Market Milestones: Up, Down, Up Down

[Image] Good morning , Days of tumultuous and tumbling price action left the market resembling something like the running with the bulls but with a trip wire every 10 feet and bull traps around every corner. Finally, some relief for the bulls was felt starting Wednesday afternoon and culminating with an actual bullish candle on Thursday. If you have been following the Market Milestone, you know that we have been bearish on the market since August 31st and were expecting lower lows which have now delivered on every index that we track. Seasonality played a part in our analysis and September has not disappointed. Targets have been hit, gaps have been filled and we are left asking ourselves if that was it or if the markets are teetering on the brink of another tumble. What camp are you in? Send us an [email](mailto:support@thetradersplan.com) and let us know. [Image](mailto:support@thetradersplan.com) Outside of the Magnificent Seven, aka the Skynet Seven, the market looks bleak. Realistically, the Skynet Seven doesn’t look too hot either, flashing some of the most ominous topping patterns seen since the fall of the Roman Empire. There I go, thinking of them again. I have been on record saying that the NVDA earnings gap on May 25th, 2023 is one of the main reasons the QQQ and the SPY had the blowout bullish summer that they had. Both were at critical inflection points prior to the NVDA gap and those earnings combined with the AI mania gave the QQQ and SPY the energy needed to push another 16% and 8% respectively. The [QQQ count]( that we have been tracking since August 31st had price pulling into the $340.00 level before putting in a significant bottom and heading higher. That level still looks great, sets up a possible bear trap instilling fear into the hearts of the market participants and dips into a great pocket of liquidity for the bulls. However, it would also make a lot of sense if QQQ gives back all of the NVDA gains and fills the May 25th gap before finding support. NVDA will certainly fill its earnings gap as well, it may just take a little longer than it takes the QQQ. QQQ [Image]( If QQQ pulls back to $330.00, the rest of the market will likely be getting wrecked at the same time and the probability of a higher high this year will diminish. It is very likely already off the table for RSP and IWM, but the deeper we go and the steeper we fall, the more likely it is that the July top was the major top in the market. Honestly, it has all of the signs and is pretty much a picture-perfect topping pattern. This is part of the reason I think we may have one higher high to go, trapping the overzealous bears yet again. Too perfect is often a trap, unless it isn’t, in which case it’s just perfect, or the perfect trap. Banks, Transportation, Utilities, Consumer Staples and REITs are all getting absolutely demolished right now. If you look at RSP, this entire year looks more like a corrective wave in a downward trend than the start of a new bull run to all-time highs. If this is the case the QQQ and some of the strongest stocks in the market could make another high, but that will likely coincide with a lot of lower highs and the last hurrah before a bigger downward move. RSP [Image]( To more precisely answer the question presented above I will refer to the SPY and QQQ charts. The QQQ chart has been exactly right for an entire month and called the exact top of the market, so the odds of it nailing this next move and calling the bottom are basically zero. Now that we know it is wrong, we can proceed with the wrongness. SPY hit 30 on its daily RSI for the first time since the bottom in September and October of 2022. If we assume we are in a C wave, we should retest slightly and put in one more low to complete the 5 waves lower. In September we saw a 3-day bounce before heading lower for the final low, which would be about right this time around. Obviously, the situations are very different in many ways, but there are many similarities showing up in the charts. This SPY chart lines up well with the QQQ count that brings our price into $340.00. To sum up: first a little up, then a little more down, then a moderate more up, then a lot more down. SPY [Image]( ETF of the Week Today’s ETF of the week is iShares 20+ Year Treasury Bond ETF (TLT). The last time this was our ETF of the week was on [August 4th]( and that worked out quite well. That time we were looking short on this straight down, knife drop of a trend, because why wouldn’t you? This time we are looking to grab that knife right out of the air. As the bond yields continue higher, TLT can’t seem to find a bottom. However, if yields find a top, whether that be short term or long term, TLT could make for some interesting long opportunities. If TLT can pull down into mid to low $80.00 range that could give great longer term upside on TLT. For quick swing trades, the current level looks very interesting. TLT [Image]( Strive On, Yates Craig, RLT & TPN Market Analyst Disclosure: You are responsible for your own trading decisions. ALWAYS, do your own research before investing in any of the above securities. This is not a solicitation to buy/sell ETFs or securities. NEVER invest money in ETFs or stocks that you can't afford to lose. You can lose all of your capital by trading any securities mentioned. These ETFs/securities are very volatile and gain and lose value quickly. We reserve the right to freely trade in any mentioned ETFs or securities. We are not compensated by any mentioned companies. We trade ETFs and securities based on our opinion of intrinsic/possible future value only. We are not registered investment advisors, so always do your own research before buying any securities. Unable to view? Read it [online]( If you no longer wish to receive mail from us, you can [unsubscribe]( Sent from: Real Life Trading in Nashville TN 37221