Friday, September 22, 2023

Charts Sep 22, 2023

As mentioned in my charts and comments for subscribers in recent days, the market has turned acutely bearish and some charts are now offering a pretty ugly look. Early September stands as a lower high and the decline that started in late July is ongoing. We have to wait for signs of a bottom.

Market situation:

* 111 SPX stocks in bullish mode = further downtick and coming close to the below 20% zone, where important lows tend to be made.
* BullsPower at 9, BearsPower at 32. Bears assert themselves even more and we have to see if and when bulls can fight back.
* 130 stocks with upward MoM (green dashed line). Probably going for its next <100 low.
* Market drops below the Watershed envelope. Acutely bearish. And a test of the weekly Watershed (wW) near 4180 is now becoming a very realistic possibility.

* BMO is going down and could go for a -2 extreme low.
* ELC is gathering more downward traction. BUD is weakening as well. Nothing to smile about if you were bullish.

* SPX Rotator is starting to drop a bit faster.
* Both red and green component are in decline.
* Bands are dropping and the lower boundary is at 4272, so there is further room to fall.

* SwX stays red bearish and it hasn't been this bearish since the Oct 2022 lows.
* Daily MoM keeps going down. No signs of a bottom.
* New 3 month lows. The August low didn't put up much of a fight.
* The 4325 level was the August 2022 top and has offered support several times since it was overcome in June. I would expect some buyers to show up here, but if that doesn't happen it could get ugly fast. 4250, where the lower red trendline comes in, would then become the next port of call.

* Icebergs algo update. No "green mountain" since early August. We are now getting "ice in the water", which is the polar opposite of "red lava" that appears in hot bullish conditions near market peaks.
* Ice in the water can appear for just one day, as was the case at the March low, but it can also stretch out over longer periods. Very sharp rebound rally days can happen in those conditions, but such spectacular one day gains do not necessarily hold up long (bull traps).

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