HAPPY BEARS CATCH A BREAK, CAN’T SAY I DIDN’T WARN YOU.

October 12th, 2014 by Leonard

HAPPY BEARS CATCH A BREAK, CAN’T SAY I DIDN’T WARN YOU

Happy bear 3 Oct 2014

 

There is a difference between warning one of a potential break in the market or issuing a sell signal. So many traders have called a top over the past 5 years only to see the bulls walk all over those predictions. So I warned. You can read about what I was seeing that caused a warning in my previous blog, MARKET STILL BOUND WITHIN THE RISING WEDGE: BULLS GAME TO LOSE.  Published September 3rd, 2014.

 

In that publication, I posted charts of the Daily ES pointing out certain weakness such as an August rally on low volume that ends with a series of Dojis that represent confusion, all contained within a large 18 month old Bearish Rising Wedge. See charts below

Double click on charts to enlarge, Then the back button to reduce

ES DAILY E MINI 09-03-14

ES DAILY E MINI 09-03-14 close up

 

The market finally broke down. Charts further down

 

 

The GLOBAL SLOWDOWN

Well it had to be something to knock the market down. Let’s see a global slowdown in the EU, Russia and China? How about a global slowdown accompanied by tapering out the last $15 billion a month from the Feds QE to end the program? That will happen this month. Or how about consumer discretionary stocks hit on a slowdown in spending? Or income inequality or political discord between various countries and all the land grabbing. Maybe it’s just a compilation of things that have put stocks in pricey territory relative to an uneven and still somewhat soggy economic recovery. Voters have a chance to choose between growth and stagnation at the polls this November.

 

The 2 charts below are self explanatory, the first being a broader view, and the second being a closer up view of the Daily ES with explanations on the charts.

Double click on charts to enlarge, Then the back button to reduce

 

 

ES Daily E-Mini 10-12 14 broader

ES Daily E Mini 10-12-2014 Close up

 

 

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Thank you

 

Leonard Novy

info@trainingfortraders.com

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