We know the market was near term oversold on Friday’s close…but seriously.
“The” certainly didn’t want to open the door to a Black and Blue Friday/Monday scenario.
The Plunge Protection Team was suited up and the ghost of President “Don’t let that happen again” Reagan echoed across the canyons of Wall Street.
As well, the ghost of the Flash Crash from the first week of August loomed large on Friday’s close.
The Q’s gapped below a trend channel on Friday.
Yesterday they rallied back to backtest the bottom of the channel—just shy of a perfect Phil D Gap.
It’s a POTENTIALLY text book resistance, except that the channel could be recovered and that theoretically opens the door to a new high.
That would not be the normal expectation but this is Crazy Train.
As well there is the possibility of a Megaphone Top if a new high should play out.
The T Rex in the bear ointment if a new high is struck is that it would trigger a Keyser Soze buy setup.
That is because a new high offsets Thursday’s Key Reversal Day.
It’s not just a run of the mill KRD…Thursday’s reversal produced a large range daily AND weekly Key Reversals.
So pick your poison on a theoretical new high: Megaphone of Keyser.
The massive volatility I expected for this week got a good start.
If the Roadmap is dialed in then today should be a Sell Day followed by an strong Buy Day on Wednesday.
Then a Plug Pull.
If the Roadmap is correct then the pattern may be an A Wave up yesterday, a B Wave down today ideally and then a strong C Wave rally on Wednesday….followed by a Wave 3 decline of some degree.
An hourly QQQ shows the large gap on Monday’s open from the 556 to 559 region.
The Q’s massive gap down on Friday and large gap up on Monday underpin the idea that Volatility Precedes Trend Change.
This week is a big week cyclically.
Here’s why.
From the major bear 1932 low to the major Dec 1974 bear market low (I’m using 1975 since it was a December low) is 43 years.
From the major bear market low in 1982 plus 43 years is 2025.
If you calculate this out in months it points to the end of the year. I’ll show this in tomorrow’s report
It’s the difference between 515 months and 520 months.
We’re at 515 as the crow flies currently.
So we have a huge low to low cycle.
Is a huge low to high cycle on the table?
Why this week is interesting is because the aforesaid “43” is straight across and opposite August 8.
It’s always the week of when you’re potentially dealing with big cycles.
Interestingly November 8 squares 43. That takes us into the end of the year.
August 8 is a Gann Day as well.
Gann stated he discovered his Master Time Cycle on August 8, 1908 or 8/8/8.
I’ll get into that in tomorrow’s report.