Assessing the damage

  • Posted by on August 22nd, 2015 at 10:12 pm

 

It was a pivotal week even before Thursday and Friday.   On Tuesday night we sent this to our subs about the IWM:

“Most important chart for us right now:  Bullish is when/if trend-line breaks; bearish is if weekly 50sma which has been holding for 4 weeks fails.   Whatever direction it goes we think will direct the whole market.”

 

 

 wed

 

And two days later:

 

IWM (2)
Chart20150822184354

 

This was the first test of the weekly 50sma on the $QQQ and usually first tests hold, at least for a bounce.  Not this time.

 

QQQ
Chart20150822184726

 

 So what’s next?  Next magnet is the 100 zone on the $QQQ which is horizontal support from Dec-Jan, the monthly 20sma, and the test of upper trend-line channel.   Big area.

 

 

Chart20150822184750

 

 What’s pretty amazing is how cool and collected this sell-off is — what do you see here? A simple two day trend down under the 15 min/9EMA.   Makes us feel somewhat stupid for trying to go against it on Friday.

 

 

Chart20150822184846

 

 Hindsight is 20/20 and we wish we had paid more attention to this 3 weeks ago –a very clear $AAPL break-down.

 

 

Chart20150822184857

 

 However you want to analyze it the technical damage is massive on the short-term (daily) and intermediate (weekly) time frames.

 

 

Chart20150822190649

 

 

 Longer-term charts still intact — but that’s not really as much for traders rather than for investors.  We’d have to break 90 on the $QQQ for that to break.

 

 Chart20150822190859

 

 And last but not least — take a look at this chart for a taste of $SPX perspective (and the 20sma/monthly -click to enlargen)

 

Chart20150823072010

 

Support is meaningless when bear sentiment rules– we don’t think we’re there right now. Yet anyway.   Let’s see what happens on $QQQ 100 and then re-assess. See you Monday in the virtual trading turret @Stocktwits.

 

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