By Tim Knight
Now that we’re in an honest-to-God bear market………….thank the maker…….I am obsessing over charts even more than I normally do (which is saying a lot). I’ve noticed that the most interesting charts are those which are breaking down in stages. That is, they will be locked into a range-bound period of consolidation, and then some “shock event” will lurch them down to a new, lower range, and they’ll stay locked there. It makes for good use of horizontal lines. Apple is a good example:
Indeed, it makes me think that this bear market could be defined as one with “stages of rages”, instead of the old-fashioned name for a bear market which was……..let me think…….oh, yes: a slope of hope.
Continue reading Stages of Rages
By Rob Hanna
This is a follow-up from my FB post last night. Traders that looked to take advantage of a possible bounce from today’s open have seen moderate gains so far today. So what are the chances FB continues to bounce over the next several days and weeks? I re-looked at the study from last night, and examined how the other 9 instances performed over the next month.
The chances for a continued bounce do not appear very good. Based on the small sample of 9 instances, gains for the next month actually topped out by the end of the entry date. You can see total gains and most stats above are strongest by simply selling the 1st bar. Of course these results should be taken with a grain of salt, since they were generated on a small sample size, in a different market, and in different stocks. But this one admittedly narrow view is not encouraging. And while it is not enough information to make a trade decision on, I thought traders would find it interesting.
Continue reading NDX Leader Performance Over Several Weeks After Large Gaps Down (FB Follow-Up)
By Tim Knight
Ya know, normally I would be tap-dancing on the roof with glee. I mean, just LOOK at this:
OVER ONE-TENTH OF A TRILLION DOLLARS GONE. Poof! That sort of thing would normally have me grinning from ear to ear.
And yet this “Trump wins trade war” rally near the end of today’s trading session just feels like someone pissing all over my face. Honestly. I’m not sure Zuckup’s Fuckup can cure our ills. It just seems that each day some so-called good news is thrust out to save the day.
Continue reading And Yet They Persisted
By Rob Hanna
After the market close on Wednesday, Facebook (FB) released earnings, and the news and future outlook was not viewed well. After closing at an all-time high on Wednesday, it traded down in excess of 25% in the after-hours. So it seems certain it will be opening Thursday with a sizable gap lower. I decided to take a look back at other leading NDX stocks that suffered large gaps down. I first checked for all stocks that:
- Closed at a 252-day (1-year) high yesterday
- Were a NDX constituent at the time
- Opened over 15% below yesterday’s close
Looking back to 1993, I found only 2 examples. They are shown below with results of buying at the open and selling the close the same day as the gap down.
Amazingly, there have been only 2 instances in the last 25 years. Both saw sizable intraday bounces. Loosening the criteria to require only a 10% gap down yielded the following results.
Continue reading A Look At Past NDX Leaders That Gapped Down Big (For FB Traders)