CHARTS FIXED! 9:05 PM
OK, so I don’t have a very clever title or stupid symbolism or word simulations tonight. It’s late, I have two reports to try to finish for subscribers, and I just had a big fat roast pork sandwich au jus with melted provolone, sauteed onions, pickles, and sauerkraut, and I want to take a…
nap. Yeah, that’s it. A nap.
But here I am. I do it for you!
So I’m looking at the 30 minute bar chart of the Spoo futures, and it’s triangulating. But instead of spurting one way or the other, as triangle breakouts are wont to do, it trickled out the tip. And since then it still hasn’t budged, stuck around 1236, smack dab on the still declining 5 day cycle centerline.
That’s what you call your regression to the mean tendency. It happens an awful lot. I do a lot of work with regression channels in my daily reports to subscribers, and it’s just amazing how often the market parks or pivots dead smack on the regression lines, either the centerline or one or two standard errors away from them.
There’s also a 2 day cycle centerline that’s coming up just below at 1235. These two trends are opposed, and the price is caught in the middle. We have reached perfect equilibrium and apparently stocks are perfectly priced and fairly valued. Everything known, knowable, and unknown is now perfectly reflected in that amazing discounting mechanism of the future earnings of the 500 stocks that make up the S&P 500 index, or in this case, an imaginary index of the stock market that isn’t trading right now. But as surely as I am sitting here writing this, Virginia, somewhere in South Florida, while you are reading it somewhere in South Glens Falls, or South Philadelphia, or South Dakota, or South Korea, there is a market, and naturally, this must be the right price.
The 5 day cycle oscillator turned up on the cash charts during the day but the upmove in price couldn’t get off the ground. Other forces are at work here that are non-cyclical. For want of a better term, let’s call them, “impending doom.” So in spite of the 5 day cycle wanting to go up this evening, “impending doom” is saying, “No way Manuel!” If the Spoos drop under 1235, then the 2 day cycle will be getting in gear with “impending doom”, and there may not be much that the people who want the 5 day cycle up phase to strengthen can do about it.
If this area breaks, the bears are gonna have some fun tonight, yes, gonna have some fun tonight. But if it holds, then there could be a gentle move up within the 2 day cycle lines toward at least the inner 5 day cycle channel line now at about 1248, and falling at the rate of about a point an hour.
The indicators are inconclusive. This could go either way. Note however, that the oscillators are mostly near neutral. Any move that starts from the neutral zone tends to be explosive. Kind of like what I feel coming down my digestive tract.
The 30 minute bar chart of the S&P futures as of 7:40 PM ET.
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