Market Update

Early today I posted this in a Market Update

My expectations were as follows:

" note there's a triangle consolidation sitting just above the breakout trendline, I would expect a false upside breakout from this triangle and then a move below the breakout trendline, probably on increased volume."


My expectations were in part because of 3C readings, but had more to do with market psychology or the manipulation of market psychology of technical traders. As I have opined numerous times, Technical Traders are doing the same thing they have done for over 100 years, Wall Street has adjusted and Technicians have not. It makes it very easy to know what technical traders will do/think with any given price pattern, thus Wall Street's reaction becomes predictable.

 Here's the triangle I mentioned earlier this morning, it is a bullish consolidation triangle sitting above the breakout point, this mean technical traders assume it to be a bullish pattern and will buy it, but as I have pointed out, not only the triangle, but the larger base are way too obvious for Wall Street not to manipulate in the short term, punishing technical traders. I expected an upside breakout, which we see followed by a downside move, likely below the larger pattern's breakout line. It seems the 50-bar 5 min average which is widely watched provided earlier support, but has now broken, on heavier volume as I also suspected. This is a short term manipulation taking advantage of the predictability of traders.

 The DIA is showing signs of a pullback in 3C

 Here's the Q's with the triangle in the white box and the important breakout trendline, again the 50 sma was support, t s now broken on heavier volume.

 The QQQ is showing signs of a pullback as well

 Here's the same chart for the SPY

And signs of the pullback.


If you have kept up with my posts, you understand this s a short term manipulation of traders, you can take a look at my original post linked above to see not only my expectations for today, but also the bigger picture. As I mentioned last night, keep your eye on the forest, not the trees.


This move, should t continue to play out as expected, will set up quite a few long trades that should pullback to very attractive levels. I'll be listing those trades.