Brown Pants Syndrome Crash – Day 2

Stock Market Trading Setup for Friday, March 6, 2020

Hourly ES S&P 500 Futures Chart

As of 8:00 AM ET, the S&P fucutures were in full crash mode. It is breaking one support level and trend after another. The next support line is 2900, then 2850.

Today’s target could be the trendline from the high. That line is now around 2760. Or it could be the trendline at 2730.

Or worse.

This smells like 1987. Or more like 1929. A change in the world order is under way. Fascism is on the rise everywhere, especially the US. Today could be Black Friday in the worst sense of the term.

Momentum and cycle indicators remain extremely weak. Furthermore, there are no “oversold” parameters in a crash. Indicators may rebound while prices have a dead cat bounce, then they both crash again.

So when any of these support levels on the chart holds, beware the dead cat bounce. Look for broken support to become resistance. When the market starts breaking through those levels on the upside, then we can think about a real rebound.

China Stock Market Overnight

The Shag High rally stalled today.

The levels to watch are still 3100 and 3122. If the market gets there then stick around that level and consolidate, that market could roar higher. If they roll over from that level or lower, LOB.

S&P Futures Daily Chart

The market is crashing again after a perfect 50% fiber nacho retracement of the initial drop. It’s targeting a test of the low at 2846. If that breaks, then the next target would be trend channel support atround 2725-30 today.

The indicators show no sign of a bottom whatsoever. There’s no oversold parameter in a crash. Positive divergence are almost certainly necessary to form for a real low.

S&P Cash Index Hourly Chart

The green rectangle at the far right is where the futures have been trading this morning. At the 8 AM price, the market would open at support at 2915. If that breaks, the next move would be a full retest of the low, and so on.

At this point, there’s not yet a projection for a 5 day cycle low.

2975 is now indicated to be resistance. They’d need to clear that to even think of reversal.

If you’re bullish, you can hang your hat on the idea that a 5 day cycle low is due this morning. But these are extraordinary circumstances. If the lows get blown out, pray!

“And that’s the way it is, Friday, March 6, 2020.”