Bearish Pattern coming in 9/20/19
Updated
*** Disclaimer - This is my first published prediction. I've only been studying charts for about 4 months, so I wouldn't put much weight to this. Oh, this is not trading advice. Do not use this as a strategy. ***
With the political climate coupled to sound recession indicators alarming and a correction to the job growth data for the year, I think a Head and Shoulders pattern was just formed. The accuracy of a head and shoulder's pattern in predicting a bullish to bearish reversal is *supposedly* quite accurate. With the trading for the week closed out for the day, this loss would be a confirmation of a reversal for the right shoulder (also making it an evening star pattern).
I can foresee variability in the pattern due to artificial stimuli (tweets) boosting the market if occurring in tandem in the latter part of next week.
Hope no one loses their revenue streams at a time when working for a living is no longer an option.
Best wishes.
M
With the political climate coupled to sound recession indicators alarming and a correction to the job growth data for the year, I think a Head and Shoulders pattern was just formed. The accuracy of a head and shoulder's pattern in predicting a bullish to bearish reversal is *supposedly* quite accurate. With the trading for the week closed out for the day, this loss would be a confirmation of a reversal for the right shoulder (also making it an evening star pattern).
I can foresee variability in the pattern due to artificial stimuli (tweets) boosting the market if occurring in tandem in the latter part of next week.
Hope no one loses their revenue streams at a time when working for a living is no longer an option.
Best wishes.
M
Comment
Reports of worst contraction in 7 years of Eurozone manufacturing activity published on Monday, Sept 23rd.Comment
Report of decrease in consumer sentiment index. Large hedge funds are stocking up cash. Political turmoil noise as well. Might have sealed the deal for continued decrease.Comment
Political turmoil has turned into impeachment proceedings. I'll go ahead and assume this downward trend will continue through the next couple of months, if not longer, kicking off the start of the 2019 Recession.Comment
I'd like to make a correction to my previous comment - impeachment proceedings require a house wide vote, which hasn't occurred yet. But, the political fervor over the most recent developments could lead to an actual vote. That being said, I'll move onto my next update, which is that the economic data posted this morning supports, but does not confirm, that there is a significant slowdown in the American economy's growth. As such, this reinforces the accuracy of my previous comment of the downward trend continuing.
Comment
As I have linked below, the ISM manufacturing index has indicated recessions based on dipping below a 44.67 level. This measurement is due for update on Tuesday Oct 1 at 10am (est).Comment
The economic data released this morning included a decrease in consumer spending. While modest, this metric might be the most important of those released today. Multiple independent publications have cited the strength of the American consumer as the fuel that drives the economy. If they (consumers) pull back, manufacturing pulls back, and corporate earnings pull back this combination would result in continued downside movement in TQQQ.
Trade deals at this point may actually not matter given the length of time necessary for their negotiation, finalization, and implementation. Even those expected to already be agreed [USMCA] upon are likely to be held up for congressional approval due to the current political unrest.
With that, I'll likely end updating unless a true reversal signal with substantial, supporting economic data manifests.
Comment
With the continued downward pressure, I'll end my commentary with the confirmation of the weekly bar. Good luck out there. Thanks for reading..
Comment
The following week saw a whipsaw of activity. Bad news is good news was one suggested explanation to the volatility. With the weekly bar posting today, it's quite possible that the combination of an arguably positive job, increased prospect of a rate cut at the end of October, and President Trump seeing a "very good chance" of a China trade deal (skeptical) would result in a reversal to the topside.
I see this as a temporary movement that won't endure, but I haven't concrete information to support that statement. The Russell 2000 posted a death cross yesterday, which if true to serve as a repeat event predictive of the 2008 decline, might give support to this opinion.
Either way, I'm still short on TQQQ (via SQQQ).
Comment
Further analysis of the other market indexes in the US and abroad increases my confidence that this bar is an outlier in comparison to the rest of the market. All other major indexes show a global decrease for the week. That being said, remaining with the current strategy will continue to yield.
Comment
tradingview . com /x/suS351hx/Might not be a coincidence...
Trade closed: stop reached
Broken shoulder.
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