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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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To: Lee Lichterman III who wrote (52347)2/19/2022 10:18:48 AM
From: Lee Lichterman III9 Recommendations

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ajtj99
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OK, so here is what I am seeing. The top was nailed on the cycle as expected as shown here on the SPY. A typical top is usually followed by AT LEAST 10 weeks of down usually longer....



The EMA Ribbon chart I was talking about a couple weeks ago did the bounce I was expecting and then curled down and did a "Double Dip Break" as I feared it would which is a bad sign. Note the double dips below only occur during serious declines like early 2020. Normal minor declines tend to just touch the lower bound and bounce up resuming the uptrend....



Here it is panned back to see more of the typical bounce and resumes except for early 2020 which was more serious...



Now on the short term bullish side, note my expanded wide Bollinger channel showing we are at the typical bounce area while at the same time, I have a daily buy signal firing. (Note I only have buy signals on the DOW and SPX, nothing on the NDX or R2K yet)



Also on the regular daily chart, we are at the bottom of the downsloping regression channel where a bounce should occur....



All that said, the weekly isn't showing a buy yet and the momentum indicators had already curled up and look to be rolling over so I suspect this bounce will be brief and then we go down down down.

Fundamentally, I am worried that the down is too focused on the Ukraine situation and that any good news there may spawn a relief rally when in reality, the real concern should be the looming tightening and draining of stimulus. If this happens, it will just set us up for another looming correction down the road. Personally, Id rather get it over with now so we can resume a normal market later rather than having to worry about when the market will decide to correct the overvaluations down the road. I saw a text early this morning showing we are more overvalued right now according to the Shiller index except for only 2% of the last 100 years. (Bulls insert your "This time is different" rationalization here)

Anyway, short version, I expect a bounce early next week then more down in the weeks ahead.

Oh, the one thing that bugs me is we are still echoing the pattern form the second top I mentioned a few days ago shown here....

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