BachNut special Sunday edition.
What a week!
I knew Pac Man could rip though the target stack pretty quickly, but I figured it would take more than a few days and include some bounces.
Even the 200 day MA offered scant support (about three hours of consolidation...).
Not much to add to last week's post but here are a couple of points:
The market generally doesn't like to make a low on a Friday.
Perhaps there will be some intervention or an event, but left to its own devices, odds are descent for Friday's low to get tested/bested before a bounce.
There happens to be one last nearby down gap target at SPX 2847.11.
It would be technically nice to close that before a bounce, but it doesn't have to happen.
Friday's volume showed some capitulation.
I figure last week liquidated over-levered punters and players. Patient longs are still in and need further deterioration before they drain the tub.
Some other comparable instances of capitulation volume (December '18 low is on chart) show another day or two of weak trade before a rally.
Let's see what happens this time. In any case, it is time to watch for bottoming behavior.
Friday's close was strong, but I figure a lot of shorts wanted to go into the weekend flat.
Much of the move to the high occurred in the last few minutes of trade.
We'll see on Monday if shorts reload, or not.
With the NYMO in the oversold zone, odds are for a bounce to commence some time this week.
However, as noted before, crashes can happen from oversold. So, there are lesser odds that should not be dismissed for things to get ugly.
Bigger picture. A rally that recovers the 200 MA and then rolls over to make new lows would trigger patient long liquidation.
The December 2018 low was never tested. Maybe that is on the agenda for this year.
I am flat.
The big gap last Sunday left my swing short setups at the alter. Truly a bummer as they would have made my year, but I don't chase and have the scar tissue to show why.
Volatility is also extreme making it hard to position for a swing on the fly.
So, I have been working day trade setups since mid-week. It is not my cup of tea, but the intra-day moves are big enough and trendy enough to justify.
I plan to continue that approach this week, but will try to end up with some runner longs that could collect on a bounce.