Thread: P&F Chart School

Originally Posted by James48843

By the way- I've never seen a 34 square "long tail" down on the S&P 500 before.
In my life.
I'm 48 years old.
I guess if you live long enough, you see something new all the time, eh?

I'm in at 880 - d$#m the nukes. If it's worse that 880, then say a good word about me to the all-powerful being who requires my presence soon.

G.F.L We all need it.

Originally Posted by James48843

Let get real her. We're sitting -14% below Oct 1st's level, and we're only at the 4th trading day of the month.

Most months, even in down cycles, NEVER finish more than -11% down. And those are RARE events.

The one exception was that big crash of 1987, which this IS NOT.

That year October was down -21 %. Followed by -8% more percent in November 1987. But this IS NOT 1987- not even close. Everything is happening in slow motion this time- and it is much more like 1929-1932 than 1987.

Every other month since 1950, we've had AT MOST an -11% decline in a single month.

October historic, down months 1950 to present:

Down Years
2005 -1.77%
2000 -0.50%
1997 -3.45%
1995 -0.50%
1990 -0.69%
1989 -2.52%
1987 -21.76%
1984 -0.01%
1983 -1.47%
1979 -6.75%
1978 -9.16%
1977 -4.34%
1976 -2.22%
1973 -0.13%
1971 -4.18%
1970 -1.25%
1967 -3.53%
1957 -3.98%
1955 -0.35%
1954 -1.89%
1951 -2.26%
1950 -0.81%

2008=?

Source: http://www.moneychimp.com/features/monthly_returns.htm

So the only question remaining now is - when to jump back in?

Is it time yet?

Answer that- and we'll see.

OK- I capitulate-

I said two days ago that this was NOT 1987. We were 14% down, and only once in the period of 1950 to 2007 did we have a month GREATER than 11% down, and that was during the crash of 1987.

I will note here and now, for the record, that this is now the 9th of October, and we are now down, officially, -21.90% for the month of October so far. Therefore, we have officially exceeded the decline that was the 1987 crash.

Where do we go from here? If we went flat- exactly sideways, for the rest of the month, we would have the worst month since the depression.

If history is any indicator (I guess we should stop saying that, eh? History is not proving to repeat itself) then we could expect to go higher before the end of the month. After all, conditions are not as bad as they were in 1987, now are they? Are they?


I give up.

I need to go pet my dog, hug my wife and son, and enjoy what life I DO have.

Attachment 4854

Jake doesn't care what the market did today. He still wants me to play tonight.

Just in case you were curious- a couple facts tonight.

1. S&P volume hit 6.8 billion shares today. Pretty good, but not anywhere near a "capitulation surge" in the traditional sense. I would think something more like 10 billion shares trading is what it is going to take to signal an end.

2. the VIX hit over 64 today.

I've NEVER seen it over 50 until this week. And I've NEVER seen it hit 64 before.

And what is worse, according to the VIX P&F chart, the expected top "price objective" for the VIX is going to be 88.

Attachment 4857

Karl Denninger is talking numbers whose names I dare not put into print myself-they are too horrifying, yet his logic is compelling. If you want to see for yourself, take a walk through his editorial from yesterday and then read todays. Both are posted at http://market-ticker.denninger.net/

I cannot say a thing. Speechless.

Opened and dropped over 7.7% in the first ten minutes of trading. Volume over 25 BILLION traded in the first ten minutes.

Attachment 4858

Attachment 4859

Another shot in the endless debate:

"Whenever you hear words like ‘overbought' or ‘oversold' or ‘momentum' or ‘support' or ‘resistance,' it means that whatever you're hearing is garbage. But it also means that the person you're listening to has no idea what's about to happen, and is therefore resorting to the financial equivalent of astrology."

http://finance.yahoo.com/expert/arti...ockblogs/90717

Today's, Monday, 10-13 P&F Pattern - "Long tail Up." Wondering what this suggests?
Retracement? --Or when would a new P.O. come about?
VR
Attachment 4881

Originally Posted by hessian

Today's, Monday, 10-13 P&F Pattern - "Long tail Up." Wondering what this suggests?
Retracement? --Or when would a new P.O. come about?
VR

I have no idea.

This one is so far out of historic data, I am not even going to hazard a guess.

I am looking seriously for a good spot to jump out. I've used up my two moves already this month- so I would only have "G" to go to until November, and I am not happy with that prospect.

But I am setting aside any P&F chart work until things calm down. It simply doesn't work to try and make technical interpretations on moves of 10% during a single day.

Ya know what I mean?

I'm not even going to try.

Your guess is as good as mine. I HAVE NO IDEA where we are headed- higher or lower.

Originally Posted by hessian

Today's, Monday, 10-13 P&F Pattern - "Long tail Up." Wondering what this suggests?
Retracement? --Or when would a new P.O. come about?
VR

Thanks James! It sure is an interesting chart though! Completely understandable. Current events are rare, even historic (I heard that today's jump hasn't been seen for 70 years!)
Even Stockcharts P&F "Chart School" doesn't seem to give any clues, either...
http://stockcharts.com/help/doku.php...ort:pnf_alerts
But, hope you'll keep going on lessons - we got to get back to some market normalcy before too long!
VR

For what it's worth-

(And these days, I am not counting on what it's worth- it's too wild of swings for my taste)

The swings now appear to be showing lower highs and higher lows.

Attachment 4924

If history repeats it's trends, we'll fall down to around the 875-880 range here on the downside, and then move back north again to the 970-975 range.

These are some pretty classic formations forming here, although the width of the swing is HUGE compared to normal swings. Therefore, I would NOT recommend trying to catch a wave....you could be underwater for a long time if the tide goes out.

Kind of like a rip-tide, no?