[Soultrader]

Originally Posted by bertg »

Hi, folks,

Market analysis seems to be the appropriate forum for this.

My question to all of you: what happened today at 1:45pm ET that caused the market to crash? At 1pm ET there were two reports on the calendar: 3- and 6-month bill reports, but the crash started around 1:40-1:45. I didn't see any volume spikes like I see sometimes before a big move.

How can all markets crash like that at the same time?

Thank you,
Bert

Imo charts tell it all. Please see below a composite profile of the ES starting from 2008 till present.





Yesterdays high at 1441 was pretty much the top of the distribution. It will fail on the first attempt majority of the time it reaches levels like that. Check the daily charts below also.



So I wouldnt call it a crash. More like a significant point of resistance.

[OAC]

Originally Posted by brownsfan019 »

With that being said trading is one of the most time consuming and labor intensive things you can possibly do in your spare time.

Spare time? How I envy you.

[OAC]

OK, here is some candlestick analysis. In the attached5-min chart, it shows that if you missed the first move down yesterday, there was a wide range red candle where the top of the candle created massive resistance as indicated by the yellow horizontal line. Subsequently the market had big trouble going above it, then you could have shorted into the bear flag that is being formed.

[DbPhoenix]

Originally Posted by brownsfan019 »

I apologize to the OP if my short but succinct previous answer did not provide an adequate reply that he was looking for.

Suffice to say this - as a candlestick trader, there were PLENTY of reversal signals staring you in the face (if you know what to look for). So while you are looking for waves and whatever else, a simple candlestick analysis that would take about 5 seconds accomplished the same thing for me.

Could you post a chart of some of these signals?

[gassah]

Originally Posted by Soultrader »

Imo charts tell it all. Please see below a composite profile of the ES starting from 2008 till present.
So I wouldnt call it a crash. More like a significant point of resistance.

It also hit the value area of the upper range.

[DbPhoenix]

Originally Posted by bertg »

Thank you to those with useful answers.

I don't trade much because I am in the learning stages. I am taking the advice of a member here and just spend time every night watching market replay data without any indicators but volume, trying to see what price does (and also looking for patterns like butterflies and wolfe waves, which is just plain fun for me). No sim trades, just watching.

I just happened to see the "crash" on my lunch break at work and thought I'd ask the experienced traders here what they think happened.

Regards,
Bert

Bert, your question appears to have been interpreted two different ways: (1) why did price fall and (2) why did price fall at that particular time. These charts are informative and useful and helpful, but in terms of trading the move, perhaps the best you could have hoped for was to find a profitable way of entering the move, if you happened to be there at the time.

The averages were all at resistance of one form or another, at different levels. They were all due to fall at some time or other for some distance or other. However, absent a catalyst of some sort (in this case, most likely the comments from Fed officials), any or all of them could have simply drifted all afternoon, then plunged on the PPI data this morning. When all the major averages fall at the same time and in more or less the same way, you can assume that there is something going on outside the usual support/resistance dynamic. Noting it is important if you're studying price movement. Trading it is something else.

[waveslider]

I just found the reason - full moon! The moonies did it!

[OAC]

As I have posted yesterday in the Live Trade section: http://www.traderslaboratory.com/for...s-3845-17.html

and brought attention to the fact we were very close to the 200-day moving average of the S&P 500, a yardstick widely watched by the institutions. As you can see from the attached chart, we have problem closing significantly above it. If you do your homework every night, you would expect a tug of war around the 200ma and not be surprise by the price action yesterday.