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T3’s Take 3: It Finally Happen!

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1) It Finally Happen!

As noted yesterday, the market has been scary lately.

With the FOMC announcement tomorrow and, more significantly, the U.S. Presidential election next week, the uncertainty in the stock market is high and traders are running for safety.

The S&P 500 finally broke key support at the October 13 pivot low and closed down, 0.72%. Helping to drive the move lower was the weakness in the Select Sector Financial ETF (XLF) which, until recently had been showing relative strength, lost 0.41%.

With some election polls now showing that Donald Trump has taken a small lead over Hillary Clinton, the Nasdaq Biotech. ETF (IBB) bounced, gaining 0.94%. This was no help to the Nasdaq though, which lost 0.69%

With all the uncertainty and concern in the market, Gold shined, surging 0.65%.

2) Facebook (FB) Pre Earnings

Tomorrow, after the close, Facebook (FB) will report earnings.

Analysts forecasted earnings per share are $0.76 which is the same as what was reported last quarter. Year to date, FB is up just over 25%.

The chart of FB is constructive. Usually it gaps up on earnings and sells off. Maybe this time will be different. It has key support at the 50 day which aligns with the $128.00 level.

If that support gets take out, a move back towards $122.00 followed by the June 27 pivot low at $108.23. That said, the weekly timeframe is uptrending and the $122.00 area will be a key level to hold.

The October 25 pivot high is at 133.50. It also happens to be the all-time high. FB shares closed down, 1.14%.

3) Significance of 2100

This afternoon, T3 Live’s Jeff Cooper provided the following thoughts into the SPX:

As a reminder, 2100 is a big cycle up from the bear low of 666 SPX.

Why?

It is 3600 degrees in price up from 666 so 10 360 degree cycles.

There have been two plunges below 2100 since it was first attained last year… one last August and one in January.

The January break clearly looked like the real deal following a bearish backtest in early November leading to an undercut of the August 2015 low.

But then came a new high after the Brexit squeeze.

That squeeze may have seen the vast majority of shorts capitulate on the new highs.

However, a 3rd break may be a charm for the bears indicating the breakout was a Bull Trap…equal and opposite to the SPX Bear Trap in 2009.

Interestingly the '09 Bear Trap saw the index dive 75 points below the November low.
Now we have a potential mirror image foldback with a roughly 75 point overthrow of the key 2120 level to 2194 in August.

August was cyclically pivotal as it was 1 year 360 degrees from the first break in 2015 and 6 months 180 from the low in Feb 2016 so we may have seen a high to low to high cycle of 180 degrees,

I would not be surprised to see 2000 quickly.

Click here to learn more about Jeff Cooper’s Daily Market Report.