S&P Hurricane

Chaos Clinic for 8/6/2021


These two charts show the S&P eMini futures over the past month. These charts are chart 6 on the SPKISS page at http://daytradingforecasts.com...

After the sharp dip into 7/16/2021, prices rallied for a week, then stalled.It looked like it was topping one day, then rallying the next. This was frustrating to both the bulls and the bears. It was not clear to me until 8/4, when I realized that this was a CONGESTION ELLIPSE, something I have found in my research.

Congestion ellipses form when energy fields form an "eddy vortex." If you've ever trout fished in a stream, you've seen these near the base of small falls. They are a form of George Bayer's ellipses. One characteristic of them is that they have a near vertical move in the middle. That helps find the end of the pattern. The other thing that helps is that at the end, a "half width" move forms.

When I saw this forming I posted the top chart on the AUX page, and made the comment shown on the chart. Subscribers who where logged into the site and monitoring the chat room were alerted to the possibility of a rally ahead. My reasoning was simple: A "rally of hope" was likely going into the Friday employment report.

A rally of significant size is possible if the move after the congestion equals the move going into the congestion. This is a pattern I call the "Hannula Hurricane." It is the symbol used by weathermen for hurricanes.

Like any pattern, this one can fail, but if one looks at the rainbow of EXMAs on the charts, the sharp low on 8/3 bounced up from the gold 12 day, and the lows on 8/4 based on the 6 day EXMA. These show the S&P is gaining strength.

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This content was published on Dr. Al Larson's Chaos Clinic which you can attend each Friday for free.

Dr. Al Larson has developed a complete Chaos Model of Markets, four unique courses that let you become a Certified Chaos Trader, some very unique eMylar fractal pattern overlays, and tools that permit forecasting individual stocks and markets years in advance. You can also sign up for a free weekly email, and attend a free Chaos Clinic on Fridays. To learn more, click on the author's profile.

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