The global socialists are going all out here to maximize pain for market bulls…
Today will open as the seventh consecutive sell-off bar. In each instance the market has been forced lower by the overnight futures market. This is the hallmark of an insider-driven takedown. We all knew they were going to take a shot at the cornerstone of Trump’s legacy in the election year–and so here we are.
The screen capture above lays it all out. This is an intermediate-term bear market and so after a long hibernation, the long-suffering bears are enjoying an absolute feeding frenzy.
So, the questions I am getting most often now are–‘How do bears avoid the inevitable bear market rallies that are almost certain to follow?’ and ‘How will I know when and where to buy to ride counter-trend long entries?‘. The answer to both of those questions is actually the same, and it is found by looking in the short-term tabs at Stops and Targets…
The key line is the short-term Stops/Reverse line. As the market trends lower it creates a series of lower high (and lower lows). What we are interested to watch is the first sign of reversal, which would be a move back ABOVE the last lower daily bar high. It is at that point where the most aggressive bears will start to cover en-masse and that creates a buying frenzy as the buy-to-cover orders combine with buy orders from aggressive counter-trend bulls. That massive hit of buy orders will overwhelm the potential sellers, who become content to sit tight and watch for higher prices.
At some point the balance will again change when the buy orders have been filled and sellers return either to re-short (bears) or to take counter-trend profits (bulls). Watch the upside targets in the short-term and be sure to respect that Stop/Reverse line on trades going in both directions. The action going forward will be short-term timeframe driven.
Bear market rallies can be spectacular, so when they come be sure to enjoy!
Also, and this is very important… the next target lower on the short-term tab shown above is our current Weekly Bar Paradigm last higher 4-bar pivot low. There have only been 10 previous instances since the start of the amazingly consistent paradigm in 2009 where that last higher 4-bar (weekly) pivot low has been taken out to the downside. In every single prior instance, that line eventually served as an ideal entry point after some initial blood-letting during a stop sweep/reversal. The panic selling will become intense under that line (by design). So, just to clarify–in every prior instance where the market was FORCED lower by the pros, they were ultimately content to cover and reverse after the stops were exhausted below that line.
The key to watch if that line gets taken out is if the paradigm will eventually continue and we see stop sweep/reversal #11 take form–or if, after all these years we will finally see an end to our beloved weekly bar paradigm. So, obviously ES 2857.75 is a very important number. The paradigm will end if and when price cannot eventually recover and hold above that line–but if it does ultimately recover and start to transition in the short-term, then be prepared to see some great buying opportunities once the pros switch sides. What you are seeing is all being carefully orchestrated, so keep that in mind as you make your decisions.