Back in Mid-December (2018), I had a theory, a strong one, and I wanted to get my clients’ attention so my article title – uncharacteristically – was total click-bait: Why Do I See A Flash Crash Coming?
It was a market timing call for a correction/drawdown/flashcrash … FOR IDES OF MARCH 2019, even though it was only December 12th at the time of my writing. You may think I misread the December 10% correction for March. Nope, I called that too. And the “rip your face off rally” that followed.
Here’s what I wrote – again December 12, 2018:
This is the NYSE Composite Index – on a Weekly timeframe. Look carefully at the red circles – both top panel red circles which indicate a 50/100 EMA crossover and bottom panel which indicates a MACD rollover below the zero line. Oh, except for that one EXTREMELY OVERBOUGHT spike in early January which is what I used to call the January Swoon ;-).
Point of this exercise is to have you focus in on the yellow dotted lines that follow the red circles in the MACD box. Do you see how the 50/100 EMA crossover occurs with a severe market drawdown or waterfall? And how the MACD rollover below 0 foretells the danger? ALL THREE TIMES?! What about the 4th?
Ah, that hasn’t happened yet….But the patterns leading into 2000, 2008 and 2015 strongly suggest a 4th significant market drawdown event is forming.
Here is the chart I presented 12/12/18:
How’d I do?
The market exactly hit Red Bullet #4 dotted-white-line on that fateful Christmas Eve Massacre. And we crashed down into $10,724 white-box-arrow on the NYSE composite.
So then what did I predict after predicting we would drop – and before we even dropped? That we would have a “potentially violent” bounce.
CHECK! Just so happens we have bounced 19.9% in two months. I would call that violent!
Where did I predict we would bounce – after crashing to my Red Bullet #4 that is?
“then bounce back into a 50/100W crossover
Did I give a level of price target for NYSE?
I wouldn’t be surprised if we bounce back into the 12,400 area which is 10/21 Mo EMA crossover
And Here We Are
So Now What?
Let’s go back to the above soundbite all written December 12, 2018 and finish the sentence:
I am projecting we pull down into that trendline support below the 100W EMA (white box and arrow) then bounce back into a 50/100W crossover BEFORE POTENTIALLY AND VIOLENTLY CRASHING LOWER IN Q1 OF THE NEW YEAR.
Possible Crash Timing?
Remember the Ides of March: Bank Reserve Ratio Reports, FOMC Meeting, Trade Tariff Deadlines, Trump, Fed, China, BREXIT … point is, I will be watching the Macro, Fundamental, Intermarket and Technical background very closely to see how a trigger can justify my market timing call for a “Flash Crash” in Q1. just like I saw, alerted and traded with you in January and again in October of this year!!
Three months after this client post, we are approaching March 15th and I expect the Ides of March to be eventful. Clients of LaDucTrading will receive my market-timing calls with both my macro narrative and technical levels to trade against.
If you were a client during my market timing calls for the 20% drawdown from Oct 3rd to December 24th, and rally from December 26th to now, you are very happy that you were. If you are not receiving at a minimum my entry-level membership ($150/month), then I strongly urge you to consider.
- Gone Fishing Newsletter – my macro-themed reports that present what is moving and my perspective on why.
- Intermarket Chart Attack – my selective relational study work that identifies trend reversals (like this) for low-risk entries.
- The Week Ahead – key market-moving events for the upcoming week and how to trade them.
Thanks for reading and please consider joining me in the LaDucTrading LIVE Trading Room where I take macro and market-moving news, give it context, and recommend trade ideas from it. For additional education, I provide my LIVE Trade Alerts from Interactive Broker to clients interested in my Value and Momentum stock and option plays.
At LaDucTrading, Samantha LaDuc leads the analysis, education and trading services. She analyzes price patterns and inter-market relationships across stocks, commodities, currencies and interest rates; develops macro investment themes to identify tactical trading opportunities; and employs strategic technical analysis to deliver high conviction stock, sector and market calls. Through LIVE portfolio-tracking, across multiple time-frames, we offer real-time Trade Alerts via SMS/email that frame the Thesis, Triggers, Time Frames, Trade Set-ups and Option Tactics. Samantha excels in chart pattern recognition, volatility insight with some big-picture macro perspective thrown in.