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Replies to post #32360 on Market Direction and Stock Trends
08/15/20 10:05 AM
The Russel 2000 Index Cash closing today at 157788 is immediately trading down about 5.42% for the year from last year's settlement of 166847. This price action here in August is reflecting that this is within the scope of a bearish reactionary move on the monthly level thus far. As we stand right now, this market has made a new high exceeding the previous month's high reaching thus far 160360 intraday and is still trading above that high of 150724.
Up to now, we still have only a 1 month reaction decline from the high established during June. We must exceed the 3 month mark in order to imply a trend is developing.
The Russel 2000 Index Cash opened within last year's trading range which was 168168 to 132518. Right now, the market is still trading within last year's range with the last print at 157788. The last time such a similar pattern took place was 2018. Nonetheless, the market is trading below the opening print for the year which was at 167590. As long as this market remains trading above 134065 yet below the opening print on a closing basis, then a similar year-end closing in this posture will warn that we could have a knee-jerk low in place this year.
DAILY TIMING ARRAY PERSPECTIVE
On the Daily Level, looking at our cyclical timing models, there was a reasonable potential of a decline moving into today was Fri. 14th, which is reinforced by also a Directional Change Target given that the previous session was a low. However, a higher open above 157568 will imply that the Directional Change may point to a rally instead of a decline. A close above 158348 will tend to warn of a rally unfolding into the next target or beyond with the market moving into the next Directional Change/Turning Point Target on the top line (NOTE: this can be intraday or on a closing basis). There are 3 Daily Directional Change targets starting from Fri. 14th to Tue. 18th suggesting a choppy coiling period for 3 Days. Don't forget, a Directional Change can also be a sharp dramatic move in the same direction, not just a change in direction.
PIVOT POINTS
Looking at our Pivot Points, the market is trading BELOW all three indicating numbers and that leaves this in a bearish position currently with resistance at 157978, 158111, and 158774 for this next trading session.
DAILY PIVOT POINTS
157978
158111
158774
Projected technical Support tomorrow lies at 157308 and 157648. Naturally, opening below this area will cause it to become resistance. Projected technical Resistance stands tomorrow at 157858 158868. Opening above this area will cause it to become support.
NEAR-TERM OVERVIEW
The Russel 2000 Index Cash made a new low penetrating the previous session's low after opening below it intraday but we closed back above that low yet still closed lower at the end of the trading session. This market has closed higher for this week compared to last week's closing of 156918. Nevertheless, the market has fallen again by 1.39%. Up to now, the market has declined for the past 3 days meaning this is still within the time frame of a reaction.
We did close above the previous session's Intraday Crash Mode technical support indicator which was 154490 settling at 157979. The current crash mode support for this session was 156214 which we still closed above implying the market is holding for now. The Intraday Crash indicator for the next session will be 155598. Now we have been holding above this indicator in the current trading session, and it resides lower for the next session. If the market opens above this number and holds above it intraday, then we are consolidating. Prevailing above this session's low will be important to indicate the market is in fact holding. The Secondary Intraday Crash Mode technical support lies at 143248 which we are trading above at this time. A breach of this level with a closing below will signal a sharp decline is possible.
Intraday Projected Crash Mode Points
Today...... 156214
Previous... 154490
Tomorrow... 155598
Presently, the market remains neutral on the momentum indicator yet bullish on the short-term trend indicator while the long-term trend and cyclical strength are bullish implying that there is still underlying support so the market is not in crash mode as of this moment. The Superposition Reversal for tomorrow will be 148505 and a closing above that even after the election of Daily Bearish Reversals today, will imply a turn back to test overhead resistance will be possible.
HYPOTHETICAL MODEL ANALYSIS
Hypothetical Models, we see that we have Daily Bullish Reversals that would be generated if we see another new low penetrating 156788. These hypothetical Tentative Bullish Reversals would stand at 148506, 148867, 154650, and 160370, whereas a close above the previous high 158348 would tend to suggest that these Tentative Bullish Reversals will then become fixed as long as the low holds thereafter for at least several days. Moreover, the election of any of these Tentative Bullish Reversals during that session would signal a bounce is unfolding and that such a low may stand. However, if we continue to make new lows, then these WHAT-IF Reversals will be replaced by a new set until the low becomes fixed.
Hypothetical Models, we see that we have Weekly Bearish Reversals that would be generated if we see another new high penetrating 160360. These hypothetical Tentative Bearish Reversals would rest at 110940, 124191, 137450, and 146140, whereas a close below the previous low 156788 would tend to suggest that these Tentative Reversals will then become fixed as long as the high holds thereafter for at least several days. Moreover, the election of any of these Tentative Bearish Reversals during this next session would signal a decline is unfolding and that such a high may stand. However, if we continue to make new highs, then these Tentative Reversals will be replaced by a new set until the high becomes fixed.
Hypothetical Models, we see that we have Monthly Bearish Reversals that would be generated if we see another new high penetrating 150724. These hypothetical Tentative Bearish Reversals would rest at 96621, whereas a close below the previous low 138410 would tend to suggest that these Tentative Reversals will then become fixed as long as the high holds thereafter for at least several days. Moreover, the election of any of these Tentative Bearish Reversals during this next session would signal a decline is unfolding and that such a high may stand. However, if we continue to make new highs, then these Tentative Reversals will be replaced by a new set until the high becomes fixed.
REVERSAL SYSTEM
Utilizing our Reversal System, our next Daily Bullish Reversal to watch stands at 159384 while the Daily Bearish Reversal lies at 150157. This provides a very near-term 13% trading range. Using the Weekly level, the next Bullish Reversal to watch stands at 163478 while the Weekly Bearish Reversal lies at 141726. This provides a 13% trading range. Now moving to the broader Monthly level, the current Bullish Reversal stands at 158618 while the Bearish Reversal lies at 110257. This, naturally, gives us the main broad trading range of a 30%.
REVERSAL MAP SYSTEM
-- DAILY -- | -- WEEKLY -- | - MONTHLY - |
174300 | 3 | 174300 | 1 | 174300 | 1 |
173346 | 2 | ....... | 0 | ....... | 0 |
172439 | 1 | ....... | 0 | ....... | 0 |
172382 | 1 | ....... | 0 | ....... | 0 |
172263 | 2 | ....... | 0 | ....... | 0 |
172230 | 1 | ....... | 0 | ....... | 0 |
172022 | 1 | ....... | 0 | ....... | 0 |
171590 | 1 | 171590 | 1 | ....... | 0 |
170618 | 1 | 170857 | 1 | ....... | 0 |
169518 | 1 | 169546 | 1 | ....... | 0 |
168918 | 1 | ....... | 0 | ....... | 0 |
168739 | 1 | ....... | 0 | ....... | 0 |
167666 | 1 | 167666 | 1 | ....... | 0 |
166120 | 1 | ....... | 0 | ....... | 0 |
163312 | 1 | 163478 | 1 | 163478 | 1 |
159384 | 1 | ....... | 0 | 159950 | 1 |
----------------------------------------
150157 | 1 | ....... | 0 | 158618 | 1 |
147136 | 1 | ....... | 0 | ....... | 0 |
146470 | 1 | ....... | 0 | ....... | 0 |
146120 | 1 | ....... | 0 | ....... | 0 |
143645 | 1 | ....... | 0 | ....... | 0 |
142854 | 1 | ....... | 0 | ....... | 0 |
142364 | 1 | ....... | 0 | ....... | 0 |
140305 | 1 | 141726 | 1 | ....... | 0 |
140097 | 1 | ....... | 0 | ....... | 0 |
138400 | 2 | 139380 | 1 | ....... | 0 |
137430 | 1 | 137430 | 1 | ....... | 0 |
137270 | 1 | ....... | 0 | ....... | 0 |
134938 | 2 | 136115 | 1 | ....... | 0 |
133398 | 1 | 134350 | 1 | ....... | 0 |
130726 | 1 | ....... | 0 | ....... | 0 |
126255 | 2 | ....... | 0 | ....... | 0 |
WIDE-RANGING CLOSING TREND CHANGE POINTS
Change in Trend Indicator
Daily ........ 157364
Weekly ....... 146743
Monthly ...... 118669
Quarterly .... 129292
Yearly ....... 118169
Note: Negative means the market is trading below that level on a closing basis. The broader change in trend takes place only on the monthly to yearly levels. Those looking for exit strategies may look at these numbers on a closing basis per level.
Currently, we have exceeded last month's high so we have therefore generated a new What If Monthly Bearish Reversal which lies below the present trading level at the general area of 103538 and a month end closing beneath this level will be a sell signal for now.
Immediately, we have broken below last month's low and that means we have generated a new What-If Monthly Bullish Reversal which lies below the present trading level at the general area of 594604 and a month end closing above this level will be a buy signal for now.
We closed the previous month at 144137 after making a new high up three months from the low established back in June during 2020 at 153974. Immediately, the market is somewhat bearish on our monthly indicating range models as was the case last month.
BROADER OVERVIEW
The historical perspective in the Russel 2000 Index Cash included a rally from 2002 moving into a major high for 2018, the market has been consolidating since the major high with the last significant reaction low established back in 2002. The market has penetrated last year's low. The last Yearly Reversal to be elected was a Bullish at the close of 2013 which signaled the rally would continue into 2018.
On a broader perspective, this market remains in a positive posture on the yearly level while the quarterly level remains neutral on our indicating models. Still, it remains below key resistance on the quarterly level. This implies that the high established back in 2018 still remains important resistance. Immediately, it remains in a positive position on the weekly level but negative on the monthly level at this moment.
This past year alone, saw a significant price drop of about 23%.
RISK FACTORS
Russel 2000 Index Cash Risk Table
----------------- UPSIDE RISK ----- DOWNSIDE RISK ---
DAILY......... 159384 | 1.011% | 150157 | 4.836% |
WEEKLY........ 163478 | 3.606% | 141726 | 10.17% |
MONTHLY....... 158618 | 0.526% | 110257 | 30.12% |
QUARTERLY..... 160220 | 1.541% | 113170 | 28.27% |
YEARLY........ 0 | 81.99% | 104046 | 2.539% |
DAILY TECHNICAL OVERVIEW
After the historical high was established during 2018, a major low was created on 03/18/2020 at 96622 which was 107 days from that major high. The Uptrend line resides at 97342 providing the technical underlying support. The top of the Uptrend Channel stands at 109507 which we have exceeded at this point in time.
Meanwhile, the Downtrend Line from that major high of 2018 to the subsequent reaction high of 172600 formed 10 days thereafter resides at 91990. This line has provided technical support which the market has been trading above. Given the fact that the market is trading well above that technical indicator implies that any potential support would be during a short-term panic sell off. The post high low was established at 96622. We have not elected any Bullish Reversals from that important post high low on the daily level.
The more recent Downtrend Line constructed from the last high of 160360 to the subsequent reaction high of 159512 stands at 156968 while drawing a channel provides us with support at 136434. A break of this support with a closing below it will suggest a correction is unfolding. However, an intraday penetration of this support with a close back above would suggest that market could pause briefly.
The view from our Energy Models, the market is making new intraday lows in price while our Energy Models are still positive but declining right now.
OVERALL TREND
The Russel 2000 Index Cash is in bearish position on the quarterly short-term level of our model while the broader term is neutral to bullish implying that the long-term bull market is still holding. The Russel 2000 Index Cash is in a neutral position on the monthly short-term level of our momentum model yet bearish on the monthly trend while the broader term is also neutral to bearish. Looking at the weekly level, this market is currently in a bullish position. Overall, the posture is generally bullish for now.
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