Volume Suggesting Crash Not Done Yet

The volumes Mid day on the QQQ and SPY are suggesting to me that we have not climaxed yet on the crash that is currently underway.  The candlestick we had last Friday was a doji candlestick.  It was failed to be confirmed today as a reversal signal and therefore I have to conclude that we are seeing continuation now and the volume is confirming this.  We may also get yet another Maribuzu candlestick today but of course will not know until end of day.  I am thinking maybe we need to see a 1 billion share volume day on the SPY for a clue that the decline is near complete.

I have come to the conclusion that RSI is on a destiny towards an extreme oversold crash level of 10 to 12 in the day or days ahead.  The problem is that the first time this level is reached does not necessarily mean we are at the bottom.  Plus I cannot say that 10 to 12 will be the target low range.. Maybe 15 is the low range this time around.

In 1987 it did mean we hit the final bottom.  But in May 1940 it meant that there was only a 2 day bounce and then another series of crashes that lead to the final RSI bottom.

It will be extremely difficult to try to nail the bottom.  But I intend to send out a signal when I think we have hit a momentum bottom.  I will try, but it will not be easy.

The signal will come some time after a huge upside reaction rally and then an attempt on a retest.   The tricky part will come in trying to figure out if after the reaction rally the market can hold the double bottom retest.  In 1940’s it went into another plunge, in 1987 it held ground…

Another update late tonight…

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5 comments on “Volume Suggesting Crash Not Done Yet
  1. Shrihas says:

    Tom,

    It will turn back from 1134. Month-end, it should close at 1284.

    Let me see whether I go right this time. I was right to predict major top some weeks before. Money spinner…

    Cheers

  2. Tom says:

    yes that was a great forecast Shrihas… excellent. I think 1050 is going to be the low, either as a closing or intra day low spike…

  3. Max says:

    1050? 8% downside doesn’t look like ‘crash’ too me. Too many bullish knife-catchers out there still… I think we won’t see major bottom until October maybe.

  4. ed says:

    Not sure that making comparisons to other times (1940,1987 etc.) is really that helpful. No reason why this time would necessarily mimic another.

    Anyway I am still waiting for the bounce that I thought would come today

    However, today we did hit the 38% retracement on the monthly SPY chart

  5. JR says:

    On a dime out and short ITMN.

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