Bigger Picture

The so-called Powell Put faded further this week, despite the shaming efforts of Trump, Kudlow and now also Mulvaney and Kashkari. Recession warnings are rising. FAANGs stocks continued the trend reversals we first warned of with NFLX’s 7/16 plunge, confirmed almost immediately by FB’s 7/26 plunge. “Peak QE” is becoming a more widely recognized theme, rising rates have become widely recognized, period.

Should that list — and the many other items which could be added to it — be held directly responsible for the recent drop? Markets peaked in September, fully 3 months AFTER our NFLX and FB warning shots. So, was ignoring their growing and ongoing risks responsible for stretching the market rubber band until it could only snap down as it has? It’s essentially the exact pattern we tracked in the S&Ps, my proprietary Complex Ascending Triangle (see image). First identified in March and discussed regularly on Saturdays, it has continued resolving down aggressively as the pattern dictates.

Based on the pattern’s historical tendencies, is the drop done, nearing its end, or still well under way and entering a new phase? How will we spot which, and what are the likely paths? We discuss these questions, and more, in this week’s Saturday Review…

 CLICK HERE TO WATCH

The following stock requests were reviewed in this order:
FTNT, BABA, FB, EBAY, WDC, GE, BAC, OLED, TAP, BIDU, KMI, LNG, TLRY, CGC, ACB(FF), MMNFF, MJ, TGODF, GWPH

transcript

—————– (10/27/2018 08:39) —————–
Rod David: -=-=-=-

Rod David: Welcome to Saturday Review. Please post questions and thoughts as they occur to you.
—————– (10/27/2018 09:31) —————–
ljr iPad: Rod, what’s the best email address to ask questions during the day?

ljr iPad: {post answer here please}

Bill G: gm

David B: Good Morning

ljr iPad: gm

jp: gm
—————– (10/27/2018 09:40) —————–
Mark G: gm

Mark G: is there anything in Thu high DT that requies a retest?
—————– (10/27/2018 09:43) —————–
Adam: do you have yesterday’s aft biases
—————– (10/27/2018 10:03) —————–
Mark G: 2532 low if tested may still produce a significant bounce?
—————– (10/27/2018 10:05) —————–
Mark G: event if the intent is a bear mkt

Mark G: evn if
—————– (10/27/2018 10:08) —————–
Mark G: do we have a down/up crash setup working?

David B: when the market avoids your crash template scenario have you seen where one starts right after that this is a real warning something bigger is happening? Did monday avoid this and possibly a new one could be starting?
—————– (10/27/2018 10:14) —————–
Mark G: 2532

Mark G: not Fri low

Mark G: Feb low I mean
—————– (10/27/2018 10:15) —————–
ljr iPad: stocks (earnings this week): FTNT, BABA, FB, EBAY, OLED, TAP….any levels for positions of strength/weakness will be helpful. need to leave and will watch recording. thanks

ljr iPad: BIDU too.
—————– (10/27/2018 10:19) —————–
David B: Yes that one
—————– (10/27/2018 10:21) —————–
Mark G: yes
—————– (10/27/2018 10:23) —————–
Adam: potential isolation?
—————– (10/27/2018 10:28) —————–
Adam: got it

Mark G: with Oct being a down month for all indexes how do you think window dressing plays out this time as it is likely to find more sellers ?
—————– (10/27/2018 10:30) —————–
Mark G: end of Oct

Mark G: k
—————– (10/27/2018 10:32) —————–
Rod David: re: “best email address to ask questions during the day” … Here in the chaRTroom, of course, or else chaRTroom@roddavid.com
—————– (10/27/2018 10:41) —————–
David B: WDC,GE
—————– (10/27/2018 10:44) —————–
Mark G: BAC
—————– (10/27/2018 11:02) —————–
Mark G: thx much
—————– (10/27/2018 11:11) —————–
Mark G: SIRI
—————– (10/27/2018 11:17) —————–
Mark G: thx

Bill G: thanks

David B: Thanks