Video summary
The video begins with an analysis of the significant volatility experienced by the Dow Jones Industrial Average over the last two days, highlighting a dramatic swing where the index moved up $500 and then down $300 in a single session. The speaker points out specific technical patterns on the chart, noting that after hitting new lows around 7:00 AM New York time, the market rallied to take out a previous high before targeting a level derived from a precise Fibonacci retracement of 38.2%. Despite this intense intraday activity, the broader trend on a four-hour timeframe remains extremely bearish, with today's rally appearing insignificant as it only reached half of the previous high and left the price well below key support targets.
Similar patterns of weakness were observed across other major indices, including the S&P 500 and the NASDAQ, although the Russell 2000 stood out for its exceptional performance. The Russell index delivered a massive rally of approximately $40, which was its largest gain in a very long time and also aligned with a 38.2% retracement level from the August 28th high. However, even this impressive surge in smaller-cap stocks is viewed as insufficient to reverse the overall bearish sentiment, leaving the market in a precarious position where it might be finding a bottom or simply continuing its downward trajectory.
The speaker emphasizes that while the current action could represent a market bottom with potential for an immediate upward move, such a scenario carries inherent risk because no one can predict the future with certainty. Consequently, the analysis suggests that investors must wait and see how the market evolves rather than assuming a reversal has occurred. The segment concludes by promising to return after a break to examine the behavior of notes and bonds during this period of volatility, as their performance will be crucial in determining whether the current technical setups are proving correct or if the bearish outlook remains valid.
Read the full video transcript
TFN [music]
Headline news update.
[music]
Okay, folks. Larry Pavveno for TFN. I'm
going to go over the last two days here
in the Dow Jones because we've had some
incredible volatility. You'll notice
last night um early in the morning, you
can see this was about midnight New
York, excuse me, about 3:00 in the
morning New York time. And you can see
it made a 382 retracement here. And then
it went down and made a new low. You can
see it made several new lows here right
around 7:00 in the morning, New York
time. And then it started to rally. And
soon as it took out this high right
here, you can see it was headed for that
level right there. Uh, and the reason
why you look at that is because if you
take the move from the 7:00 in New York
time and then you'll see the pullback
right there exactly 382 and it rallies
all the way up here. Folks, this,
believe it or not, folks, this was $500
up and $300 down so far today. Doesn't
change the picture of anything we're
looking at, but that's what's happening
with the Dow Jones. If we look at it on
just a little bit longer time frame,
like go to the 4 hour, you can see it
looks still extremely bearish. All we
were able to do today was make this
little rally right here, which is, you
know, basically insignificant. It's it's
just 50% of the high that we made right
back in this area, still leaving this
target down into this area right here.
So, that's what we're watching here in
the Dow Jones. We saw the same thing uh
in the S&P and also uh in the NASDAQ and
the Russell actually had a very big
rally. The Russell rallied about uh 40
bucks which was uh um more than it's
rallied in a very very long time. And as
you can see that it made a 382 off of
the high of the 28th of August. So and
you can see we had a pretty pretty nice
run up folks. That's about uh just about
40 handles and but you can see it's
still still quite weak. Now it this
might this might be the bottom and might
go straight up. But that's a you know
risk you have to take. You have to wait
and see what's going to be happen next.
No one knows what the future is. Now,
one of the things we need to cover when
we come back is to look where the notes
and bonds are during all of this because
everything was rallying around that
time. And we'll go through it and decide
whether we're right or wrong. So, we'll
be right back, folks. [music]
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