Scandex Market Update – March 23

DOW FUTURES (YM) WEEKLY

From Wikipedia:

On October 28, “Black Monday,”[10] more investors facing margin calls decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 38.33 points, or 12.82%.[citation needed]

The next day, the panic selling reached its peak with some stocks having no buyers at any price.[11] The Dow lost an additional 30.57 points, or 11.73%, for a total drop of 23% in two days.[12][13][14][15]

On October 29, William C. Durant joined with members of the Rockefeller family and other financial giants to buy large quantities of stocks to demonstrate to the public their confidence in the market, but their efforts failed to stop the large decline in prices. The massive volume of stocks traded that day made the ticker continue to run until about 7:45 p.m.

After a one-day recovery on October 30, when the Dow regained 28.40 points, or 12.34%, to close at 258.47, the market continued to fall, arriving at an interim bottom on November 13, 1929, with the Dow closing at 198.60.

There was a Black Monday in 1987 of course. Is tomorrow another ‘Black Monday’ (already limit down on Sunday night)?  The Oct 29 low (a Tuesday) was 45% below the peak and on the median line (1929 chart is below).  A drop to the median line now would represent a drop of 41% at 17418.  This price is the exact low in futures from the day that Trump was elected (which was limit down at the time).  It’s the next level to pay attention to.  The 1929 analog is 2 charts down and suggests a low on Tuesday near 16300 and the 38.2% retrace of the rally from 2009 is 16548.

It’ll be interesting to see which “financial giants come out to buy large quantities of stocks to demonstrate to the public their confidence in the market” this time around.

DOW WEEKLY FROM 1929

CURRENT DOW WITH 1929 DOW

GOLD 4 HOUR

No change here.  I am still looking for a countertrend rally with resistance now in the 1580-1603 zone.

3/17 – I still like gold into 1600 or so (should have a better idea on resistance as this progresses).  Watch for 1510 support now.

USDOLLAR DAILY

USDOLLAR reversed sharply on Friday.  Near term (see below), a line off of highs since 3/10 runs through the high on Friday.  A short term head and shoulders top could be forming as well.  Let’s see what price action looks like when U.S. trading gets underway on Monday.  If price is rolling over, then I’ll be looking for USD shorts generally back towards 12640.

3/19 – This is truly a USD blowout.  USDOLLAR reached a level today that could inspire a reaction on the other side (lower) but we don’t have any reversal evidence yet.  The level is defined by the center line of the channel from the 2011 low.  This line served as support in 2014 for the launch higher.  It was also resistance in 2017.  All I’m pointing out here is that this is a level where the USD could pull back from.  Again, I need some reversal evidence first.

USDOLLAR HOURLY

BRITISH POUND FUTURES HOURLY

GBPUSD reached 1.1416 (low was 1.1414 on Friday…see below).  As the week opens, price is holding the high volume level from 3/18 at 1.1547.  As long as price is above that level, it’s ‘OK’ to be bullish.  Also, there is a short term fork (see 2 charts down) that suggests support near 1.1550.

3/18 – The top side of the line off of the 2014 and 2016 highs, which was support in 2018 and 2019, was reached today.  The 78.6% retrace of the 1985-2007 rally is 1.1416 (just below).  Watch this for support.  The 61.8% retrace was support for the 2009 low.  If I get a volume reversal on at least a 4 hour chart, I’ll let you know.

GBPUSD WEEKLY

GBPUSD HOURLY

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