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I am not an enormous conspiracy theorist, however relating to Wall Avenue and all of the TRILLIONS of {dollars} at stake, I consider something goes! I particularly love finding out unstable durations. Are there indicators on the market to assist us determine the REAL strikes increased from the FAKE strikes? As I examine, I proceed to study, however I do consider we will achieve useful perception from spending time analyzing patterns.
Within the transfer decrease from the pre-pandemic February nineteenth excessive to the panicked low on March twenty third, the QQQ (ETF that tracks the NASDAQ 100) noticed most of its transfer to the draw back occurring on the opening bell. Here is a spreadsheet that reveals you the change every day throughout this era within the QQQ, breaking down how a lot of the drop occurred on the opening bell and the way a lot was actually distribution (intraday promoting – the change from the open to the shut).
The QQQ fell from 236.98 to 170.46, a 66.52 drop, which is mirrored within the far proper column on the backside. Web gaps have been 58.80 LOWER, representing greater than 88% of the decline. We solely noticed ACTUAL INTRADAY SELLING of seven.72 all through your entire pandemic. In my humble opinion, your entire decline was media-induced panic. Wall Avenue wasn’t promoting, they have been more than pleased to purchase shares all through the interval. And we now know what occurred within the rear view mirror. U.S. equities staged some of the highly effective rallies ever from that March twenty third low.
Now let’s quick ahead to the January 2022 decline. The QQQ closed at 401.68 on January third and on the shut on January twenty third (the day earlier than the most important reversal), it closed at 351.69. Here is the breakdown of gaps decrease vs. intraday promoting for these three weeks:
Hhhhhhmmmmmm. The image has reversed. The promoting in January was practically 79% intraday vs. simply 21% gaps. That, to me, seems like REAL distribution, which is a giant purpose why I would not belief this rebound.
Talking of this rebound, what if we utilized the identical evaluation? How a lot of the rebound by way of Thursday’s shut was hole ups (orchestrated) vs. intraday shopping for (precise accumulation)?
The “Massive Rebound” was 75% orchestrated (gaps). The 25% true shopping for was seemingly retail traders, unaware of the manipulation going down. Hey, perhaps I am unsuitable. Possibly the inventory market will simply come roaring again. However I am not placing my cash on it.
I consider we now have extra ache forward, fairly presumably much more ache. It is the explanation we introduced our February Schooling Sequence that started final Saturday. This Saturday’s occasion, “The Anatomy of a Cyclical Bear Market” is designed to teach our members as to the seemingly period and severity of the present cyclical bear market, which I feel is now effectively underway. If you would like to attend tomorrow’s occasion, you may want a 30-day free trial. For extra info and to get your trial began, CLICK HERE. There’s by no means been a greater time to be an EarningsBeats.com member!
Blissful buying and selling!
Tom
Tom Bowley is the Chief Market Strategist of EarningsBeats.com, an organization offering a analysis and academic platform for each funding professionals and particular person traders. Tom writes a complete Every day Market Report (DMR), offering steerage to EB.com members daily that the inventory market is open. Tom has contributed technical experience right here at StockCharts.com since 2006 and has a basic background in public accounting as effectively, mixing a novel talent set to method the U.S. inventory market.
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