Not Calling For This, Just Observing It

What originally clued me in to the super dark thought was actually Amazon. I had a good, working count on it for a while, generally behaving the way I wanted, but as the market made new lows across the board, it gave me this:

AMZN

And I’m not quite sure what to do with that. Repeatedly hitting the same level could mean consistent buyers there, but repeatedly hitting that so many times may also weaken that level. Is it a bottom? I don’t really know. The H&S is apparent there though. And just because it’s apparent, does not mean it will also break down. And in fact, H&S patterns are often traps. But sometimes they are not. So, I’m feeling more cautious. Especially with the absence of a super strong rally. Is that thing on the right on Amazon above an impulse wave? I suppose it could become one, but it doesn’t look like one yet.

And we see the same sort of “dead cat bounce” in other places, too, like the Russell:

IWM

So, as I said before, I don’t know what probability to place on these. But, they convey some risk to me.

It makes sense to me that the market should move up, especially with some of these looking yesterday like they’re turning. But, checking in on the 10-yr yield today, it still hasn’t given up that multi-year trend line that it broke above:

10YRYLD

Same story with the dollar. All that weakness yesterday has reverted today, and we do need to see it give up its trend line, too:

DXY

So, let’s see what happens, but I suppose I am more open to another failure ahead until we see some real strength, and so I have protected myself against a sharp further decline.


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