Posts by Rod David
The Globex open.
Overnight trading is set to resume in several minutes. You can monitor it live in the chaRTroom at the link below. It’s the first time Asian markets will have a chance to factor in Friday’s plunge. Later tonight we’ll see how Europe responds…
Saturday Review’s recording (for 9/10/16) …That’s going to leave a mark.
What led to Friday’s plunge? Was it overdone? Why might it be duplicated Monday, and to what degree? What is the alternative, and what signs will tell us which scenario is playing out? These and other questions are answered in this weekend’s Saturday Review, along with many great questions posed by attendees. And as usual, my answers are designed to include useful examples of how my methodology helps the market speak honestly to you.
The following stock requests were reviewed in this order:
FB, AMZN, NFLX, GOOGL, GDXJ, WYNN, RARE, BAC, WDC, MU, VRX, CMG, TWLO.
09/10/2016 09:27:58 David B: Good Morning
09/10/2016 09:28:01 G: good morning
09/10/2016 09:28:07 Mark Glezer: gm
09/10/2016 09:31:33 ljr mobile: gm
09/10/2016 09:40:40 Mark Glezer: is there a potential for a 200 pts day Mon/Tue?
09/10/2016 09:46:30 Mark Glezer: when NDX printed new highs on Mon, CNBC reported that FANG stocks are breaking higher, do u think is being trumped by the mkt downturn?
09/10/2016 09:54:17 Mark Glezer: does Fri action suggest that a downturn, even if interjected with a bounce will likely develop very fast?
09/10/2016 09:57:43 David B: options expiration could be influential or to early in the week for it to be a factor?
09/10/2016 10:01:53 Bill G: Would a test of lower prior highs over next couple of days become a bottom and still allow for new highs?
09/10/2016 10:03:59 Mark Glezer: Carter Worth from Oppenheimer said that
09/10/2016 10:06:39 Mark Glezer: if we rally from a gap up above 2138, would u short when we get to higher prior lows?
09/10/2016 10:10:01 David B: could a lot of the selling be discounting what the market thinks the FED is going to do and if they raise then we may rally?. or is this too far out to be looking at this?
09/10/2016 10:10:29 Mark Glezer: that’s me asking, not Carter hahah
09/10/2016 10:10:41 ljr mobile: do u think this is a short term or long term trend change? weeks/months dare I say years?
09/10/2016 10:12:52 Mark Glezer: if they don;t raise we plunge, maybe after a knee-jerk reaction?
09/10/2016 10:14:12 Mark Glezer: lol
09/10/2016 10:16:57 David B: is this wasn’t a friday what we saw could we talking about a multi session decline or friday or is this not a factor here?
09/10/2016 10:21:16 Mark Glezer: Mon gap down might just invert if we don’t gap under lower prior highs?
09/10/2016 10:21:16 David B: there was talk in the market about bollinger bands being very narrow and a sharp move was going too happen. was there anything in your work was indicating this was going to happen?
09/10/2016 10:22:09 Mark Glezer: what would be the best bottoming action Mon ?
09/10/2016 10:23:21 ljr mobile: the brexit lows look a lot like that “throat” pattern last August that we hit limit down
09/10/2016 10:27:33 ljr mobile: we tested prev years low
09/10/2016 10:30:48 ljr mobile: stocks: $wynn, $rare, $cmg, twlo
09/10/2016 10:31:08 ljr mobile: no positions in any
09/10/2016 10:38:01 ljr mobile: not sure
09/10/2016 10:38:13 ljr mobile: just relative strength
09/10/2016 10:38:18 Mark Glezer: BAC
09/10/2016 10:38:32 David B: WDC,MU
09/10/2016 10:39:15 Mark Glezer: VRX – still going to zero, maybe with mkt’s help?
09/10/2016 10:47:51 Mark Glezer: can BAC exceed 17.07 target or it’s highly unlikely provided it even gets there?
09/10/2016 10:51:44 Mark Glezer: thx much
09/10/2016 10:53:52 Mark Glezer: Bill Ackman has 10% or so
09/10/2016 10:58:09 ljr mobile: thx great review today.
09/10/2016 10:58:22 Mark Glezer: thx much
Saturday Review Link
Be sure to join us by 9:30am ET for this weekend’s Saturday Review. Click here to enter.
Yesterday’s plunge did not come as a total surprise. Last week’s Bigger Picture review (done before that Friday’s close) had noted the cracks appearing in the relationships among the three major indexes. That was all the more glaring for it appearing when markets had gapped up sharply on monthly Payrolls.
That gap up had not improved intraday. Neither had the holiday weekend, nor the Tuesday return. Then Wednesday morning formed a bearish Pivot Reversal that told us to expect a bearish context through Friday morning.
Okay, maybe Friday was a little surprising — Thursday was a narrow inside day, and Friday gapped down sharply. But the opening level did point sharply lower. And meeting its lower objective by lunch allowed plenty of time to essentially double the morning slide, back down to levels last seen two months ago.
Monday could duplicate Friday’s action. We’ll discuss the possible scenarios and their signs at this morning’s Saturday Review. After discussing the bigger picture and gaming out strategies and setups, we’ll do instant analysis of any stock charts that you request. Be sure to join us by 9:30am ET — See you there!
Post-market Wrap (recording & summary)
Friday’s session finally provided a capitulative leg, the last half-hour’s 17-point slide into the close. It was only slightly larger than the 15-point break out of the noon hour, and only slightly steeper. But any hesitation was narrow and momentary.
While capitulation is known for accompanying bottoms, that’s not usually the case on Fridays. And anyway, capitulations can form a bottom’s entry, but the bottom must still have time to form. That may be moot, since the pattern on a Friday is likelier to be duplicated on Monday — gapping down and trending down sharply.
Gapping up is possible, but not enough to reverse the trend up. Extending down could find a near-term low, or else put Friday’s decline to shame. We’ll discuss the signs for each, and their potential, at the weekend’s Saturday Review.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Capitulation?
Probing fresh lows, but only steadily.
Trending down from the noon hour’s consolidation above 2140.00 slid to 2127.00 during the bias environment. The slope was steep, but not capitulative. And that was the decision made by not bouncing out of the noon hour.
The position-squaring window broke lower, but only to 2124.25 where 1-minute RSI is diverging positively. A hold-short is compelling — as compelling as possible for a weekend — so long as 2133.00 isn’t being recovered within 3 minutes of the cash session close at 3:57 ET.
REMINDER: We DO have a Saturday Review this weekend. Details will be sent overnight.