Look: I am eager to learn stuff I don't know--which requires actively courting and posting smart disagreement.

But as you will understand, I don't like to post things that mischaracterize and are aimed to mislead.

-- Brad Delong

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Everything that appears on this blog is the copyrighted property of somebody. Often, but not always, that somebody is me. For things that are not mine, I either have obtained permission, or claim fair use. Feel free to quote me, but attribute, please. My photos and poetry are dear to my heart, and may not be used without permission. Ditto, my other intellectual property, such as charts and graphs. I'm probably willing to share. Let's talk. Violators will be damned for all eternity to the circle of hell populated by Rosanne Barr, Mrs Miller [look her up], and trombonists who are unable play in tune. You cannot possibly imagine the agony. If you have a question, email me: jazzbumpa@gmail.com. I'll answer when I feel like it. Cheers!

Saturday, September 26, 2020

Taking Stock - September 21-25, 2020

Monday, Sept 21, 2020

Red Arrow Down

DJI30 at the close   —-   27,147.70   -509.72 (-1.84%)

The index opened at 27485, off 173 points. That was the day’s hi.  There was an immediate drop to 27165, off 492.  By 11:30 it reached the day’s lo of 26715, a stunning loss of 942 points in a little over 2 hours.  From there it galumphed along, staying under 26870 until after 3:00 when it climbed up 178 points to the close.

From Friday’s hi of 27945 to today’s lo of 26715 is 1232 points. The day’s span is 770 points.

I’m not a great Elliott wave reader, but this is how it looks to me.  The drop from the 9/03 hi to the 9 /11 low was 1751 points. This was wave 1 down at some level of trend.  The 9/16 hi was the top of a wave 2 recovery of [amazingly] 916 [!] points.  This exceeded the 50% retracement level by 41 points, or 0.14%.  How much accuracy do we need?  Wave 3 down is now in progress.  It is never the smallest, and is often the largest.  So it will span more than 1751 points.  A target magnitude of 1.382 x 1751 = 2420, landing at 25945 is not unreasonable.  However, it could be much lower.  After that comes another recovery in wave 4, then wave 5 down to a longer term lo.

If that holds, a wave 4 retirement of 50% would top out at 27155.  Then if wave 5 = wave 1, then the lo would be at 25403.  The net drop from the 9/03 hi of 29199 would be 3796 points.  This is all speculative, and probably optimistic.

The main indexes were all in the red all day.  The SP500 had a similar contour to the DJI, and finished off 1.16%. The NASDAQ was down early, but finished strong to only be off 0.13%.  The Russell 2000 took a real beating.  It fell hard early, then was flat most of the day, finishing off 3.35%.  

On Thursday I said this about the indexes, “if the fragmentation resolves into coordinated downward motion, the results could be painful.”  i also said a DJI break below 27000 would confirm a downward trend. It finished 148 points above that benchmark, but was almost 300 under at the low.  I suspect the partial recovery in the late afternoon is a counter-current sub-wave, and the decline will continue tomorrow or Wednesday.  If I’m correct, this would be a 3rd wave of a 3rd wave, and those declines are brutal.  Back in March - not so very long ago - it bottomed just above 18000.

Closings -

9/21/18 - 26744

1/02/20 - 28869

8/21/20 - 27930

9/21/20 - 27148

NYSE Internals -

A/D = 443/2623 = 0.17

A/D Vol = 0.12

New Hi/Lo = 19/41 = 0.45

Monday, September 21, 2020

A. D. 536 - A Terrible Year Leading Into A Terrible Century

You think 2020 is bad?

You're right.  It's a terrible, horrible, no good, very bad day.

But A.D. 536 was worse.

Saturday, September 19, 2020

Taking Stock - Mid-September edition

 A week's worth of my market musings.

Monday 9/14, 2020

Green Arrow Up

DJI30 Index at the close   —-   27,993.33   +327.69 (+1.18%)

The index opened at 27719, up 53 points, and immediately jumped up to 27875.  It reached a hi of 28064 before 10:30.  After that it was mostly sideways. It reached the final hi of 28086 a 1:00 and again 10 minutes before the close, with a dip in-between to 27915 before 3:30. In the last 10 minutes there was a 46 point drop into the close.

The lo to hi spread was 367 points the smallest since 280 on 8/31.  The 10 day average is 554.  

The up-down-up contour of the last four days might be an a-b-c counter-trend move in a downward impulse.  If so, this could go on into a more complex pattern, or turn sharply down tomorrow.

The alternative possibility is a continuing increase from the 3/23 bottom, with the potential of a new all time high. The very strong NYSE Internals today are consistent with this view, but the last time this happened on 7/15 there was no follow through.

Closings -

9/14/18 - 26155

1/02/20 - 28869

8/14/20 - 27931

9/14/20 - 28018

NYSE Internals - Strongest since 7/15, an unremarkable day with a 379 point span and a 228 point gain, closing at 26870. 

A/D = 2448/591 = 4.14

A/D Vol = 5.59

New Hi/Lo = 60/12 = 5.0