Epilogue – 8/16/2021

While the day is certainly a head scratcher, here are my notes. I will try to clean them up later so check back. I did not include notes on the Algo Trigger or Moving Average buy and sell signals as the Bull Microchannel was the dominant trading theme after the morning low. We don’t see reversals like this often, but they are awesome when the occur.

Note that I show you how I moved my stop up on each barely discernable dip in the channel. Not once did the price come close to a stop, a sign of strength. I only sold because I don’t like to be trading in the last hour and I did not want to be too greedy. We hit my 100% target of the first leg up (shaded area) so I exited.

Buyers remain in control. I am not entirely certain if the dip was simply news related from the weekend, or if it was a nanosecond of the 40-day cycle dip. I tend to favor the former over the latter explanation, which means the 40-day cycle may still present itself for a few days later this week.

Breadth continues to diverge from price, a negative sign. Also, defense led offensive today, also not ideal. Growth stocks got clobbered and the Dow led, just as I had expected (rotation). But energy disappointed, so I will give it one more day at most.

A.F. Thornton