Originally published on July 19, 2021 by TraderStef at CrushTheStreet
After an extended period of drought in my precious “Live Free or Die” neck of the woods of New Hampshire, a copious amount of rain has fallen over the last few weeks that greened the forests and gardens into a tropical paradise. It is said that when it rains, it pours, and that may now apply to the financial markets in the near term. Seven months ago, I published the “Dow and S&P 500 Technical Analysis Part 4” and noted the following:
“It was definitely a black swan (2Q20) experience as high-frequency trading (HFT) kicked in after machine-learning algorithms digested a new pandemic vocabulary and a brutal plunge in the market commenced. The Dow nose-dived -38.5% and the S&P 500 plummeted -35.5% to their final lows on Mar. 23, 2020. The world imposed severe travel restrictions and societal and economic hard lockdowns on an incremental basis through late February, March, and April. The New York Stock Exchange switched to full electronic trading on Mar. 23 and was the first time in history that the “Big Board” had ever closed. Less than one week had passed before the Fed announced a zero-interest rate policy (ZIRP) and injected billions in liquidity for open market operations. On Mar. 23, the Fed pulled out a bazooka with unprecedented monetary policy measures that launched multiple credit facilities to backstop businesses, massive purchases of treasuries, bonds, and mortgage backed securities “to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.” On Mar. 27, President Trump signed into law the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act to help blunt the economic impact… but the socioeconomic metrics are growing into a larger train wreck than the Great Financial Crisis or a pandemic black swan, as the U.S. stumbles into the void of “The New Great Depression.”
By Jan. 2021, the U.S. had entered another pandemic wave with COVID-19 “variant” mutations that multiplied like rabbits in various countries. After the new Biden administration took control of the country with executive orders and subsequent policy decisions, they have caused havoc on multiple fronts that are too numerous to mention today. What will likely be the radical left’s downfall are the forensic ballot auditing initiatives taking place in several states to revisit the 2020 election results and their fascist campaign and narrative to inject every U.S. citizen with an experimental inoculation that warps the initial goal of Trump’s “Warp Speed” campaign.
If you want to dive into the evolution of the pandemic and a brewing Nuremberg II legal case, explore my Twitter thread about Informed Consent since Mar. 31 that focuses on mRNA vaccine technology being deployed, and a previous thread that is tracking the global response to the pandemic since Dec. 2020. Those links take you to their most recent posting so you can scroll your way up through to the beginning where my articles originate.
No matter what your opinion is about the pandemic or how the financial markets and governments are responding, automated trading platforms do not execute trades based on feelings and opinions. Instead, they react without the nuances that inhabit the human condition, access the conglomeration of textual language that is generated by the media industry, and individual algorithms are using every technical analysis indicator you can imagine.
The only point I will offer this evening about the pandemic is an emphasis on the growing potential for antibody-dependent enhancement (ADE aka immune escape) to expedite an enormous wave of infections, adverse reactions, and death we definitely don’t want to experience. Dr. Robert Malone is the inventor of the mRNA technology platform and agrees with an assessment by Dr. Vanden Bossche. I noted Dr. Bossche’s first letter“ to all authorities, scientists and experts around the world, to whom this concern, the entire world population” within my informed consent article where he warned that ADE could develop if the world continued mass ‘vaccination’ in the heat of the global pandemic.
Here are some relevant data points to consider as markets and populations react to government travel restrictions, localized lockdowns, mask mandates, and implementing jab passports:
- New Discoveries About the Safety and Efficacy of Covid Jabs – Principia Scientific
- Vaccine Hesitancy Is ‘Highly Informed, Scientifically Literate,’ ‘Sophisticated’ – MIT
- Battlefield of Misinformers, Dissenters & Stakeholders of the Jab Narrative – TrialSite
- Authoritarianism advances as world battles the pandemic – AP
- Chaos in Melbourne as furious protestors flood the city – Daily Mail UK
- Mass Protests hit Greece, France over new restrictions, vaccine mandates – MSN
- Vax Deaths in the UK 407% higher than all combined in past 11 years – MHRA UK
- Vaccines Could Be Spurring Variants, Say Israeli and European Experts – Epoch Times
- “It’s time to renew the indoor mask mandate, including those who are vax’d” – NYC
- European stocks slump as travel companies tumble on virus worries – MarketWatch
- Dow sinks more than 700 points Monday over COVID-19 fears – ABC News
- Biden wants spending & infrastructure to boost economy, GOP to block vote – AP
- Bank Data Reveals Terminally Broken US Financial System – Confounded Interest
- “Fear” Nears 2020 Highs As Stocks, Bond Yields, & Crude Crash – ZH
- There is your volume deterioration in one chart – Helen Meisler at Real Money
Let’s move on to a technical analysis of the Dow and S&P 500 charts. To view a larger version of either chart, right-click on it and choose a “view image” option.
$DJIA Dow Jones Industrial Average weekly chart Jul. 19, 2021 close…
Excerpt from the Jan. 25, 2021 weekly chart analysis:
“We must wait for this week’s candle to finalize in order to confirm any near-term trend. The StochRSI is in overbought territory and shows the first sign of a potential rollover. TheDMI-ADX is positive but indecisive. Volumes are not telegraphing anything specific. The 50 Exponential Moving Average (EMA) is at 28,120 in an upward trajectory. The nearest level of support is the 0% Fibonacci (28,568) and 28,900 lateral. The price action closed at 30,960 this afternoon.”
The Dow printed a 31,121 high and a 29,856 low for the week of Jan. 25, 2021, and the following week, it closed higher at 31,252. The chart rallied up to a Pennant pattern and broke out into a Descending Broadening Formation that printed a high of 35,092 ten weeks ago. The Hanging Man candle appeared two weeks ago, and a Plunger candle printed an Adam and Eve Double Top at 35,090 last week and closed on Friday at 34,688. Today’s price action plunged 945 points and clawed back to a 726 point loss with a 33,962 close. That was volatile, 3,000-point range since Jan. 25.
The price closed on the 38.2% Fibonacci Extension today and is closing in on a lower trendline drawn up from the Jan. lows. The next levels of price support rest at the 33,272 lateral drawn back to a tweezer bottom in mid-June, the lower trendline of the Descending Broadening Formation, the 32,248 Fibonacci Extension, and the 50 EMA at 31,680 as of today.
The DMI-ADX is threatening to cross into a negative trend, the StochRSI is collapsing, and this week’s volume print has another four days ahead of it. The most important near-term support is the tweezer bottom lateral noted above. The trend is leaning towards bearish because of pandemic fears reemerging, and the price action has proven to have a volatile habit. Caution is warranted with a visit to the 50 EMA on the table.
$SPX S&P 500 weekly chart Jul. 19, 2021 close…
Excerpt from the Jan. 25, 2021 weekly chart analysis:
“The S&P 500 is nearly identical but slightly more bullish than the Dow… This is not the time to layer-in long-term positions. I suggest sticking with brief scalping opportunities in either direction until the short and narrow Up Channel on both charts break up or down.”
Once again, the S&P 500 is nearly identical but has a different topping pattern that is less bearish than the Dow. Don’t be fooled into complacency because it has the potential to break down quickly. After the price action exited the Jan. 25 congestion, an Up Channel formed and it has the same Hanging Man and Plunger candle duo as the Dow. The price is teetering on the lower trendline of the Up Channel with a close at 4,258. The next levels of support are the 4,060 lateral drawn back to the mid-May lows, the 50% Fibonacci Extension at 3,994, and the Fibonacci Confluence and 50 EMA with a range from 3,874 to 3,853.
The volume has been in a downtrend since the Mar. 2020 low, the DMI-ADX is threatening a cross to a negative trend, and the StochRSI is rolling over. Caution is warranted with a potential visit to the 50 EMA.
When the Biden Administration Knocks On Your Door – AwakenWithJP
Plan Your Trade, Trade Your Plan
Headline Collage Art by TraderStef
NONE of the content produced by TraderStef, staff members, or any services associated with this website should be construed as financial or investment advice. Financial investment is a risky endeavor and may lead to substantial loss. Always perform due diligence before undertaking any financial decision. Not a Financial Advisor. Copyrighted Material – A “by TraderStef” credit linked back to this website is required when using any quotes, written material, technical analysis charts, or publishing a full version of an article.
2 thoughts on “Dow and S&P 500 on Jabbed Life Support – Technical Analysis”
Comments are closed.