Deja Vu Too

in 2021, I noticed some patterns on both the BTC chart and the QQQ chart.

Now these patterns are happening again on both charts.

Last time, they didn't confirm. The market bounced back up.

It bounced in mid-Oct 2021 - when the fourth stimulus check hit people's banks while a ton of extra unemployment benefits were given to people.

I'd say it was a coincidence, but I don't believe in those.

One possible explanation was that the fourth check and benefits went into the market (just like a lot of stimulus money did). If that's true, it could have stopped the crash.

This time around, there is no stimulus money coming, benefits are pretty much back to normal, inflation is up, the market is down and the Fed is done helping the market.

Buyers have to show up somehow if this mess is going to get cleaned up.

The inverted cup and handle is in no way confirmed at all yet. I'm posting this so I can easily track the thesis on a chart and check to see if it does confirm.

If it chops around (for up to a month) around the $342-$348 range and then makes a bonafide move down past $335, the pattern is confirmed and you should grab your helmet.

Note

Still range bound. Still calling this a possibility.

Lots of volatility, owing, in part to the massive decrease in the liquidity of the market.

Price action still shows a tug-of-war between seller anxiety and dip-buyer enthusiasm.

Anecdotally, both seem very extreme. When people sell, they're selling a lot out of fear. When people buy, they're buying a lot out of greed (and FOMO).

I mean, FB went down 60% in three trading days. And SNAP went up 94% overnight. These are not normal moves.

Market sentiment aside, I'm not seeing anything positive in charts (with the exception of BTC), earnings are coming in like warm from lots of companies (the focus on 2022 by investors is apparent).

Most telling is what we're seeing in the economic data coming in. Not a lot of good to be found.

- jobs payrolls report came in EXCEPTIONALLY high. But it was ASJUSTED payroll so the numbers are totally over exaggerated.

This report even surprised the White House who had told people to expect a low payroll number because of Covid.

Not even the President can navigate this market. Lol.

- consumer household debt has risen at the fastest rate it ever has since 2007 (lead up to the 2008 crash - not that I've researched if it's actually a correlation and why). Most of this was mortgage debt.

So that could mean people are over leveraged. Which isn't good if inflation continues and/or jobs start to falter. Could soften the housing market.

It almost certainly means that consumers will reduce discretionary spending if the economy contracts... which will then cause the economy to further contract.

Everyone is talking about interest rates in an anxiety fueled debate, wondering if the Fed will make the interest rate hike..5% instead of .25% or tapering the balance sheet faster.

But we know that's going to happen. Institutions have a plan for it.

What no one is talking about is employment being shaky (unemployment came in at 4% instead on 3.9%), the decline in sales, conservative or dim looking earnings reports, abundance of inventory of goods spiking while people still think supply chain is the problem for sales.

The real problem is that the goods are too expensive to consumers.

Jobs, profits, prices.

They're all declining. Not in a big way. But, if the trend continues down, that means we're in a recession.

And, right at this inflection point, we have a guaranteed rate hike coming in which will further restrict spending.

Massive inflation could whipsaw into a recession pretty fast.

Makes sense. Everything about the last two years has been completely extreme.

Note

Obviously not a neat, contained clear handle - quite steep up, but this thesis still holds for another 2-3 weeks of wait and see.

Not confirmed unless it drops down under $340.

If it punches above $370 and finds support, it may climb to $380. Which could be the start of a right shoulder if it descends there.

If it breaks $380, I think we're out of the woods.

Note

Still chopping away, making up its mind.

Shape is a little more clean for a handle now. The volatility in this market is crazy. Even when things trade sideways, it's at an extreme.

Note

Holding around $141. Pattern may confirm if we see price continue to erode.

Note

Well, a handle usually lasts up to a month so we're in keeping with the right timing if we drop.

Because I think Putin just pushed it over the edge. Futures look like he has. We'll see how tomorrow goes.

My guess is we will be under $340 tomorrow. How far down we go and can we swing back up?

So the prediction is looking good.

The markets are looking just awful. The DAX triple top confirms if it continues to decline today (which I imagine it will).

Global markets might just implode.

Note

Calling this confirmed.

See you at the bottom.

Note

Bottom still not here.

Probably close. But not there yet.

stockpreacherman

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