September, 1929

The stock market peaked on September 3rd, 1929, the Tuesday after the Labor Day weekend.

Labor Day for 2020, is Monday, September 7th

The bond market has posted a double top and reversed.  Rates are moving up.

Now, the stock market is stretched, extended and rates are rising; similar to August 1987.

Antique-Ticker-borderThe problem is, it’s similar by an order of magnitude or more.

Remember in the most recent downturn, there were trading halts, brokerage server blow-ups and customer accounts going completely off-line.

In that situation, if someone is long and expecting to beat the herd on the way out, good luck.

The firm sponsoring these updates and analysis stopped trading the (equity) long side of the market years ago; recognizing at any moment, the entire system could break-down with any open positions effectively locked.

If there’s another large break with orders, positions, accounts ‘trapped’, for hours or possibly days; who wants to be on the long side of the market?

Downside Leader

Two months ago in this post, the idea was floated that biotech, IBB may be the downside leader.

It certainly didn’t look like it at the time.

Biotech even went on to make a new high … potentially negating the theory.

shutterstock_146355983It’s different now.

After that new high, IBB has reversed and is trending lower.

On the other hand, the overall market, S&P 500, continues its push upward.

It’s within 1% of all time highs.

Pre-market action as of this post, has the S&P opening up about 0.4%, higher … ever closer.

At this juncture, biotech has hinted at downside leadership.  That hint my become a solid fact if and when the S&P has a decisive downside reversal.


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.

Upwards, Sideways & Down

Fotosearch_k8916628-1That’s the direction of the Dow Jones 30, the S&P 500 and the Russell 2000.

Intermediate and advanced trading professionals understand what this means.

When a market has experienced a long, sustained advance that may cover months and years … near the end of that advance and just prior to the ultimate top, the market thins out.

That’s the process whereby fewer and fewer stocks are participating in the advance.  Essentially, the bear market has already started as more and more stocks fall away from the uptrend.

In fact, ZeroHedge just reported the S&P 500 in its narrowest (11-day) closing range in history:  An unprecedented event.

Now that we appear to be at the upward extreme, what happens next may be unprecedented as well.


For technical analysis on individual stocks, markets or indices, please visit our parent site at


“Buckle your seat belt Dorothy ….

’cause Kansas is going bye – bye.”

If there’s a spot for the market to reverse, this is it.



With markets at stretched, bloated and obscene valuations (as reported by David Stockman), we even have an article that tells us the bull market is just getting started.

Well, anything can happen but false narratives abound at the extreme end of a trend.  A ‘new bull market’ could very well be false.

In depth technical discussions of the S&P and other markets are on our corporate site located here.

The bottom line is, we might already be on the ride … to much lower levels.


Charts produced by TC2000 which is a registered trademark of Worden Brothers, Inc., P.O. Box 1139 Wilmington, NC 28402.  Ph 800-776-4940 or 919-408-0542.




Coiled Spring

While the market looks dull, it’s actually coiled up like a spring ready for its next move.

The best analysis we have found thus far, is the quote below.  The analyst states that price action looks like a pendulum swinging down to rest.  We’re in a brief period of dull market activity.

“These dull periods often occur after a season of delirious activity on the bull side.  People make money, pyramid on their profits and glut themselves with stocks at the top.  As everyone is loaded up there is comparatively no one left to buy, and the break which inevitably follows would happen if there were no bears, no bad news or anything else to force a decline.”

Indeed, it’s an excellent assessment of the price action in the S&P as seen below.


The problem is, that analysis was not written this past Thursday or Friday.  No, that assessment was written over a century ago in Wyckoff’s seminal text:  Studies In Tape Reading.

To understand the present, we need to understand the past:  especially with stock market activity.

The human condition has not changed since inception.  There’s no new ‘quant’ program that has it all figured out.  If that were true, price action would look different.  We would not be able to use century old techniques to call market turns to-the-day (repeatedly) as detailed here and here.

The only media mention of Wyckoff that we’ve ever seen is a brief reference by Linda Bradford-Raschke (former pit trader) at this link.  At time stamp 0:36, she mentions Wyckoff.  It almost slips by for those not attune.

  • If the pit traders know where to go for guidance, should we not do likewise?

As we come forward one hundred years, we see the S&P has coiled itself like a spring.  For the past seven-plus years, it’s been delirious bull market activity as Wyckoff stated.

Traders and investors have continued to gorge or force themselves on every last up-tick.  The market has now come to rest apparently unable to move higher.

What new catalyst will come to the fore to launch to higher levels?  It could happen:  However, the most probable resolution of this formation is a move to the downside.


Wyckoff quote from Studies In Tape Reading.  Used with permission from Cosimo Classics.

Charts produced by TC2000 which is a registered trademark of Worden Brothers, Inc., P.O. Box 1139 Wilmington, NC 28402.  Ph 800-776-4940 or 919-408-0542.