Subtle Clues, Time’s Up

‘Sometimes it seems as if the market hangs in the balance by the weight of a feather.’: Wyckoff, circa 1910.

Is this the big reversal to the downside?

Before we get to that answer, let’s review two recent market pivots (including today).

A Day To Remember

Back on May 4th, the post with the same title, linked here, was to be used for reference on a go-forward basis.

The post has a linked article, whose comment section could be surmised as the bourgeois rebuke of a 78-year-old fund manager.

That manager was quoted as saying, “It’s the biggest bear market of my life”; to which the younger crowd responded with derision, effectively saying the old man’s a dolt, an idiot, a doofus and needs to retire.

Now that time has passed, let’s remind ourselves when the quote was published with the daily (IYR) chart below.

Not only did IYR, not close higher after that, it never printed higher either. It was the top of the pivot reversal, to the day.

The 23.6%, Retrace

Then we have this report just days ago, showing IYR’s price action coming back to a (very weak) Fibonacci 23.6%, retrace.

The daily chart repeated below, showed the ‘risk’ on a short position as approximately 1.04-pts (not advice, not a recommendation).

Risk Narrows Even More

As a result of today’s new daily low and lower close, one can (theoretically) reduce the risk of a short position even further (not advice, not a recommendation).

The risk is now defined as the distance between today’s close (IYR: 93.32) and Friday’s high of IYR: 93.96

A subsequent push above Friday’s high negates the short and would likely indicate a potential move to a 38.2%, retrace.

Subtleties of The Market

A lower daily print and marginally lower close (IYR down just – 0.39-pts.) does not look like anything of consequence.

We’ll see about that, at the next session.

Stealth Crash?

Lastly, we have this and especially this.

Could we be right in the middle of a historic crash and not even know it?

Of course, it’s never for sure, until it’s over.

However, if shorting opportunities are being spotted, entered, and managed correctly, probabilities are that one will already be positioned short when ‘the big one’ hits.

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

Active: Positioned short via SRS (SRS-22-01), with stop at SRS: 16.38