{"id":16404,"date":"2020-08-10T07:30:34","date_gmt":"2020-08-10T11:30:34","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=16404"},"modified":"2020-08-10T07:30:34","modified_gmt":"2020-08-10T11:30:34","slug":"weve-only-seen-this-pattern-twice","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/weve-only-seen-this-pattern-twice\/","title":{"rendered":"We\u2019ve Only Seen This Pattern Twice"},"content":{"rendered":"

You don’t have to remember 2000. But, you should remember three weeks ago<\/a>. That’s when we pointed out a rare event that could possibly signal the END of this remarkable, stock market rally.<\/p>\n

Actually, it was the folks over at Sentimenttrader.com that pointed out the event. We merely speculated on what might happen next based on what happened in 2000.<\/p>\n

On March 7, 2000, the NASDAQ 100 (NDX) rallied more than 2% intraday<\/a>, then reversed to close down more than 1%. That was the only time – ever – that had happened. Three weeks later, the bubble burst and stocks started to cascade lower.<\/p>\n

Here’s the chart of the NDX from back in 2000 that I showed you three weeks ago…<\/p>\n

\"\"<\/p>\n

The blue circle shows the day of the rare event. Take note of the action following that day. The NDX moved slightly higher right away. Then it suffered a pullback before rallying again to another all-time high. But, that rally occurred with negative divergence on the MACD<\/a> indicator. In other words, as the NDX moved higher, the MACD moved lower.<\/p>\n

Negative divergence is often an early warning sign of a potential change in trend. And, in this case, the divergence – three weeks following such a rare intraday reversal – marked the top of the NDX bull<\/a> market in 2000.<\/p>\n

Let’s fast forward to today – three weeks following only the second time ever, the NDX suffered such a rare, intraday reversal. Here’s the current chart…<\/p>\n

\"\"<\/p>\n

The action is so similar it’s almost spooky. <\/p>\n

Granted… we don’t want to draw too big a conclusion based on something that has only happened two times in history. <\/p>\n

But, given all of the other giant, caution signs<\/a> in the market – like the rampant speculative activity in the penny stocks, the extremely low CBOE put\/call ratio<\/a>, and the numerous technical divergences – traders should probably pay close attention to the similarities in this current chart of NDX and the chart from
\n2000.<\/p>\n

There’s no question the index is overdue for at least a mild decline after such an amazing rally. And, if the similarities to 2000 continue, then there could be a much more significant decline headed our way.<\/p>\n

Best regards and good trading,<\/p>\n

<\/p>\n

Jeff Clark<\/p>\n

Reader Mailbag<\/strong><\/h2>\n

Today we share a note of thanks from Jeff Clark Trader <\/em>member Joe…<\/p>\n

\n

Jeff, I am reminded of that story in the Bible where ten lepers are healed of the dreaded disease, but only one went back to say thank you. I am, in a sense, not only a “digital immigrant,” but I’m an options “leper” as well. I have read and tried to make the options definitions stick. I often describe the idea of puts akin to driving on the other side of the road in New Zealand where my wife is from. It can be done only with a lot of focused, intentional
\nthinking, and concentration.<\/p>\n

That is to say that I am so grateful to you for putting together your printed materials on your Guide to Options Trading (Jeff Clark Trader <\/em>members can access here<\/a>). It’s without a doubt the most concise and clear presentation I have read to date, and I have read literally dozens.<\/p>\n

They all had a part in helping me understand the basic concepts, but your wonderful presentation allowed all that studying to finally gel in a way that is actually now retrievable. I can’t recall a single illustration from before that could rest on its own merit. But yours actually found its way to my frontal lobe where it resides, so that it’s easily retrievable.<\/p>\n

Thank you. And Thank you again.<\/p>\n

– Joe<\/strong><\/p>\n<\/blockquote>\n

Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming \u2013 and send us any questions \u2013 at feedback@jeffclarktrader.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

You don\u2019t have to remember 2000…<\/p>\n","protected":false},"author":43,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-16404","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/16404","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/43"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=16404"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/16404\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=16404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=16404"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=16404"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=16404"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=16404"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=16404"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=16404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}