Update: 2:451pm EST
ES 2965 could be taken out but it looks so far like the volatility low may prevail and keep the longer term top option open. Put/call is hitting 0.70 intraday so trending lower into complacency which also fits a topping scenario.
Commentary: If this next 'top' scenario has any lasting down side potential value, it should be a top predicated on optimism and It looks very much like the news is trending positive along with buyers attitude. As we continue to state, news is not the driver of market action even though it appears to be overwhelmingly so at times. The arrival of covid-19 appears to correlate with the previous large drop scenario except it was being noted at VectorSpike that all was not well in the charts prior to that event with a detailed description of what appeared to be transpiring at the time and had been for a while. We maintain that it is only the charts that will provide the true trading picture and we do not regard whatever reasons are being attached to those moves that 'seem' relevant.
For example - we do have a rough comparison with a previous virus pandemic and market action at it's onset. We are assembling that chart right now as part of an update so please check back- and here it is: note the market (DJIA) went up a good 50 percent initially, It was part of a larger megaphone leg just as we have been describing the current situation here at VectorSpike except the 1918 virus arrival event roughly coincided with a lower megaphone trend line hit close to Jan 1918 and moved up approximately 50% from there for a good 20 months before that leg topped in Oct 1919.
We agree that this is a sample of two virus events overall so statistically not a large sample. However, we think that the rarity and impact of these events levels the statistical playing field somewhat. The point that we are trying to make is that trading goes on between partners uniquely involved in the trade and what they do is only reflected in what can be seen in the charts- the reasons for those moves cannot otherwise be easily disseminated. A disciplined data movements approach will out-perform any other criteria that we have seen to date. The below is a good example of what we may 'think' is happening. Shouldn't the market have tanked in Jan 1918 like today if news theory still applied equally as well then as now? Instead, it goes on to a new all-time high after some minor hesitation!
With all of the 'crash' talk it was anticipated that a 'rolling top' would best fit the scenario to create sufficient dip buying prior to an acceleration top. In very typical fashion- a deep retrace is more often part of the 'regular' topping structure we see all the time. The previous top that was a one shot down move more or less was an exception that occurs much less often.
Also- we did note one vector that would look better with a filled gap (probably more dip buying req'd to fill this).
See Critical Long-Term Review Here
..and possible bounces/bottoms: (2/28/20) , (3/23/20)
This Information Is For Entertainment Purposes Only. Financial Loss Can Occur From Investing.
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