Friday’s Actions In The S&P 500 Index

If you want to see a day where technical patterns repeatedly breakdown and fail, then today is your day. It’s been a while since I’ve seen breakdowns bounce hard into their range right after the break, or the same with break outs. These are false breakouts and breakdowns and they snare even the most experienced technicians. The only way to protect yourself is to recognize that a pattern is failing and get out.

Around 11:20AM, the S&P 500 (^GSPC) broke out but formed a slight head-and-shoulders and broke down at around 12:10PM, but rallied back up to break out from a small consolidation zone. Then, we failed to follow through and we broke down at around 1:40PM but found near-term secondary support at 860 and rallied back into consolidation to breakout one more time at around 2:10PM. We formed a flag which bounced off of initial support and broke out, turning parabolic intra-day…only to fail again and create the massive neutral trading range. In the last 10 minutes, we happened to slightly breakdown out of this range.

If you ask me, today (Friday) was NOT a tradeable day. So many mental stops on trades in my day trading segment got hit that I now have a pulsing headache and am taking Acetaminophen. Where’s the morphine when you need it?

What’s interesting is that all of this (including the headache) fits into the Sentiment Cycle. We are in the stage of despair. While you’re at it, you can also read my August 28 article on the Guide to Bear Markets.

S&P 500 (SPX) 1-day

S&P 500 (SPX) 10-Day

S&P 500 (SPX) 3-Day

The Bigger Picture:

Posted in Categories: Contributor, External Research, Stocks, USA.

Subscribe by RSS Subscribe by Email