Friday, January 29, 2016

The Obliteration Phase: "More Pain Please"

Despite massive accumulated technical damage to the average stock, there has been no panic, even when reaching and exceeding the August lows. For three reasons, one: because computers don't panic and most trading now is done by computers. Two, because unlike August, the recent sell-off was slow and controlled, not 1,000 Dow points at the open. Three, the most obvious reason - because of the perma-stoned zombies who are in denial of literally everything falling apart in broad daylight. Therefore, the pain threshold has been increased, meaning the level of damage incurred will be "significant and irreversible" by the time panic sets in...

In the meantime, having started my career as a programmer, I recognize recursion when I see it. This particular program is how Skynet ignites a short-covering rally - by moon launching the S&P futures at the open every day, to see who will shit their pants...

NYSE Intraday Advance-Decline line. If futures were not gap up open, breadth would not keep making a series of higher lows...and yes the downside gap from two weeks ago just got filled...

We've seen this movie before. We know how it ends:

Momentum is back to overbought:

Skynet working overtime
Momentum ignition visualized:
Predicted two massive sell-offs. I wonder what will happen next?
This is standard deviation of the NY Advance-Decline: