In the menu of this site, you will find a link to the Halloween Focal Point chart. The chart is looking for a volatility event around the end of March. While this is within the window of the longer term T that is scheduled to last until April 29, these new developments can make that April T a Bear T. The short term T that was scheduled to last until February 5 has not turned into a Bear structure yet, but is approaching such an ending. If the VO moves below -79, this ending short term T will be a Bear. In a Bear T, you have a lower VO, and you also have price move lower, with a strong rally and collapse at the end. (If my original calculation on this short term T of January 29 was correct for the end of this T, we would have had just such an ending last week.)

This alarming focal point chart is very similar to the one I started posting in November of 2019, and which was referred to as the Spooky Halloween Chart in posts on this site beginning on a page reserved for 2019 posts .

I called last year’s formation the Halloween Chart because it became evident to me on November 1, 2019, and yes, it was scary. The following chart shows both Volume Oscillator focal points together, but with an early, exaggerated move on the present focal point as it appeared at 5PM Friday.

The present Volume Oscillator has been revised since Friday’s close, and the 2020 Halloween chart, with a focal point coming in April, now looks like this:

The Volume Oscillator has not violated the lower green support line as much as Friday’s close showed. (This means that Stockcharts has changed its vendor for this information to make it more contemporaneous.)

The structure of the VO is acting very much like the one last year. I would suggest caution right now, having moved out of longs at 3808. While this week’s move bounced off of a very strong support line (the mid-Keltner on the present SPX chart is at 3696), the move up to 3740 afterwards was stopped right at hourly resistance.

My BPSPX chart, has moved to a sell.

My Simple Chart is just at the neutral level and not oversold.

The Confidence chart has turned down.

Last week I posted a Quick Note that I was closing longs, a note that we hit support, and then an later update that I did not expect that move higher to last. I don’t intendto make those type of posts a habit as they are not what an old and slow investor does. As an old and slow investor, I’m more concerned about preserving profits than taking lots of risk, and that is the caveat that comes with having read this far. Be careful, because I don’t think this move lower is over yet.

Stay Safe.

The mid Keltner line on the Companion chart is 3696. We have bounced off that.

Adding to this at 3:35. Most likely 3740 was it on this bounce. It’s likely that this volatility goes on for a few more days.

The live hourly chart I use in the above image can be found here.

Stay Safe.

I have removed all longs at 3808. With the end of the T coming close, I am preserving profits.

This is what my chart looked like when this post went live:

The high of the day was 381.93 and the 50 EMA was at 381.90.

There is definitely some craziness going on underneath this market right now.

Please check out the Bullish Percentage chart in the menu. And remember, I’m old and slow.

Stay safe.

Back on December 21, I posted that the ‘easy part’ of this move was over. I wrote:

My take is that we now know where a strong support zone exists [3688], and while the market may take a few days to stabilize, it should be somewhere between today’s close and today’s low.

If today’s low on the VO holds (and we won’t know what that number is until tomorrow based on late information from StockCharts), we have moved down on the VO for 41 days, and should move up 41 days. That would be January 31.

How do we have T’s that end January 6, January 31, and April 29? Because these T’s will no longer be easy to buy and hold.

The January 6 T ended a few days early (we were warned), the January 31 T is extended through February 5, and the April 29 T is still standing as such. But watching a 40 point drop yesterday morning was not pleasant even though we reversed and closed higher. We have climbed about 200 points since the January 7 full recognition of this latest T.

December 21 vs January 26 Main T Chart

Watching the main T chart since December 21, we can see the difference between how the McOsi (purple) and Volume Oscillator (blue) are viewing the latest action. The McOsi is showing us that we have now moved below the zero line with lower trending highs, while the Volume Oscillator has moved above the zero line, and has demonstrated higher lows. This is an intra-day chart of the VO, and it shows today’s movement as of 11:30, where the SPX was up, while the McOsi has yesterday’s closing. Even though the SPX was up yesterday, the McOsi was down. There’s a fight going on under the surface. (The best place to see its daily movement is on its site.)

Both the VO and the McOsi are derivatives of Up and Down Volume, as they are based off the MACD. Since MACD shows trends, days with little movement can give readings that are not consistently accurate, and they evolve as today becomes yesterday. It has a lag to it. While this doesn’t effect its ability to be effective on a long term basis, it can whipsaw you with ‘false positive’ readings.

What we still have is a good looking T through April 29. But with a hiccup coming in about two weeks. It is also good to keep an eye on that “Halloween Redux” chart in the menu, as it might be a good idea to buy some volatility when we approach the point on that wedge.

Going back to the XOM T mentioned in the January 7 post, we have had our 2 hiccups on January 14 and January 21. We do have a larger T that lasts through March 23.

As I’ve pointed out, it is normal for an asset to hit the mid or lower Keltner after passing above the top Keltner, and receding below it. (That is what should have happened to GBTC, and may be happening to it now). Within a bull market, expect bullish outcomes, and mid Keltner may be all the decline we get. But I would wait until MFI pulls back a bit, and RSI hits 50. MACD looks to be crossing negatively here (but keep in mind ‘false positives’).

Stay Safe

This site has been around for a year now, and I want to thank those of you who have been taking the time to read my posts. I plan to continue this site for a while longer, but the concept behind T Theory is very simple. For every period of market weakness there will be an equal amount of time of market strength.

Look for those patterns. Do what works. Simplify. Look for opportunity at market bottoms because they are safe investment periods. Read the “Introduction to T Theory” in the Menu. Allow me to quote Mr. Laundry:

“Buying into major market opportunities presents a similarly discouraging picture. You may have good reason to anticipate profits, but if a great opportunity does indeed exist, nearly everyone will be against you, including your friends, and the predominant opinion expressed by your peers, including people you respect, will be that you are embarking on a foolhardy enterprise. I believe that T Theory’s major contribution will be to show you why it will always be difficult to buy at major lows, but using its reasoning you may be able to overcome these obstacles. At each and every great buying point you must struggle at the “moment of truth” where you face seemingly overwhelming negative odds. In T Theory this moment of truth is called “The center post of the T”. It represents the point in time where all the bearish negatives of the past have been discounted by the market and is about to be transformed into an emerging, new bull market.”

In the present state of the world, most of us have more time to concern ourselves with our financial well being. Too much time, perhaps. If you are reading this, you probably visit financial sites that have a more professional bent. You may see posts about tremendous profits, or fantastic risk/reward scenarios.

We want to be those risk takers, or at least want to be those successful ones. And yet, I’m sure we all have friends who very happily follow their personal investment plan of adding funds to their 401K’s and other plans while taking no account of where we are, or where we are going in either a business cycle, a wave cycle, or an overbought or underbought market. They are willing to believe in the engine that could. And believe that this engine will continue through the future.

Some of us have friends who only invest at the wrong time, because they are creatures of sentiment. As a member of a few investment communities, I watch people fight the market, or want something emotional out of the market that it is not prepared to give them. They take revenge for making poor decisions by continuing to make poor decisions. They don’t want to give up. These people are not trading, they are insisting they’re right.

Perhaps we are those people, and we are trying to get it right…now. But as Bob Barker said many times–“Price is Right”. Learn who you are. Perhaps, if you are emotionally tied to the market you are missing something else in your life, and someone else should manage your money for you. That is how I met Mr. Laundry. That is how I later became able to manage my own money. Find your Mr. T.

Stay Safe.