There are so many big sketchy bear setups now I don’t even know where to start.
I suppose the indices.
Indices:
Indices don’t look as terrible as some of the other things we’ll cover but indices are starting to look bad. The current daily candle in Nasdaq is threatening a breaking of the bullish butterfly.
That was a good could-be low for the bulls on 1.61 and it’s broken.
We’re also threatening a break of the 76.
Both of these are good trend continuation patterns. If they fail, they can be strong trend failure patterns.
This could be a low. By default I feel tempted to buy here when it’s as close as it can be to the bull setup failing. Just on the basis it’s incredibly high RR and if you do incredibly high HH things enough times it tends to work out in the long run. But the various other sketchy things make me doubt this will hold.
It should be made perfectly clear though, before we dive deep into the woods of bear setups, indices do currently trade at pending supports. If the bear patterns are working, they should work. Persistent fighting of them likely means a new high. Even if the bear thesis is overall correct, there can always be another spike.
Resect the risk of support holds.
That’s going to be the last semi-bullish thing I say. Charts are not generally looking bullish. I’m just paranoid because I know they often won’t before mega stop runs.
SPX chart we have the same stuff as Nasdaq. The 76 testing now and us having broken a pending bullish butterfly.
Both of these are screaming major decision points. If these break usually the 1.27 fib will hit.
Breaks at these levels I’d find interesting because they may be liable to set up a domino effect of bigger breaks. That’s not the point of this post though, here we’re just looking at the pending break setups we have right now.
The RUT looks like a textbook bull trap.
How many times have we seen examples of this 76 rejection to a spike? Oh so often on smaller charts we’ve seen these form and then slam through to new lows.
If that was to happen here in the RUT, it’d be breaking the 2022 lows. Which doesn’t seem like a thing that’d be happening when things were generally bullish.
The indices look bad but when it comes to fading indices it really does pay to always have half a mind towards being bullish when it’s down a lot. Even when you’re right about the bear move there’s often bull traps and being long supports helps a lot when you want to short stubborn spikes around resistance.
Based on just indices alone I really would feel inclined to be bullish here but there’s a lot of really bearish looking things when you take a broader look.
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