Live Trading System Signals on September 16, 2022 - Massive Breakdown in Support followed by Chop


The market did gap down past support at 3900 in the S&P and 12000 in the Nasdaq 100 as we anticipated but I didn't anticipate another day of chop. I was looking for a gap continuation lower.


Four out of five days this week have been very choppy. Tuesday we hit an equity peak. Since Tuesday, we have had 3 days in a row of chop, generating a drawdown alert to start trading the Stock Index Portfolio 26 or add contracts.


It was a frustrating week, even with Tuesday's gains, we had excess slippage and rejected orders on Tuesday and did not realize the full gain.


The 200K Portfolio was down -$2,800 on the day and the 50K Portfolio was down -$725 on the day. We are near breakeven on the month with two weeks left in the month and in the quarter.


We have experienced three days in a row of what felt like some of the most challenging stop running price action we have seen since CPI as the bulls constantly fight the intra-day trend with prop and chop price action.


The market pricing continues to be distorted in my opinion with too much of a bias that favors the bulls, instead of a natural free market that trades correctly and would generate higher returns in the long term in my opinion.


The Federal Reserve's presence in the market is too big. They have developed a sense of self importance with dependence from investors with 14 years of stimulus.


I believe this is the reason we are seeing a very slow and choppy bear market that may return to bull market mode before it even completes its bear market cycle.


The amount of energy spent to support S&P 3900 and then the gap down that reverses intra-day is bullish in my opinion. Even with a big down move this week, it is tough to short the market intra-day.


I am anticipating higher prices next week as we go into FOMC on Wednesday and our biggest gains could come from a bear market rally.


I wouldn't be surprised to see the Federal Reserve pivot and raise rates less than 0.75% on Wednesday's FOMC since commodity prices are beginning to indicate recession and the balance sheet is up instead of down on the month.


A rate rise of less than 0.75% would be a big surprise to the market and the type of forward thinking I started to see at the close in anticipation of a big rally next week. There would probably be an upside surprise that would take out the CPI sell off.


I am bearish on fundamentals but the price action and market psychology is starting to feel like a pent up reversal rally is developing.


Additionally, we had quad witching, options expiration today.

32 views0 comments

Recent Posts

See All