Equities fell into the weekend, the SPX settling -19pts (0.5%) to 4117, which made for a net weekly decline of -106pts (2.5%). Meanwhile, WTIC settled +$2.33 (2.8%) to $85.54, which made for a net weekly decline of -$2.54 (2.9%).
sp’weekly1b
WTIC weekly
Summary
SPX: a second week lower. Last week’s bearish engulfing candle played out. This week’s candle is spiky on the upper side, reflective of another failed rally attempt. Zero sign of a floor. Weekly momentum is accelerating to the downside, and shall remain a powerful restraint on ALL bounces into/across November.
WTIC: bears could argue structure is a multi-week bear flag. I’d note weekly momentum looks prone to turning negative next week. The obvious threat is sporadic ‘spooky news’ from the middle east, which could easily see oil hyper spike to $100. I see anyone short oil or the related energy stocks as crazy.
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Dear Subscriber
First, some perspective…
With just two trading days left of October, the SPX is currently -170pts (4.0%) at 4117. I’d note the key 10MA, which we appear due to settle below.
Monthly momentum turned negative on Friday, and will be an added restraint on ALL bounces, probably stretching into 2024.
As of Wed’ Nov’1st, the m/t trend can likely be said to be bearish, having maxed out July 27th from 4607.
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Today was day’9, of a viable 10-11 day major drop. In theory, this down cycle will conclude as of Halloween, when the Puetz window closes.
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Trading notions
I want to hold heavy short into Tues’ Oct’31.
I want to ‘clear the decks’ by the close of Oct’31.
Wed’ Nov’1st. I would consider a short* on any bounce, esp’ after 2pm, with the Fed/Powell
*position size would be small, (10% of size relative to recent trades) although I’d consider two blocks, one conventional (3-5 strikes out of the money), and one crash block (15/20 strikes out of the money)… both Nov’3 expiry.
Thurs’ Nov’2… I would look to close any/all shorts on early morning downside.
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Thursday evening, I was re-reading… http://www.economicfractalist.com/blog
Fractal guy – ‘Greatest decline in the final 10x 4hr unit sequence.
… so…. 40 trading hours.
… which gives the following (start at the bottom)
Wed’ 25 (5hrs) 40hrs – start 11am (SPX 4212.85)
Thur’ 26 6.5hrs 35hrs
Fri’ 27 6.5hrs 28.5hrs
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Mon’ Oct’30 6.5hrs 22hrs
Tues’ Oct’31 6.5hrs 15.5hrs
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Wed’ Nov’1 6.5hrs 9hrs
Thur’ Nov’2 – start from 12pm ET 2.5hrs
Time – Running total (count upward)
The start time of Wed’25th 11am is notable, as its within the last segment of the big bear flag that began Oct’23 9.30am (4189), and was provisionally broken in the 12pm hour of Oct’25.
This is curious to see. The bear flag is big, and bodes for far lower levels, which we’ve already seen.
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Notes…
The day count would be day’13… if Nov’2nd
…or day’12… if you start from Oct’18th, rather than Oct’17th (4393)
Typically, a major drop (not least a crash) will NOT exceed 12 days.
I’d reference 1987 and 1929, but there have been a number (if less powerful) 10-12 day drops across the past 15yrs.
Nov’2 is a stretch… but its just about realistic. The FOMC on Nov’1st complicates matters, but it’s possible it’d be the excuse for one final wave Wed’ 2pm> Thursday 12pm.
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Miscell’ things
This was posted two weeks ago on Rumble, but it arguably merits attention…
There are a truck load of individual issues, not least the intention to demolish the Al-Aqsa Mosque, which would send the Islamic world into fury against Israel. Regardless… none of it bodes for peace. Instead, an escalation appears an eventuality.
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Whilst there is much attention on Gaza/Israel, the Ukraine/Russia battle continues. Winter is approaching, a time when things generally grind to a halt.
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Mr Furious, but he is justified to be so, as too many on planet Krazy are blood thirsty maniacs.
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The weekend
Two days to rest and recover is most welcome. I’ve sideline entertainment from Loki, Gold Rush, and maybe a movie.
I will try not to think about the market too much. I’ve done all I can in recent days. I simply have to just wait and see how it plays out.
As ever, feel free to message me via Disqus or email.
Sincerely, have a restful weekend, and goodnight from London
yours… Philip
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The weekend post will appear Sat’12pm EST @ https://tradingsunset.blogspot.com, and will detail six of the US equity indexes (weekly candle charts).