Disrespecting Technicals?
Not a great week for the HSEP. I'm going to drown my sorrows in a Coors Banquet Beer this evening.
So here’s the deal; I’m not a great technical analyst. I don’t even really know if I’m all that great at fundamental analysis either. I kinda just place bets that I think make sense and I’m lucky that I usually win slightly more than I lose. Here’s what I do know though, degens traders and investors can disrespect the technical signal at their own peril. And today the market appears to have disrespected the technical signal. It’s a bold strategy, we’ll see if it pays off.
This is the daily chart of the S&P 500. I count three fairly significant bearish technical signals converging all at the same time; and this isn’t even including the bearish RSI divergences from late July which have yet to produce an oversold RSI print:
We have a massive bearish engulfing candle on Thursday.
That same candle also served as a rejection of a 50-day moving average back test after that MA was given up earlier this month.
And finally we have a potential “head and shoulders” pattern developing as well.
Regardless, the muscle memory of always buying the dip won on Friday even with the credit master saying higher for longer at Jackson Hole. I suppose we’ll find out the real direction next week. As for the Dollar, there could realistically be some upside remaining though the RSI there is getting a bit hot:
We have a trend breakout and a 200 day MA breakout. But again, the DXY is getting a little hot on the RSI. We’ll see. Dollar up, Gold and Bitcoin down. So of course STONKS up. Anyway…
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