Feels like the weekly has gone down quite fast, so I reckon a sideways week would make sense next. Straight down after that seems a bit too obvious so I wonder if we will see another trend line touch before going down again, if it does go down further that is. The potential inverse head and shoulders pattern could bring in some buyers for big players to sell into.
ES Journal - 2021/2022
- Thread starter Buy1Sell2
- Start date
Feels like the weekly has gone down quite fast, so I reckon a sideways week would make sense next. Straight down after that seems a bit too obvious so I wonder if we will see another trend line touch before going down again, if it does go down further that is. The potential inverse head and shoulders pattern could bring in some buyers for big players to sell into.
I’d also expect some kind of a reaction from here.
We’re a bit extended regarding the previous move.
Anyway .. the previous reaction was weak,
The precedents aren’t favoring the long side.
But currently everything is heading south,
And that’s what truly matters. PA
Bearish on the monthly, weekly, daily.
Well that’s a bear market you know.
Intraday we’ve bounced on a strong support,
But it wasn’t enough for a reversal on a daily basis.
The break of Friday low could be real tough.
But opinions are useless …
We’re a bit extended regarding the previous move.
Anyway .. the previous reaction was weak,
The precedents aren’t favoring the long side.
But currently everything is heading south,
And that’s what truly matters. PA
Bearish on the monthly, weekly, daily.
Well that’s a bear market you know.
Intraday we’ve bounced on a strong support,
But it wasn’t enough for a reversal on a daily basis.
The break of Friday low could be real tough.
But opinions are useless …
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We have three weeks in a row with a negative net change trading from the high to the low. This happened 23 times since 2005. The following fourth week:
- traded below last weeks low 55 % of the time.
- closed negative only 32 % of the time. The largest being down a whopping 6.98 %. This was in 2009.
- closed below last week's range only 18 % of the time.
If this data have any value at all, it does suggest some caution against shorting for larger moves next week. We might be a bit oversold short-term and could be seeing some consolidation before the next major push.
- traded below last weeks low 55 % of the time.
- closed negative only 32 % of the time. The largest being down a whopping 6.98 %. This was in 2009.
- closed below last week's range only 18 % of the time.
If this data have any value at all, it does suggest some caution against shorting for larger moves next week. We might be a bit oversold short-term and could be seeing some consolidation before the next major push.
The macro environment is weakening and there seems to be now structural socio economic issues, suggesting expected Fed accommodation in 2023 may underwhelm. My trucking load board hit a high of 125,000 uncovered loads in January. Last week, it averaged high 50,000. I estimate that loads above 70,000 represented supply chain issues and current numbers represent additional capacity and diminishing load availability as consumer demand cools for new vehicles and homes.
There are still pockets of risk takers and liquidity as been seen with some meme stocks and XLU in spite of rising average energy costs and interest rates. Liquidity is the fuel that causes stock prices to rise. Next year is the third year of a US Presidential election cycle, historically a good year for the market due to the Federal Reserve becoming more accommodative. If discretionary spending and related consumer investment appetite either continue to get squeezed by inflation or a weakening job market, or both as in stagflation due to declining productivity, we may well repeat 2007 to 2008 where small investors cashed out, not because they wanted to, but because they had to, preceding market highs right before the crash caused by liquidity drying up.
If the market is going to crash, the clock may be ticking as interest term structure seems to also suggest that 2023 will be friendlier for rates. If the market does not adjust before 2023 and 2023 disappoints, it might be a sign that things will get ugly, as in 2008 to 2009 ugly or worse. Assuming no other major adverse events, of which, there are several known possibilities, of course.
After the market crash, should it happen, I am thinking foreign equities may outperform ours as the US Dollar will weaken on expected dovish Fed policy and renewed risk taking. Foreign companies products are relativity more competitive now and many foreign equities are more favorably valued compared to the US. If the preceding idea manifests, investment outflows from the US to overseas would be a headwind to an expected rally in 2023. Assuming liquidity increases in 2023, I would imagine precious metals would rally, not that I consider precious metals being particularly cheap now.
There are still pockets of risk takers and liquidity as been seen with some meme stocks and XLU in spite of rising average energy costs and interest rates. Liquidity is the fuel that causes stock prices to rise. Next year is the third year of a US Presidential election cycle, historically a good year for the market due to the Federal Reserve becoming more accommodative. If discretionary spending and related consumer investment appetite either continue to get squeezed by inflation or a weakening job market, or both as in stagflation due to declining productivity, we may well repeat 2007 to 2008 where small investors cashed out, not because they wanted to, but because they had to, preceding market highs right before the crash caused by liquidity drying up.
If the market is going to crash, the clock may be ticking as interest term structure seems to also suggest that 2023 will be friendlier for rates. If the market does not adjust before 2023 and 2023 disappoints, it might be a sign that things will get ugly, as in 2008 to 2009 ugly or worse. Assuming no other major adverse events, of which, there are several known possibilities, of course.
After the market crash, should it happen, I am thinking foreign equities may outperform ours as the US Dollar will weaken on expected dovish Fed policy and renewed risk taking. Foreign companies products are relativity more competitive now and many foreign equities are more favorably valued compared to the US. If the preceding idea manifests, investment outflows from the US to overseas would be a headwind to an expected rally in 2023. Assuming liquidity increases in 2023, I would imagine precious metals would rally, not that I consider precious metals being particularly cheap now.
The Tuesday following labour day have an average change of -.08 % since 2006. 10/16 closed down on the day.
It's interesting seeing your stats because most seem to hover around the 40-60% range. Even if one sat at like 80%, it probably wouldnt mean much because it would most likely be based on a small data set, like less than 10 instances.
Have you come across any simple stat which is 80% or higher??
Since we're in a market correction, you should compare it to 2000-01 and 2008-09 bear markets. Anyway, I don't think these stats tell a complete picture since today's market seems much different from, say, just 10 years ago.
Yes, I posted a ton of those over the years, but maybe not everyone is paying attention.
For example here with a prediction pre-market where the odds were extremely high of a positive close and very, very high for a move higher:
ES Journal - 2021/2022
And the chart for that day by end of day here:
I just like to throw out the general statistics when I run the numbers, but if anyone thinks it's noisy or meaningless, I can stop.
Even a 50/50 or 60/40 prediction holds value, too. Especially if "everyone" is expecting something to happen and I can check and see that historically the other scenario is just as plausible.
But I do get these very high probability outcomes every now and then. The details of exactly what backs those predictions is something I don't want to share publicly, so I try to keep my cards close to my chest when posting...