Dow, S&P, Outside Down

So, this is it?

As this juncture (11:06 a.m. EST), both the Dow and S&P have key reversals; and now the QQQs, and Russell 2000, have just joined them.

If they hold and decline from here, reversing from all time highs, we can add that data to our empirical “Holiday Turns

Holiday turns … markets tend to reverse just before, during, or just after a holiday week.

In the biotech arena, this morning’s gap higher (IBB) closed the distance from price action to the stop for inverse funds BIS and LABD.

That closure opportunity was used to increase the short position (via BIS) in one of the managed accounts.  Not advice, not a recommendation.

The IBB bearish divergence is beginning to take shape.

Positions:

Note: “Close” prices as of 11:03 a.m. EST

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.

Before The Open

In the pre-market (8:52 a.m. EST) action continues to grind higher.  Both the Dow and S&P have posted new highs thus negating the Holiday Turns scenario … but not by much.

Important to note is each market continues to post on the underside of a long-term trend-line.  The Dow chart (DIA) is farther down this post.

Also added to the chart is the dashed trend-line underneath the recent price action.  A wedge is being formed; typically last stop before reversal.

In other markets, looks like Biotech may continue higher but along with the others, action appears labored.

The short position could be stopped out at the open. 

This area of price action is where cost of being wrong is least.  We’re at The Danger Point.

Update: 9:04 a.m. EST: Both AMGN and MRNA have now posted lower in pre-market.

Stopped out does not mean there’s no opportunity.  The bearish MACD divergence is still there.

If IBB continues higher, the original ‘150’ target is back in play.

The market extremes are still there:  Bonds and the Dollar are short the most in history.  Stretched all around.

It’s not unreasonable to expect several attempts to position short.

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.

June 5th, 2008.

That was the day where the bear market began in earnest.  After that day, it never looked back. 

The final posted low was 666, on March 6th

Let that sink in for a while:   Six-six-six, on the sixth.  There is much more going on than the general public realizes.

We wrestle not with flesh and blood …

Getting back to that day on June 5th, those old enough will remember the market had been trending lower for about three weeks.

Then, on Thursday the fifth, there was a huge rally.  The S&P moved up over 2% on the day.

This rally as it turned out was just short covering.  The next day, price opened gap-lower and moved swiftly lower to new daily lows.

The move down was about -3.5% on the day.  There was no denying at that point, it’s a bear market, potentially a crash (which it was).

Is that same scenario what just happened today, Friday?

Looking at the analysis that Sajad put out on August 15th   He showed “there’s one final move to go”: Time stamp, 5:20

His quote is shown on the chart.  Indeed, the Dow 30, the DIA, had one more move to go before reversal.

If the coming Monday, opens gap lower and posts a new daily low, the market is performing in a way that’s similar to June 5th of 2008.

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.