This was another day that felt manipulated “propped-up” to me. $TICK was hitting extremely high levels (it hit 1440, 1500 and 1477 today) again today all to just keep the market at unchanged. Maybe now that the month-end (and year-end for many funds) games are over the market can go where it’s truly headed. It looks to me like we’ve got falling three methods patterns forming on the indices:
1. 1st day is a long black day.
2. Three small body candlesticks follow the 1st day. Each trends upward and closes within the range of the 1st day.
3. The last day is a long black day and closes below the 1st day’s close.
And here’s a more detailed definition of the falling three methods.
Below are charts of the indices. I can see all of them, except for the S&P 500, easily completing a falling three methods tomorrow. Of course that assumes that we don’t have one of those go-nowhere Fridays. The S&P has to fall more so it would be tougher for it to complete the pattern tomorrow.
Worden had some interesting comments about the market the last two days. They see this bounce on the Dow and S&P 500 as them rising to “kiss the channel goodbye”:
The Nasdaq Brothers remain in Short-term downtrends within their channels. The Dow, after having violated the up-channel on the downside, has bounced up and is in the midst of a passionate kiss of the channel, from which it may be cruelly repulsed by the object of its affection. The SP-500 has climbed back up into the channel, which I must say is overdoing it a bit, as far as these goodbye kisses go, but it’s not that unusual. Nevertheless, should it rise far enough to negate the Short-term downtrend, I suppose we’d have to rate that channel rupture as a false sell signal.
And here are the channels Worden’s tracking – first is the Dow followed by the S&P 500:
No changes
| Trend | Nasdaq | S&P 500 | Russell 2000 |
| Primary | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Down | Up(+) | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
Good post mike…I agree with you.. I see a nice falling 3 pattern in the QQQQ’s but not the other indices..
You say: “This was another day that felt
manipulated“propped-up†to me.”It should be noted that even though U.S. stocks were fairly flat the last day of November, the major European stock indices fell sharply. I have noticed that the great majority of the time the European indices move in the same direction as the U.S. markets. If the U.S. markets were being manipulated, this would not be true of the European ones and would account for the large contrast between the two.
Also, on an unrelated note, your chart for IWM looks totally different for 11/30 than mine from Prophet.net and Scottrade. Yours shows a 0.32% loss while mine is essentially flat for the day. The underlying index increased about 0.25%.
Good catch on the IWM chart. In TeleChart is also looks about unchanged — closed up 1 cent for the day. The StockChart.com chart still shows it down 25 cents yesterday — I thought they may have corrected it by now. Pretty scary when you have such different data.
Mike,
It was an interesting observation about the falling three.
What do you think about the SPX weekly chart?
It is still in the up trend. But, after I saw a doji-bar two weeks ago,
I thought it would sell off.
The MACD histogram is now showing a divergence. Anyway, it is
not easy to be bullish at this stage.
the weekly looks OK… it’s trendline got saved by that late-day buying. The candlesticks continue to flash warnings though, first that doji and now a hanging man. Let’s see if they get confirmed.