February 24, 2020

February 12 Historical Top

Early bear market decline or a correction?

A peak here in mib February has its own pattern as discussed in the previous MarketMap and I will comment on the future as the market extends its decline past the first full week of March, if it retains the character of a bear market beginning not a correction in an ongoing bull.

The featured three window chart seen here demonstrates a number of signals for a thinking manes trader. The weekly chart shows our OB/OS set of oscillators out of gear at the peak, which is a sell signal.  NOTE: I have seen research on this idea to its merits and will be working with my TLO partners to program up the concept for testing over longer period and across markets.

The middle chart highlights in red the  Dow futures inability to hold a breakout. Such failures are almost always dealt with harshly by the market. Hence a decline to the I-T support zone beginning at 28,053 is minimum expectations. Lastly, the Globex Dow Futures going into today’s top has a new TE#2, a set up that suggest trend-ability is forthcoming.

The bottom line is a decline into MarketMap’s next calendar COT date of March 9-10.

A number of our good traders have been waiting for the chance really turn on the heat of profit-making in a fast unfolding decline. This is based on the potential of an irregular top, in EW terms.  Such topping processes end with a new high that is part of the correction leaving way to a “C” wave decline that is a five-wave fast and furious event.

Previous publications have shown the idealized price structure, but in real terms, its target would be below the pivot of December 26, 2018.  This chart allows for such a trend event to happen, with the clear triangle in the middle of the three-wave advance, which is corrective, not in the same direction as the larger trend according to Elliott.

Supporting the premise that the recent historical highs by the majors, the Nikkei\, and the FTSE were the end of the bull, is the action of the NK, which peaked 12.16.2019. Over the last two months, it is acting as the start of a bear,  As we go into a new week the Nikkei has provided us with a new Technical Event #2, suggesting that its should test and beak below I-T support that runs from 22,026 to 22,550.

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Jack F. Cahn, CMT

Contrary Thinking Since 1989,

Copyright 1989-2020

Jack F. Cahn, CMT ContraryThinker 1775 E Palm Canyon Drive, Suite 110- box 176 Palm Springs, CA 92264 USA. www.ThinkingMansTrader.com, 800-618-3820

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