Careful Bulls – Beware the 1 day pop!
I don’t have access to my charts at the moment but I went back to KenS’s fractal of Doom to study it further. It’s truly a remarkable pattern. The one thing I have found is that to me the pattern aligns slightly better with the SPX from 2000. Also, it was not as severe of a drop to the bottom in SPX as the 80% we saw in the NASDAQ, so it’s possibly more realistic.
Anyway, last week I went back and began to zoom in on the daily candles to see if there were resemblances there as well. And again, remarkably, yes there were. The biggest difference in that pattern is that the GDX didn’t make a slightly higher high in its recent peak a few weeks ago like the SPX /NASDAQ did BUT it has also now bottomed with a slightly lower low compared to the SPX/NASDAQ… so proportionally, that makes sense.
I was expecting 3 things to happen these past few days based on the fractal.
1) a pop from the bottom in miners
2) a retracement of the pop over the next 2-3 days
3) a HUGE up day candle that closes near its peak.
We are 1 hour into trading but step 3 looks like it is occurring today… right on schedule. This candle can clearly be seen on September 28th 2000. From there, the down move continued and the rest is history. I could end up being wrong but if this plays out, I will again be backing up the truck to go short at the end of the day.
Also, if anyone wants to show the candle I am referring to on September 28 2000, please do.
Excellent synopsis PK…AGREE!
Well, its only good if it’s correct :). I have 2 higher targets on the HUI of 198 (backtest of the HUI triangle) and 200 (gap fill) that would make more sense from a charting perspective. However, if gold has trouble breaking 1226, it’s in big trouble. Downtrend = surprises to the downside
Thanks PK…and thanks again for doing your DD on DDD
🙂