Ian Woodward's Investing Blog

Stock Market: Major Shot Across the Bow

Yes, this was a Major Shot Across the Bow as the Market Indexes dropped down for most of the day.  Net-net the Bears had control today, and we shall see if they can continue to take the Market down:

Bow Picture

This next Chart shows the damage done today in the Major Market Indexes:

Bow Indexes

Most of the Indexes suffered greater than 4 Buckets to the Downside, and the RUT was one of them:

Bow RUT

…and here is the picture for the LOW of the day with the RUT.  Richard B. from Thailand taught me back in November to keep a beady eye for the %B x BW to fall below “Zero”, so both these charts are a tip of my hat to him, as they don’t get below this level more than twice in any one year.

Bow RUT2

It’s now time to pay attention to the downside targets from the Highs.  I’m sure you know by now the natural targets are -4% and then -8%, so here are the Measuring Rods using the Nasdaq:

Bow Nasdaq

Here is the picture in a nutshell of the damage done today as portrayed by the HGSI Software:

Bow Bollinger

This picture of Grandma’s Pies clinches the story for you with a 2:1 ratio to the downside:

Bow Pies

That 5.4 Buckets down on the S&P 1500 says it all, and now we have to wait and see if the Bears can really take control and take this Market into a full correction, or whether this was only a flea bite:

Bow Pat

It goes without saying that the road to the Highest Jump Targets were hit hard today and as a result we have only the DJIA Above the Higher Jump Target, whereas there were seven just a couple of days ago:

Bow Spreadsheet

Please remember that the Jobs Report comes out on Friday and we shall see where this Market goes.

Best Regards,

Ian

2 Responses to “Stock Market: Major Shot Across the Bow”

  1. Paul R Says:

    Ian,

    Looks a decent hit to the market. The JIRM index we created at the seminar really took a beating. It will be good to watch the JIRM index to see if we will recover.

    As always a superb blog and looking forward to the October workshop!

    Paul R

  2. Richard B Says:

    Thank you very much for the hap-tip Ian, though it’s your Woody indicator that is such a gift to us all!

    I’ve been watching the weekly RUT Woody (%B*BW) as usual, and it peaked at level that could well be a top on 15 March. Since then it’s been falling in the way it often does after an intermediate top in the RUT. The weekly RUT high jump also peaked on 15 March at around 30% above the 200 week SMA and 15% above the 50 week SMA, both important levels in recent years.

    The daily RUT Woody hit -0.22 on Wednesday so a bounce upwards seems likely, which might point towards a forming head and shoulders pattern, a failure of which to hold could again favour an intermediate downturn of several weeks in the RUT.

    Of course, this could all just be a relieving of extremes in the weekly RUT indicators allowing room for another move up, but I am wary of the possibility of an intermediate down turn lasting (for now) into mid/ later May.

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