Epilogue – 6/18/2021

Well, now you get to see the outlier. The market (S&P 500) broke to the upside of the falling wedge at about 11:00 am EST and staged a rally but only back to the 50-day EMA line on the daily chart. The market makers tried to push the market through the line unsuccessfully for the rest of the day to attempt to recapture the WEM low at 4188-89.

We came into the last hour around the 50-day line at 4175 and there was still hope to climb the 14 points back to the WEM low. Still, when it was clear about 10-minutes before the close that the market makers were not going to have their way, the S&P 500 dropped 25 points in 10-minutes. 

That was the waterfall I mentioned in my first writing today when market makers all run for the exits at the same time to neutralize their deltas. The only saving line was the half roundie at 4150 – a typical 50-point increment inflection point – at least good for a bounce.

There is no way to sugar coat this – the close was ugly. We closed well below every major intermediate support identified this morning. I find it difficult to argue that the intermediate trend is intact. It appears to have been obliterated in less than three sessions past the Fed announcement.

There will be many stocks to short from here, nearly as systematically as we bought them in the past year. That is my best guess anyway after spending the day in church without my phone or any other monitoring capabilities.

More on Sunday – perhaps even a video.

Stay tuned – glad we are in cash.

A.F. Thornton