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China Stock Market Crash in 2020
Broader markets significantly week day we have clearly undergone a sentiment shift a momentum shift a cycle shift and the Bears have come out to play so there's a lot to be looking at in the bigger picture for me I'm focusing on two time frames the hourly downtrend which is my guide for swinging my espy excess position from Thursday which I am still in
the weekly uptrend so for any individual name those are the two time frames that I'm looking at right now so what do we want to talk about a whole lot of stuff I'll talk about my personal trades in just a second because I'm trying a new style that is working with my conviction of holding these swing trades longer-term knowing that I have to sit through bounces let's start that out right now so for me my problem is running the chair guys running the chatroom live-streaming multiple times a day I'm always in front of the computer and I see bounces shaping up on the hourly time frame so if I say to myself I'm gonna hold s pxs as long as we are in a downtrend on the hourly time frame for spy I know that I have to sit through hourly oversold bounces and watch my account value drop I don't like that so what I have been doing today most notably is getting into positions where I would enter spxl while holding s PX s because s PX s the bearish ETF I'm basing it off the hourly time frame and I was entering spxl trades based on the shorter term time frames so what I did here at the end of the day just an example is I was looking at this setup for the support to hold here
A bit of an inverse head and shoulder setup and I ended up entering I was a little bit later than I wanted to be but I saw this little two-minute lower low with no follow through this green candle and I said alright I'm entering spxl and I'm putting my stop under this 2-minute low very low risk if I'm wrong and I stop out I take a small loss on spxl in my account grows because of my SP excess position if I'm right in this instance my spxl position was greater than my SP excess position so I made money even though my position my portfolio was all gold GLD and SP access my account value went up on this bounce because I had a bigger spxl position I exited it before live-streaming at the end of the day so I could focus on things I used this two minute volume climax as my signal to exit and then the account continued to grow at the end of the day on this pullback so it might be counter intuitive for some people saying why are you holding Bull & Bear at the same times it's the difference of time frames and for me it worked really well today I'm gonna do it more to keep conviction on longer-term trades while still capitalizing on short-term volatility so we had the five minute downtrend on spy we had to gap down open for buying first thing brokers were really slow we could anticipate that was gonna be the case because we knew it was gonna be a big volume day and I ended up trying to enter Tesla right at the open and fidelity rejected my order.
China Stock Market Crash
There were a lot of issues on a lot of brokers but we ended up with a five minute higher low bull flag attempt fail the high of the day loss of support we never saw a five minute higher low and higher high the entire morning the entire afternoon until pretty much after 1:30 so that means we had four hours of five-minute lower highs and lower lows all morning which again helped keep my conviction as a bear knowing that we are still in a very clear hourly downtrend so I will continue to hold SP excess as long as we are in an hourly downtrend I personally am comfortable buying extreme dumps when daily RSI is oversold as well and if you remember the end of December 2018 where I was scaling in
Buying that dip it's because the daily RSI was so beat up so I'm not ready to go bullish and look to buy tips yet the hourly RSI is out the window for me I don't care what the hourly RSI is saying it's proven to me that it is no longer useful in this current market cycle the previous market cycle hourly RSI in the 20s mid to upper 20s was a great buy signal but we know that that's out the window now because this is not the same market environment that we have been trading in the past few months this is now most comparable to the end of December 2018 dumped so if you want comparisons how did it play out then what did gold do then what did the volatility index do that's where you want to be compared to we are still in a weakly uptrend for spy this support level of 320 73 is the level that the Bulls must hold we ended today with an hourly lower high being set
and a week closed Bears would love another gap down open it's all about 320 73 tomorrow if that level holds were then going to be watching for a head in shoulders for all of the next couple of weeks if it doesn't hold we lose the weekly up 10 for the first time in 14 months which is a notable shift in the market if we lose the weekly uptrend I'm going to zoom out and watch the monthly uptrend knowing that anything above 2 84-82 is a monthly higher low and we're not anywhere near losing the monthly up China at this point so short-term the hourly downtrend is guiding my current positions not GLD we'll talk about in a minute and longer-term 320 73 weekly support is the most important level a lot of individual names today formed the low of the day the high of the day an hourly higher low and then an hourly lower high some names like spy and the financial sector dropped to lower lows so it's important to distinguish who formed an hourly high or low.
China Stock Market Crash
Who dropped to a lower low in the middle of the day we can make a list names that have the higher low on the hourly or stronger than names that don't so that's my current gameplan I will be looking to buy dips in this market pullback if we gap down open tomorrow I'll be interested because the four-hour RSI will be down in the teens the daily RSI will be close to oversold but not there just yet but I'm being a little bit picky as a bullets it's time to be a bear for me personally it's been a long time hi WM one 6003 is the weekly support level and the difference here is a break of one 6003 would then confirm the weekly downtrend if spy breaks three 2073 support we lose the uptrend but we're not confirming a downtrend yet if we're gonna confirm a weekly downtrend spy has to at some point bounce fail the all-time high and then drop to a lower low IWM is already looking to do that high low lower high and if one 6003 breaks we are then in a weekly downtrend so that is the key support level hourly resistance high of the day did break at the end of the day but only by eight pennies that's a double top Bulls would have to hold the low up today
and break the high o today to change the hourly trend tomorrow when we change our early trends we zoom out and we look for a daily lower high to be set on the bounce trading view have some of these big upper wicks on these daily candles we have to ignore those and zoom in if we want the actual high of the day QQQ held up better than the financial sector today lower the day high the day on the same starting candle higher low we didn't drop to a low of the day lower high hourly equilibrium to end things where as XLF how early lower low was very clear a couple times today I used Excel F and QQQ as a bit of a visual guide to say okay are the Bulls gonna be strong on this bounce are both of these sectors breaking their high of the day
and first thing this morning XLF had a double top that was the first initial little red flag it ended up breaking it eventually but clues to be gathered by watching how these two sectors are interacting with each other and clear hourly lower highs on XLF XLV all about 98 81 that is our weekly support it will be a double top and a loss of the weekly uptrend if that level breaks so just like IWM XLV has the potential to enter a weekly downtrend all about 98 81 another factor is this all coronavirus or is this Bernie gaining as the front in the Democratic Party doesn't matter it's both
China Stock Market Crash
The price action is what matters most the headlines definitely spiking some fear with coronavirus but without a doubt the more likely it becomes that Bernie Sanders is going to be a the Democratic candidate and B has a potential chance to win the presidency the market will start pricing that in months in advance before the election and there are trades that we can make based on who's going to win if Trump's gonna win the markets likely going to respond bullish if Bernie's gonna win we're gonna look to short the biotech sector we're gonna look to go long the MJ sector there's gonna be all kinds of plays but that is nine months away at this point too far enough for me to care about we could all be dead xbi loss of the daily up up trend weekly timeframe anything above 80 805 is a weekly high or low Bulls have a lot more space above this weekly support level than a lot of other names do but it does have the double top as well double top by three pennies must hold ad 805 or it is a clear shift in momentum s MH 136 96 weekly support look how many of these major sectors are right on the verge of their weekly support trying to battle to defend this weekly uptrend while bears are trying to knock that uptrend loose 196 136 96 hour the time frame high of the day double top at the end of the day and back down towards our early support tightening our the equilibrium the VIX huge day and a fairly strong close how will the uptrend still intact hourly higher low of 20 to 90 bulls need to break 26 40 and then we're looking back at December 2018 levels 3620 we changed the weekly trend higher low higher high took out a bunch of short-term levels or levels over the last few months
And now it's all about December 2018 levels there will be an opportunity to short the volatility some volatility sector just like there'll be an opportunity to go long stocks eventually just not sure we're there yet golde big bold move vol climax big upper wick we've seen this before this was on a Sunday when this happened this is a Monday for our uptrend still intact exponential 12 period support still holding if we lose the four-hour uptrend we zoom out
And we look for a daily high or low to form tons of space for the daily and weekly uptrend my GLD position long-term is based on the weekly uptrend my stop is under 1547 and I will move it up if we set a weekly high or low gold on this move has come within 14% of all time highs it's gonna be a race to see who can hit all-time highs first gold or Bitcoin silver big upper wick for our up tens intact lose the four-hour uptrend we zoom out
China Stock Market Crash
Look for a daily higher low to form who's stronger gold or silver the answer is gold although that we did gain some ground for silver at the end of the day but what we have here is a bear break with no follow-through a bear break with no follow-through which is keeping the gold bulls comfortably ahead of the silver bulls at this point that being said that's also a double top now so we're gonna look for a tightening range see what the twelve hours doing whatever timeframe you find the most clarity on we're looking for a tightening range to dictate short-term direction on who's stronger of the metals bull miners huge gap up open lots of profit taking we're in an hourly downtrend low of the day was our hourly higher low we failed to break the high of the day
And then on increasing bear volume we dropped to a lower low so an you GT which is inversely correlated to spy is weaker than spy today it's inversely correlated significantly but that hourly downtrend while spy is not in an hourly uptrend that's a notable difference the long-term resistance of 45 10 we want to look at the non leveraged ticker of GDX because time decay is a factor why does that matter look 30 96 we broke it
And you GT didn't come close to breaking it that's time decay at work - why you always want to be charting levels on non leveraged etfs there are many times where I will trade a leveraged etfs off of the non leveraged levels oil bounced right winds 5 ounce today significant correlation on the bounce and the bounce was stronger it was a v-shaped move where as spy started v-shaped it had a little hourly or a little 5-minute higher low
And then continuation the oil move was just bulls but we're still an hourly downtrend we have broken some hourly resistances but we must hold 50 43 and break 5165 to change the hourly trend back to the bulls natural gas looking for a daily higher low deform no sigh of it at this point and then above 180 is a daily high or low hourly trend change has to take place we had an hourly equilibrium a bear break with no follow-through Bulls have to break one eight six five and one eight eight four for the daily high or low to be set that's where we stand in the overall markets come join us in the chatroom if you want to talk about markets today was a very fun day I love live streaming on days like today lots of discussion going on thanks for tuning in do good things we'll see you tomorrow have a good day so I converted my dining room into a grow room because who needs a dining room these days so I install the light
And stow far I'm starting peppers and celery and tomatillos and eggplants tomatoes will come next gotta start some flowers soon some yarrow and some lavender and I might install another one up here and that way in the winter I can grow stuff as well so about two weeks ago there was one lone frog out here croaking by himself and I ended up putting the speaker's out here and putting some other frogs on quorum to do is clearly early and alone but he found somebody because that is a big stack of frog eggs it will eventually turn into tadpoles in a couple weeks and we'll see if they're able to survive in this moving water last year I didn't see any tadpoles in here but there were also chemicals in here last year which I stopped using early flowers as elderberries getting its first leaves on shout-out to chart guys members jungle funk and Joshua who came over and stayed for a week and helped me plant a bunch of these bulbs so they're all coming up around the walkway and we did this whole patch over looking the pond as well and some of these are starting to come up in flower really early.
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