In this Chart of the Week, Let's take a look at 10-Days down 50 Years ago and now.
Should we expect the same or a similar outcome? Read Below.
Wednesday - There will not be an MT Live this week because of the New Year Holiday.
The Master Trader top-down method of stock market analysis is a comprehensive approach that starts with a Techno-Fundamental perspective and narrows to individual stocks.
Master Trader uses a Top-Down method to educate students through courses and letter memberships
The Advisory Swing and Options Trader Letter overviews the broader markets, sectors, internal market gauges, and a bias for the next week. And continuing education in Master Trader Technical Strategies.
There will be new swing and options trades for the week and a video of open trades each week.
Below is part of last week's review and education.
The deterioration that began with our bearish market internals signal on November 25th continues.
Not one ETF closed above its 20-MA last week, and while the S&P 500 and the Technology ETFs regained their 50-MA, they are whipsaw patterns.
The S&P 500 is at about the same price as it was on November 11th but has traded above and below that high since then.
S&P 500 as of 12/27/24
Since November 11th, prices have been whipping above and below the $6000 level, and erratic whipsaw patterns after an advance typically occur at a turning point.
Master Trader Technical Strategies (MTS) defines an erratic whipsaw pattern after an advance as the beginning of the Stage 3 trend.
While not the textbook of a Head & Shoulders pattern, what is formed is close enough and an example of distribution.
After Stage 3 comes Stage 4, the downtrend. When would that be confirmed?
Confirmation of the pattern occurs on the close below the recent PLs formed in November and December.
The unfilled gap and November 4th pivot low could be a stalling point before continuing lower into the Void of price support below.
Is it possible for this pattern to not follow through lower? Yes, it is.
Historically, what would happen is that prices would consolidate in the current area and begin to “tighten up.”
Tightening up would be defined by narrowing the candlestick ranges with fewer overlapping ranges.
The resolution to this pattern will not be resolved in the final two trading days of 2024.
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Happy trading! If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com
