One of the Most Pivotal Days in Market Memory June 23 2011

After further review I have come to the conclusion that today may have been one of the most pivotal days in my market memory for quite some time.  It was pivotal in the sense of the very high SPY volume and in terms of the end of day reversal.

The heavy volume during the middle of the day today was what tricked me into believing the market was ready to enter into real bearish tape action.  The next trick was the end of day reversal and strong finish.

This is known as a high volume shakeout and is usually quite effective for shaking out the final weak hands before a new trend can be established.  I have seen this happen many times in individual stocks.

I fell for the trap hook line and sinker… I gravitated toward the market candy like a kid in a candy store… I have to admit…  It completely confused me..

But now I think I have more clarity.

My mind has raced back and forth over the last several weeks trying to determine if we are just in a ‘mini bear’ or moving into a ‘macro bear’.  The jury is still out, but today’s action really does hint of a high volume capitulation shakeout that is typical of ending action (ending action of the previous trend).

But again, I have seen this type of action in individual stocks as well.. time and time again..

One usually sees it near a critical support range on an individual stock… then what typically happens is the market makers run the stock down to test to see if there is any valid support for the stock…

Stop levels are triggered and high volume comes into the market… then the weak hands are flushed out and the market reverses strongly into the close, setting the foundation for an eventual new trend up.

Today had that flavor… But it also had the flavor of blatant manipulation from the ‘powers that be’.  The news about tapping into strategic oil reserves really does come off as a political trick to throw another kitchen sink at the market to try to prop it up again.

So it seems today everything was at stake and all the kings men and all the kings horses were deployed to keep the market afloat.. and it seems to have worked.. for now…

CLOSING hard down today would have set the stage for a busting of 1250!!  and set the stage for even more market losses down the road.. This is what my eyes saw when I looked at the mid day SPY volume… the heavy volume was the clue to me that the bear was real and we were going to dive under 1250…

But it was not to be!  The market was saved in the end by ‘the powers that be’…and once again tells the tale how the market game is a good mix of political, technical and fundamental…   it was all in there today… Wow.

One day does not a trend make.  We really need to see a close above today’s high, preferably tomorrow for today’s action to have more validity.

Today was the ultimate battle for control! Now lets see who can put the proper finishing touches on it…

Posted in SP500
6 comments on “One of the Most Pivotal Days in Market Memory June 23 2011
  1. Danile says:

    Hi Tom

    I appreciate your update. One suggestion that I would like to give you is that you update your blog after the market is closed, as most of the trading bloggers do. That way, you will not have to switch back and forth your signals during the same day.

  2. geoff says:

    the commentary on this blog site is rubbish. it suggests that the blogger has incredible experience. if only, the recommendations and suggestions reflected that.

  3. Danile says:

    Long or short??

    Any clues?

  4. Danile says:

    Hi Tom,

    Is it time to switch back to BOT short?

  5. Tom says:

    I will do a post before the weekend summarizing the potential longer term bearish outlook..

  6. Tom says:

    Ooops I meant before the end of the weekend..

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