I've never been much of a technician (ok, never been one at all), but I think it is something I should start getting smart on. I want to start with the technicals that would have pointed me to the meltdown that started (I think) on Friday, and has generntinued through today. Any suggestions? Thanks.

Nothing predicts anything, Saltynuts. A trade is just like a chess move. Your opponent is the market. In chess, for instance, if you've got this:

1. e4 e5
2. f4

You've got a potential King's Gambit. White offers a pawn to Black in exchange for faster development. Nothing, and I repeat, nothing can predict that Black (in that case, Mr. Market) is going to accept the gambit. If it does, then you (White) know what will happen:

2. ... exf4.

You then know what your options are. You're in control. Total control. That's if you know how to play chess (or the market), of course. For me, it's just the same. A trade on the market is nothing more than a single move in a game of chess. It is not deterministic at all. It's just a move. Hopefully bringing you one step closer to victory.

 

[Neuroway]

This is a real work of art.

 

[vincentnyc]

Not only did I predicted, I back it up with my action by moving all the money out of my 401k mutual funds into money market account last friday 2/2/18.

 

[Sprout]

I've never been much of a technician (ok, never been one at all), but I think it is something I should start getting smart on. I want to start with the technicals that would have pointed me to the meltdown that started (I think) on Friday, and has generally continued through today. Any suggestions? Thanks.

Overnight between 1/29 and 1/30 on the 30min, the simple MA20 and MA50 XO'd MA200. From there it's easy to see the concerted selling pressure continuing. There were signals prior to this but the above is simpler to see and understand. The symmetrical opposite is valid as well.

The settings can be fiddled with more or less to compare and contrast short term oscillations of price vs longer waves. Like swinging someone on a swing, there's the feeling of going with the flow vs contra-flow and the interaction between the two.

 

[speedo]

Two strong consecutive divergent highs signaled serious weakening.

 

[Spectre2007]

 

[athlonmank8]

The problem with momentum divergences is while at times they are precursors to important trend changes, quite often they motivate you to exit a trade even during a strong trend, or worse yet, to attempt fading it. Take a closer look at the chart you posted, there are many "bearish" divergences that occur throughout the uptrend.

Exactly. Trading the divergences in this type of a trend is suicide. They wouldve lost most of their money a long time ago

 

[athlonmank8]

Ya got me, it is cherry picked. I use two momentum indicators - TD ROC and 5-34-5. The ROC diverged the other nuh uh.

Then why post it lol? whats the point in showing something that doesnt work? Looking at the chart you posted i can see multiple divergences that wouldve emptied your account a long time ago.

 

[tomorton]

Just because you can't why do you generalize that others can't either?

As an answer to OP's questions, 2 things:

1. We kind of needed to put in a double bottom type of thing and that indicated a low like 2 days ago. The market just rallying back to the previous new highs was a mirage.

2. We dropped 2870-2530=340 ES points from top to bottom and usually a 50% retrace is in order. If we do the math, 2530+170=2700 and yesterday's top was at 2727 or so.

A strategy dependent for profitability on predicting the timing and depth of a sudden market correction is probably not a good one to follow. The process of prediction suggests a need to prepare for a unique event, implying that most of the time preparation would be inappropriate as a correction is not predicted.

 

[SunTrader]

The problem with momentum divergences is while at times they are precursors to important trend changes, quite often they motivate you to exit a trade even during a strong trend, or worse yet, to attempt fading it. Take a closer look at the chart you posted, there are many "bearish" divergences that occur throughout the uptrend.

I don't see many. I see one other period where ROC went flat while price went higher in - early Nov '17.

But I don't use ROC in isolation to make a trade decision and always always need confirmation once a decision is made.