October Surprise Chart Gallery part three
MarketMap’s Historical Modeling continues lining up for a series of long bar day declines exceeding 4% into the next two clusters of COT dates.
The I-T Tidal cycles support the bearish outlook from the get-go. Except for the Dollar, the commodities, and the oil ETF, the later which I discount. The next three charts provide a clear vision of the stock market’s remaining risk from now into the end of the year and particularly the next cluster of COT dates.
As mention by email and in the LI group, the first long bar day of greater than 4% at this point sets off a series of predictable short and long profitability with the proper timing, which Volaltity Reports will provide.
On the 22nd of October, I featured the SVXY chart and said: “When the SVXY ETF is viewed through our Tidal Wave system, the strategy is now on a new I-T sell signal (see chart). This system, when correct, is correct in a big way. How that a sell signal is in place, a move to the recent low and below the low side of S-T support at 36.13 should get carry over targeting to the first level of the I-T support zone at 30.31. That is a risk over the next six to eight weeks of 16%. An equal move by the Dow would be a target of 23,562.00.”
That level may be a modest estimate. To be even more modest, the Dow chart assuming the recent gap was a “mid-way” point, that would project Dow 25,500 as the nearest target level where signs of a mini panic may put a temporary low in place.
The cash S&P chart reveals the broad market could not hold the low side of LongTerm new support, a failure-reversal, something the market treats harshly. The chart in the right window is our Firgility index that is on a cross under sell signals on October 19, a few days after the nominal peak on the 12th.
The Galleries S-t chart of the five major indices tells the same story, the setup – the pre-condition – of TE #2 that calls for a breakout when one happens to get carry over, which is exactly what happens. The market s took out the lower smooth Bollinger Bands and my group S-T support zones. The indicator on each chart only shows the DOw being near a mini panic low, but the panic index itself is not at an extreme, which leads to a comparison in the following chart,
The daily chart of the Dow for the year allows you to compare the big sell-off in the first quarter of 2020. That reveals how panic measured by TEM hit as prices were breaking down below I-T support leading to an extreme by the panic index followed by a three day counter trend before more panic sell off. The circumstances at the close of Wednesday are similar, a set up that fits the historical work done for MarketMap. More on that later.
The “Bull Market in Fear” chart shows the composite of all volatility indices holding at a higher fear level and re-asserting its uptrend as of the last few days. This year is a rare astologial event hit – the “Grand -Conjunction” – which coincidentally happened with the first quarter mini-crash. The astrological conjunction happens again on 11/12/2020 and is like a magnet of unfinished business by itself. However, that date also nests with the COT dates from other independent methods in that time window; more on that later as well once the long bar series kicks off.
The next two charts clearly show that the “fear” index is trending higher, with %BB moving toward an extremely high ranking and the same with the big eight-year base breakout by the VIX index. Lastly, traders can see flight safety in the USD, which is unexpected by the general market. It may be telling the story that all of the paranoia over the contested election may be overblown.
Great and Many Thanks,
Jack F. Cahn, CMT
A Thinking Man’s Trader Since 1989,
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