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Chaos Clinic Recap

Here are Al's comments

     Four Signs of A Bear Market
     Chaos Clinic for 8/16/2019

I am a believer that the Universe gives you signs. Some say your spirit guides send them. I don't know for sure
that I have spirit guides, but if I do, one of them is surely Chief Little Raven. He was an Arapahoe chief who
worked for peace between his people and the settlers in Denver. There is a monument to him at a trail head
near Brainard Lake, where we go camping. On the first weekend of August, we went camping. This
included a hike up to "see the Chief." I always talk to him, since I admire him. Sometimes I imagine that he talks back.

The next morning, I was walking the dogs in the camp ground, and I saw something I've never seen in the wild - a bear.
Fortunately he did not see us. He was leaving the campground, heading south.
I couldn't help but think that this was an omen of a Bear Market, courtesy of Little Raven.

OK, that may sound a bit crazy, but these three charts are three more signs of a bear market. The top chart is
the GLD exchange traded fund. It began moving up in the fourth quarter of 2018, about the time the S&P made its
2018 high. It looked like money was starting to flow out of stocks and into gold. I pointed this out in my 11/30/2018 Chaos Clinic.
I've mentioned gold several time since. In my 5/31/2019 Chaos Clinic I said it looked like it was starting a major move,
What a move it has been. And it has much more to go.

The second chart is an 8 hour bar chart for SPY, over the last 4 months. The rally to the All Time High formed a very clear
rising wedge. I pointed out a topping pattern in the S&P futures in my 7/19/2019 and 8/2/2019 Chaos Clinics.
Since then, the S&P has been wild, dropping sharply twice, and is now in what looks like move 3 of 7 of a down Chaos Clamshell.
The 800 point Dow decline this week, blamed on the inverted yield curve, really spooked investors.

Significantly, this drop has turned the 24 day EXMA down. The last swing of it was about 60 days, so a down move of
60 to 90 days is probable. And this could be just move 1 of a larger Chaos Clamshell.

When the market turns down, many long term traders hedge their portfolios by using S&P short Exchange Traded Funds,
such as the Proshares SH. So I watch it for signs of this sort of hedging. The third chart is an 8 hour bar chart for SH, It shows
that recent trading has turned SH up, forming a move 1 and 2 of 7 in an up Chaos Clamshell. The low at 2 held above
the 12 day EXMA. so further advance is probable.

Together, all this tells me US stocks are in a bear market.
For more on my work, see
Besides the comments made by Al, the chat room has live
comments from other traders who sometimes share their views,
trades and tips. Below are the chat room comments from this clinic

8/16/2019 2:00:55 PM MT bew:: right after I posted the drain opened. I got out before. I look forward to next week
8/16/2019 1:57:09 PM MT bew:: well , I guess the money came into the market, the moon tides influenced them
8/16/2019 1:39:02 PM MT nby****:: have a good weekend bew
8/16/2019 1:34:59 PM MT nby****:: out -2
8/16/2019 1:23:47 PM MT bew:: I went long about the same time.
8/16/2019 1:07:53 PM MT nby****:: bought 89.25
8/16/2019 12:34:36 PM MT bew:: So the question is there more money to push it higher or are people going to start taking profits?
8/16/2019 12:30:32 PM MT nby****:: out -.5
8/16/2019 11:36:52 AM MT bew:: I am. I looking for a trade with a change of direction at 14:59
8/16/2019 11:20:54 AM MT nby****:: long from 2888.5
8/16/2019 11:06:13 AM MT nby****:: anybody still here?
8/16/2019 10:23:27 AM MT Al****:: I'm going to call it a day. Need to get ready for vacation.
Next week my son Mark will be doing the hotline. No clinic on Friday.
Thanks for coming. See you in 2 weeks. Take some courses.
8/16/2019 10:12:23 AM MT Al****:: the main reason I covered is that the stall came on the Sun and Venus electric field flux lines on the SPSunMoon chart
Flux line software for NinjaTrader 8 is available at
8/16/2019 10:07:42 AM MT Al****::

I didn't like the stall, so covered #2. Here are the results
exported from my Interactive Brokers account:
ES BOT 2 2878 14:22:47 20190816
ES SLD 1 2886.75 15:16:33 20190816
ES SLD 1 2886.5 16:00:20 20190816
8/16/2019 9:55:51 AM MT Al****:: OK, got good gain on 1, profitable stop on second; taking a break to walk the doss.
8/16/2019 9:18:32 AM MT Al****:: stop on remaining 83
8/16/2019 9:17:07 AM MT Al****:: stopped out on 1 of 2
8/16/2019 9:07:11 AM MT Al****:: hope springs eternal today; stop 86.75
8/16/2019 9:02:10 AM MT Al****:: even bear markets have fast rallies. On any given day you may get a big move counter the longer term trend.
8/16/2019 8:59:54 AM MT Al****:: stop to 84.75
8/16/2019 8:58:50 AM MT Al****:: this is what I mean about direction: it's all about "for who long?"
8/16/2019 8:57:30 AM MT Al****:: client BOG has been teaching me how to use one of the many charts on this site: the S&P MoonTide Harmonic Grid chart. She trades options, and tells me it helps her set strike prices; It suggests today is up, but Monday and Tuesday may be down.
8/16/2019 8:49:01 AM MT Al****:: stop to 2881, lock 3
8/16/2019 8:46:10 AM MT Al****:: oops, r2 is 2900 -moving cover
8/16/2019 8:44:26 AM MT Al****:: stop 78, cover is on 1 of 2 conttracts
8/16/2019 8:42:00 AM MT Al****:: my stop is 75, cover 90
8/16/2019 8:39:48 AM MT Al****:: the Flash Boys bought R1; looking to rally to R2/R3; "pit" prices are on the SP1Day page
8/16/2019 8:31:14 AM MT Al****:: MoonTide trades are day trades, not swing or position trades; the direction is only for a few hours
8/16/2019 8:26:24 AM MT Al****:: first MoonTide trade a long at 2878
8/16/2019 8:05:07 AM MT Al****:: it's always a battle between hope and fear: Tuesday was hope; Wednesday was fear; fear moved the market a greater distance
8/16/2019 7:57:00 AM MT OA:: Thanks Al, I am looking forward to what today brings.
8/16/2019 7:51:27 AM MT Al****:: OA: direction is relevant to time: that's why I use rainbows of EXMAs. The 24 day, 12 day, and 6 day are down; the climeate is fearful
8/16/2019 7:38:12 AM MT OA:: Also do you think Friday will be a big move day or a small move day. Lastly do you see the direction as down or up. Thank you
8/16/2019 7:36:25 AM MT OA:: Al what do you think of a low on the 17th August followed by a rally into September.
8/16/2019 7:26:59 AM MT Al****:: BOG: I don'tknow which is correct; they are just different models
8/16/2019 7:19:59 AM MT BOG****:: Good Morning Dr. Al and Good Morning All. Please Dr. Al why does the Xtide show a high next week Friday but Harmonic Moontide shows it as next week Friday. Which one is correct? Thanks.
8/16/2019 6:11:25 AM MT Al****:: GM all. Good luck today.
Chaos Clinic is posted on the AUX page.

9:00 Eastern-System: No comments

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