Price reversed on Q's rather violently. Price is around the median and the mean of the trend channel and the trading range. The push upwards was very strong by the demand taking charge. Now suddenly that demand isn't in charge. In case price returns down back to the lower end it would imply weakness in the overall market. In other words the inability of price to go much beyond the median of TC and TR means supply is becoming stronger. Gringo
Q's are at bottom on TR on daily and still at the median in the weekly TC. Price has been dropping for five days in a row. Sooner or later the bounce will come but over the weakness is evident. Markets are showing more and more weakness. For those with longer term stocks at least do an inventory of what the weakest ones are and when the rise comes think of reducing the positions. Market gives chances to exit but not too many. This cat and mouse game could go on for longer but the scales are tilting. When losses mount funds are forced to exit their positions and that causes massive and fast selling. Markets go down a lot faster than they go up. Six years is a lot of time for market to be in the bull phase. Eventually the bear returns and a teaches a tough lesson. Those who can preserve capital and wait for the crash can make a lot more while others pray for recovery while licking their wounds after the lesson's been given. This still could be the earlier stage of bull being over or a consolidation. That part becomes clear only in hindsight. Market has dropped for a few days but it seems so weak with so little power to turn up. This is what is strange. The bear market behavior of gap up at the open and drop in price by the close is happening more often. This behavior sucks in weaker traders and traps them when price drops. The future isn't written in stone. It's all speculation based on what IS. For now weakness IS evident and when it changes we'll change behavior with it. Surf the waves, don't try to conquer them. Gringo
All this price action is happening around the median. For easier trading just wait for the trend lines to be approached and follow the plan. Those who are shorter term and faster can attempt things here but the tumultuous behavior is more likely around the Nasty Median. Gringo
The Nasty Median is living up to its reputation. For those not into the intra-day Wild West, not participating has been less dramatic, even mundane. Staying close to the edge of the extreme is where life is safest as we are the first to know when the footing is lost. Price is again in the region known lovingly as the Nasty Median. Three major medians are converging around here. The Large rising TC. The smaller declining TC. The TR. Does it mean anything? I don't know, other than that it's more likely to be bumpy around here. With a drop like this and the fact that price didn't make it all the way up to new high, the odds have shifted towards more weakness. Could it be the beginning of the end for this bull market or another long up and down basing before a run up or a run down? Keep in mind that the Nasty Median has been rising over time as the large TC is on an upward incline. Things are increasingly becoming more interesting. It is becoming tougher to pick a direction, and as a result I'm sure money has shifted hands. There are some unhappy and some very happy people due to these movements. The middle is the place where most trades by definition take place. The nasty median seems to be staying true to its name. Many have been trained on constantly rising bull markets. Almost 6 years it shall be this March. The only thing I have learned from history is that it does repeat itself with a twist. Many are in the habit of buying the dips as price for the past half decade has been almost always rising to new highs and rewarding this behavior. The large funds are also used to this and are probably over exposed to sectors that have outperformed. As with anything else in life the party does come to an end. Those not ready for the party to end might find themselves in unfamiliar waters where not much makes sense and it all falls apart fast. I am no guru, and even I hope not to get washed away with the changing of the tide. Gringo
Whether one looks at the smaller TC or the larger, the direction is down. Price may reverse at the lower limit of the smaller channel, at the moment 98.5, and travel back to the upper limit before reversing again and testing the lower limit of the longer-term channel, at the moment 97.5. In any event, the bull market isn't anywhere near over, though it has to start somewhere. Even so, there's no more reason to be concerned about a trip to the lower limit of the longer-term channel now than there was last October.
After quite some time I am going to have a look at gold. Gold, as far as I can tell is giving mixed signals. The drop during the retracement has been a bit fast and that has put a bit of doubt in my mind as to the viability of solid demand. So we are at a location where it's possible for price to go either way. Those who are believers are going to understand this statement that price can go either up, down, or sideways! Those who are nonbelievers are going to scoff at this obviously deceiving statement. Any sucker knows price can go either up, down, or sideways, so what's the big deal about this? Isn't it just stating the obvious? Yes and no. What's important is to keep in mind that price has a context. It doesn't existing in a limbo. This context tells us that the demand did come to life albeit for a few weeks and is now weaker than the supply. Price did manage to go above its last swing high. There was a change in stride as evident by this swing high penetration. This is also visible if one uses the solid supply line as a clue (the derided and woefully maligned crutch). Those using SLA can clearly see the line broke and can wake up from their slumber. No need for elaborate number crunching or advanced thinking. Price broke above the line and is now retracing the path back down. I must be the only genius around to see this phenomenon of utmost importance. To be truthful I find this a bit boring. Those days when I could recall the multiple reasons and handle the conflicting arguments whether to go long or short and when all in my head. I could discuss the merits of Fed intervention in the markets and global turmoil due to Ukraine and Russia and USA war mongering. And now compared to all that, just one straight line. Nothing to talk about. Nothing to say. Just one damn line. My ability to wow audience has materially reduced while my trading account has materially increased. Despite all this I do feel less intelligent. I don't have much to say. I'm beginning to forget the old theories and logic of things. Simplicity is the norm and in the evening I now watch cartoons to please myself. Back to price again. From here price can plop down and continue down, spend time going nowhere, or start pushing back up. The faster drop is a negative development and I tend to become cautious when this behavior shows up. Nonetheless, if price turns up I could choose to enter and not go heavily in based on this somewhat weaker behavior by demand. The price behavior is giving me a clue and I can use it by reducing my risk yet still participating. So far we haven't seen any sign of emergent strength so there's no reason to enter. The thing to do here is to watch closely, very closely. Based on the price movement, GDX appears to look relatively stronger so far. Gold Futures Weekly GLD Weekly: GDX Weekly Gringo