Historic streak of 109 days comes to an end. What now, DOW?

J

joezapp

And what a streak it was! Longest streak of not having a 1% down day in nearly 1/4 century, and just the second in nearly half a century. For us longs, the cup runneth over. The last time we experienced a down day like this was Oct. 12. We were all over it in my thread of Oct. 11, here...

https://www.elitetrader.com/et/threads/big-day-for-tech-analysis-triangle-broken.303505/

when I posed the question "Will this be a double- bottom just below 18000, and then off to the races? Or will we break below that support level to correction territory?" The answer was the former, in resounding fashion. I followed that up with this "Breaking News" thread on Oct. 13...

https://www.elitetrader.com/et/thre...-triangle-broke-now-the-support-broke.303558/

The support broke briefly that morning, the first day of the historic run, and ultimately reversed and became the beginning of the upward trendline that we longs have enjoyed for the past 5 1/2 months. Maverick74 is still waiting for someone to deliver him the "breaking news". Meanwhile, many of us in the discussion saw the enormity of the time period in the markets, and were ready to pounce on it. Triangle patterns are not to be ignored. Neither are double-bottoms that ultimately hold.

So the record run is now history. The truth is the market has been slowly breaking down since March 1. However, who would've thought after the higher open yesterday that by the close it would be the streak-ending day? Interestingly, the Nasdaq, which closed down 107, actually hit an all-time high in the morning. The market can and will turn on a dime.

I see more turbulence ahead in the near term, but I have no interest in going short the market at this time. (Maverick74, I'm still weeks away from taking a short position in the market. Hope that's OK with you.) What I AM interested in is when the April rally will begin. Some years it's middle April, some years it's early April. It could be the difference of a few percentage points, so maybe some technicians out here can nail it. Also, sometime following the April rally would be a corrective phase. It began 3 consecutive May 1sts earlier this decade. Sometimes it doesn't happen until June, like last year. Maybe some technicians here will have a view on that as well. I realize it may be too early to gauge it, but feel free to post on this thread if and when your tech analysis reveals a shift or signal. My ability in this area is limited to seeing trendlines, triangles, and gaps in charts. I'll post when I see them, as I have done before.

For the record and for starters, noted chartist Sandy Jadeja is very concerned about market volatility to the downside coming May 11. He saw a smaller signal for March 13. Perhaps correct but a little off with the date on the March signal. You can read the article here:

http://www.marketwatch.com/story/cr...o-14800-and-todays-a-date-to-watch-2017-03-13

Please stick to technical analysis in this thread. Best wishes for successful trading to all!
 
Honestly, no wonder only the select few make all the wealth in the financial markets, it's not complicated. The Dow had to fundamentally roll over these past months, and now the technicals need to do the same above 20k, ideally with a new high over the next month or two, but never underestimate the stupidity of politicians and elites.

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For retail the institutions and hedge funds are voodoo, funny how I find it simple but that's credentials for you. Talking with a friend of mine who trades commodities from our banking days, all the whipsawing and hindsight analysis when the answer is there in advance.

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So much noise and so little understanding at retail, keeps the forums busy though.
 
It was historic - but it was not the longest of largest run without a 1% down day.

Source - Traders Almanac. Note - the tail end of March is often very volatile. April is the best Dow month on record historically. The tail winds of seasonality may push this higher. Many global indexes have made multi year highs this week.
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I agree, birzos, that we will reach back into record territory in April. Seasonality and the earnings push will get us there.

comagnum, thanks for the post! I saw a version of that chart that conveniently omitted the "3-months after close" portion. It made it appear that any way you looked at it, the market was higher. It DOES make sense that the 3-month period would take a breather. I'm going to bet with confidence that June 21 the market will be lower than it was on March 21. I'll likely open that play late April. Also, I'm familiar with the tail end of March weakness. Thanks for reminding us! This recurs due to a lack of earnings, as well as accountants calling, and it sets up the April rally. I had option orders in early this week to buy VIX calls, but the spread was wide and I didn't get executed. I did make some money selling VIX puts, though.

Thanks for the links, dealmaker! That Michael Batnick article was right on. The non-financial media makes headlines when there is bad news and the market is tumbling, but when the market is doing fine you hear nothing from them. Then one day, and seemingly out of nowhere for those uninformed, they hear "The Dow hit an an all-time high today". Reminds me of a day in February 2013, when I was trading in a library. A librarian noticed me working hard at the "cash register", and said "The stock market is doing bad, huh." I surprised the heck out of her when I said, "That's not true at all. It's actually doing very well." She opened her eyes wide and said, "Oh, I guess my accountant will have good news for me when I see him soon". This is a prime example of how the non-financial media's reporting, and then not reporting, on the markets affects people who are in the market passively.
 
recession2016 said:
how about a 109 streak of declines from here? the only thing the democrats can do to get back into office is to crash stocks
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Too bad ''OCT is a bear killer'';
i dont have a problem with the [Stock Traders Almanac nickname] '' OCT is a Bear Killer''. Bears tend to hibernate, but polar bears do not hibernate .
 
As a follow-up from my first post to the question of when the April rally would begin, I believe the 50-day moving average didn't hold this morning. I also believe it was due to the final sales for "accountant's call". I pounded UPRO at $93.56 this morning. Past history has shown that you have a rush of late sellers a few days before tax deadline in the A.M. The strong April rally is imminent, and it could already be underway. In case it's still in waiting, I placed more UPRO orders just above $91.

I'd be interested to hear what technical analysis is showing as far as a prediction for the timing of the beginning of the April rally, as well as where the rally will take us. Will the S&P clear the 2400 hurdle with legs, or will it merely succumb to the resistance at that level?

As always, please keep this thread to technical analysis and charting only. Thanks, and sincere best wishes for profitable investing!
 
joezapp said:
As a follow-up from my first post to the question of when the April rally would begin, I believe the 50-day moving average didn't hold this morning. I also believe it was due to the final sales for "accountant's call". I pounded UPRO at $93.56 this morning. Past history has shown that you have a rush of late sellers a few days before tax deadline in the A.M. The strong April rally is imminent, and it could already be underway. In case it's still in waiting, I placed more UPRO orders just above $91.

I'd be interested to hear what technical analysis is showing as far as a prediction for the timing of the beginning of the April rally, as well as where the rally will take us. Will the S&P clear the 2400 hurdle with legs, or will it merely succumb to the resistance at that level?

As always, please keep this thread to technical analysis and charting only. Thanks, and sincere best wishes for profitable investing!
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depends on earnings outcomes this month with AAPL, AMZN, etc

also french election and debt ceiling next month
 
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