09/17/2022 Weekend Update

[Cobra]

Down 1 week, the next week has 60% chances to close up.

[Al_Dente]

Art Hill has a nice table of a few things that are in an uptrend:
https://stockcharts.com/articles/arthur ... y-413.html

[Al_Dente]

ALMANAC:
The week after September options expiration week has a dreadful history of declines most notably since 1990.
https://jeffhirsch.tumblr.com/

[merryme]

Daily view of $SPX.

The shaded green area shows the massive volume that took us to the top...contrast that with current volume (thoughout 2022) and you see that a major capitulation has not occurred yet.

The GREEN STAR shows the recent volume moving down while price is giving us higher lows. And this foretold of the move up.

Finally, the RED LINE shows a small amount of volume causing a good size move down. Upsloping support needs to hold.

[merryme]

60 min chart

Examining volume, compare the first red line showing large volume moving price down with a column of 11 O's, while 2nd red line on Friday 9/16, a much smaller amount of volume moves price down with a column of 10 O's. In other words, on 9/16 less volume was needed to break diagonal and horizontal support.

[AAT]

In the longer term, this bear market looks similar to the ones in 2001 and 1981. If that continues, the overall pattern would be something like a double zigzag. The June low would be broken during the usual September-October seasonality, a large bear market rally would happen in time for the Santa rally, and the final bottom would be next year.

The details of counting smaller waves are complicated by the fact that the Nasdaq has been the leading index and diverged from the S&P in November, but for the most part they follow the action of the older years closely. The only serious divergence was when 1981 had a triangle-like higher low in July. The waves seem to be fulfilling the same psychological purposes in each year.

An interesting point is the early 80's, the other era when high inflation collided with aggressive fed hiking, had incredibly powerful bull runs break out when the fed rapidly dropped interest rates in 1980 after the early '80 crash and recession, and again in 1982 when interest rates had already come back down and the end of the second, larger recession was in sight. Unlike 2001's slow recovery, we could see stocks rapidly rise to price in dollar devaluation when the market thinks the end of the current "totally not a recession because the government says so" downturn is in sight.

[te_fern]

Over the weekend, please take a little time to vote for Cobra, thanks: https://stockcharts.com/public/1684859/ ... /533449377

[merryme]

Definitely VOTE Cobra. It is important to "FOLLOW" Cobra if you are a member of stockcharts.com so Cobra will continue to provide this great resource for us. I think stockcharts.com puts more emphasis on the FOLLOW tally. So do both, FOLLOW and VOTE Cobra so the content continues.