Last 24 Hrs

This is the last post I'm doing and then I'm going to bed. It's 3:36 am and normally I'm awake 5-6 am (I'm a natural morning person).

I was attempting to figure out from economic news why there was about a 30 pt drop yesterday in the market, and I couldn't figure it out. News was good. Maybe it was something else.

Honestly, I'm not a news driven person, as I don't have time to keep up with all that as I attend to my children, business, and personal stuff. So, with this chart, technically, I evaluated what happened yesterday.

About 24 hrs ago, the market was moving up in price action while RSI was moving down. This signifies Bearish Divergence. With the shooting star candlestick pattern, that signifies a potential reversal. Another indication is the bearish volume RELATIVE to the previous volumes, was significantly higher. Yes, this is premarket. Also, MACD on the bullish side was weakening. This signifies a weakening in the bullish trend and one should be cautious as to when a reversal is going to happen.

If you were trading during this time, the stop to get out of this trade could be @ 923 or just below that. I've noticed that on fairly steep up or downtrends, the market uses the 10 EMA as support (or resistance if going down). On less steep up/down trends, it can alternate between the 10 and 20 EMA.

As the markets open, there is a steepness as things begin to tank. The numbers for initial claims came in a lot better than expected, yet the market tanks. Buy on rumor, sell on actual? Maybe people just taking profits?

I didn't get a chance to further annotate this chart as it would've been really messy, but follow me down. The 8-8:15 am MST timeframe, it bounces on the 200 EMA of this 15 min. chart. Is this a reversal? Looking at volumes, bullish volumes are decreasing as price goes up, so this means there is no strength in the bullish move, so it's most likely a retracement, which that is what it turns out to be.

It tags the 10 EMA and begins to head down again for the next run down. Bearish volume is much stronger than bullish, HOWEVER, it's not as strong as earlier that morning, meaning the profit taking could be about over.

At 10:45 am MST, there are 4 candles that have approximately the same range. Testing which direction they want to take. One more attempt at 11:45 am MST to see if they can bring in more buyers. Bearish volume strength is still more than Bullish, but in MACD, it's weakening in bearish and this cycle of a push down is far weaker than the intial -- making this further confirmation that sellers are losing strength.

We get an inverted hammer, which has a 62% reversal statistically. So, most likely a reversal but not a sure thing. They spend the next 15 more minutes testing for both buyers and sellers. We are now in bullish divergence on the RSI, weak bearish MACD. Overall closing prices are higher, which does not match with volume in terms of bear strength.

At 12:30 pm MST, let's see if in the last 45 min. they can bring in buyers. Bullish volume is increasing with price action, however, bearish volume is STILL stronger.

At 12:45 pm MST, we get a very LONG hammer, which is a statistically less of a reversal signal with 44% reversal possibility, less than half. The long tail signifies a last ditch effort to see if there are anymore sellers, and it seems they cannot as price action continues to move higher.

So, if they can't bring in sellers, what do they do? Go UP! Bullish Volume now supports price action, as there is strength in both. It's now starting to reverse to the upside, MACD bullishness is gaining strength, and it confirms the bullish divergence seen earlier in RSI.

The close of the 1 pm MST candle is an inverted hammer, which is now 3 reversal candles and we can now assume this IS support. MACD continues to be bullish. Candles are mainly now marching above the 20 EMA, minus 2 candles.
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