US and Euro stocks mounting one more rally before crashing?

Dax pennant is broken, so now the way is pretty clear to 11,500 if we fall lower today. Dow looks clear now to fall to 26,000. Whether it is today or not remains to be seen, but surely there is a lot more downside to come this week. 920 is the key support level on Dax this morning, so unless it double bottoms, we could well see 11,500 today.

This is playing out nicely, Dax already 170 pips down from its high today. Those looking for support on Dow, I have around 344 as a potential level which might bring buyers in, and below that around 300, below which it should put in new lows.

It's worth noting that the dollar seems to be in an inverse relationship with stocks atm, so equities down dollar up. The $ index is at or near a resistance level on its hourly chart today, around 9,572, so if it holds, it might just check this downward push in equities we have seen so far today. We shall see.

Following yesterday's pin bar and now this tight turnaround on the Dow at the NY open, I think it's headed back up to at least the 26650 area, or, given the magnetic attraction the 76.4 fib seems to have, it could go right up to 26775 or beyond.

Well that didn't turn out as expected on the Dow - I thought after Monday's bullish bar it would at least climb significantly higher before turning south again. Next!

Yesterday screwed a lot of people into thinking we had turned bullish again, but it was a typical pullback to shake out the shorts as it came out of nowhere as far as I could see.

What you've got to look at is that the Dax pennant I drew has now been smashed, and once the price narrows into the apex of a pennant, it rarely breaks out of it just to move back into it. Usually, once a pennant like that is broken, you get a pretty sustained move away from it. Also look at the Dow now, a significant fall away from that double top, which did briefly sucker many into thinking it had been broken to the north, myself included, but in reality it was just playing games with us because just as it was looking like lifting to the stars, down it came. How many times have we seen that!?

For me, the crash is on, or at least the start of it, and the mainstream media, the banks and the hedge funds will all claim, as they always do, that no one could possibly have seen it coming!

Yes, Monday's bar was a brilliant fake and it's so easy to get suckered in to it as you say. I did think it would go higher before crashing back down - fortunately I had a stop just below that range which played out this morning. It seems it's now found temporary support at 26000 - but I think there'll be one leg lower to go after this pullback and then after that is complete there should a significant retrace. Then, when that has played out, there will most probably be the sharp 1000 pip drop (without much in the way of pauses on the way down) that we've all been waiting for.

From my post 28th Sept, and only now, this evening, is the mainstream media beginning to make some noises about an October stock market crash potentially unfolding, but only after the Dow Jones has just fallen over 600 pips in the last few hours. We may yet pull back, but the Dow Daily chart is looking like there will be at least another 600 pips to come, wiping out three months of gains in just a few days, and even if it does rally, is it going to get back up to and break above the double top? To me it seems doubtful.

The 2008/9 stock market crash actually began on October 11th, 2007.

Food for thought.

Dax has hit its weekly 200 sma, so we'll see if it holds. As I type 10 mins off the Frankie open, it is rebounding off it

That's all from me on this thread. Good luck, and hope you caught the top of the market.

Can't believe none of us saw this coming!!

As ever, the MSM will never see anything coming. Especially the broadcast media - having worked in a 24hr news gallery for over 12 years it became evident that none of the journalists/editors/producers were really willing to step out of line and give serious airtime to what might be called the contrary perspective. They're all too afraid of losing their access if they go out on a limb and the management just want to keep their head down and climb the greasy pole. It amazes me when people comment that the BBC or Sky or ITV or CH 4 are too left wing or right wing - they're all straight down the middle. Get an unfettered Max Keiser on Sky! That would be very funny - especially watching the autocuties flounder around trying to ask "intelligent" questions.

Thanks tomase for that very interesting insider perspective.

Personally, I give the msm scant attention, which unfortunately cannot be said for most of the rest of the population. Things are changing with the advent of social media, though this has its drawbacks due to a news overload coming from many different angles against which the MSM has launched a disparaging campaign by branding it all as ' fake ' news to the extent that nobody knows who or what to believe anymore. Even as late as Wednesday morning, the BBC business news which I listen to briefly each morning when I get up, was referring to global stock markets as " soaring at record highs ", so one has to ask where the hell they get their information from!!

Anyway, one last word from me. This is just the beginning. Prices may/should pull back, but I believe we have seen the highs. Sometime next year, perhaps even sooner, the main crash will hit. Valuations could fall 50-60%, plunging the Western world into deep recession, will will be particularly severe in Britain due to uncertainty surrounding our exit from the EU. With many households in the UK one pay check away from losing their homes, and with household debt at record highs, we are in for one hell of a shock, and it is just beginning. As traders, we will be among the least affected, our profession of course being recession proof, but alas for many, things do not look quite so rosy.

Tighten your seat belts, and enjoy the ride!

Sell the rally? very tempting

I know I said I'd finished with this thread, and I have, as I believe the markets have topped, but thought I'd post this.

The S&P, and the power of diversion, so often the first signal of a direction change.

Stock markets peering over the precipice this morning on some very big support levels. Will they hold, or are we in for more big falls this week?

Dax is certainly in real trouble this morning, and to me, the way now looks clear for it to fall to 10,000.

One more thing concerning Dax. There are pundits, most pundits I would say, claiming current downturn is a just a healthy, long awaited pullback before stocks push much higher. Look at 2015 they say, and up we went again.

I do not agree. 2018 and 2015 are very different for various reasons. A/ We had Trump in 2016, and that provided a major boost to the markets.. B/ the Fed has begun pretty aggressively raising interest rates, and C/ the technical dynamic are very different now. The Dax dropped to support in 2015/16, and that support on my weekly is now resistance. Also, look at the monthly MACD diversion now on the Dax. All points to further falls, maybe not the big crash just yet as there could well be a pullback, but if not this year, then next year for sure.

Right now, Dax has hit its daily S3 pivot, and it has diversion with MACD on the H4 and H6 time frames, so that could be the lows for today. If not, then there is a long way to fall for sure.

I think the Dow could climb back as high as the 25860 area in this retracement - time will tell. Whether or not it reaches that level and whatever level it does reach, look out below - because I think there could be a much steeper and more vicious fall from there. Maybe 3000 pips or more but almost certainly below 23140.

We all expect rebound, claiming correction is fake. Ironically, the market will make sure we believe in correction and only then reverse

One of the best diversion calls by someone on FF. good one CAT... In the background past month's and we do read and Pay attention.

I'm not quite sure I understand exactly what you mean, but I made a bad miscalculation in that post. I thought the Dow had reached it's low for now but it obviously still has further to go.

Quite a rebound on the Dow, 2000 pips off the low as I type, and already I know people screaming ' NEW HIGHS...30,00...40,000 FOR THE DOW "

They may be right, but I'm not one of them, and until Dow breaks new highs, for me, this is just a pullback before we go lower, and part of the build up for the big crash of 2019-20.

My highest resistance level, beyond which I will begin to concede that US stocks are headed for new highs, is 26,630 to 27,000. Higher than that, and yes, the Dow is heading higher. However, it may not even get to those levels. Watch 26,285, which is the 76.4% fib level from the highs. If it gets up there, then anywhere from that level up to 27,000 is going to be really interesting, because this is going to be the area where the major battle between the bulls and the bears is going to be fought.

So for me, we're still on course. I do not see new highs in US stocks, and I think the markets are shaping up for the mother of all crashes.

ps - don't underestimate the significance of the current pa on the Dow, and the same can be said for all the major US and Eu equities. This up move is the big test. Either this breaks to new highs, or it fails, but if it fails, then in my opinion, that is as high as the prices are going to go before they fall 40 to 60%. The next week or so is going to be one of the most important periods in the history of the stock market. Yes, this sounds a little melodramatic I know, but I believe it could be a defining period.

I called the top on Bitcoin, I called it on the Dow, now let's see if I can get lucky again!

pps - Anyone trading the Dax 30, the pullback has been pretty shallow so far, and I'm looking for a possible turn around level, but it's difficult, especially with the Dow up around these levels. I would expect Dax to move higher though, perhaps to around 11,880 - 12,000, which I guess would also see Dow moving up close to the critical levels I mentioned above.

Just to add to your projection of the 26630 to 27000 area as resistance on the Dow (presuming it blasts through the 76.4 fib level), an EW projection would take it up to the 26680 area - the distance travelled in wave A (1600 pips) being equidistant to the length of wave B to C after, in this case, 5 waves down.
That of course is only valid if it's not on it's way to making new highs.