Twenty-two days ago I wrote that people kept catching the $NKE dip and the dip kept catching them. I said I'd do nothing: no buying, no averaging, no shorting the falling knife. I'd watch the level that proves me wrong and leave it alone until it reclaimed something real. Here's the grade. It was near 36.6 then. It closed today at 33.3, down 8.9% in 22 days and at its lowest since 2013. Thursday it beat on earnings, missed on revenue, guided the year down, and fell 5% on three times its volume. All three of its momentum clocks point down tonight. The daily one crossed today. The read was right. But the read isn't the lesson. The lesson is that nobody could have called the bottom on $NKE at 40, at 38, at 36, and nobody can call it at 33. Not because the company is bad. Because the structure is broken, and a broken structure has no floor until it builds one. Every "it can't go lower" was a guess dressed up as analysis. Same chart, different name: $APP Ten months ago it printed 745. It closed this week at 279, down 10.1% in five days, 62% off that high. It sits below its 20, 50 and 100-week averages. It bounced to nearly 600 in June and that bounce failed and made a lower high. The weekly RSI is at 34, which means it isn't even oversold yet. Every leg down since December has had someone calling it cheap. When the structure is intact, I can work with pullbacks. I know where the floor is because the market built it. When the structure is broken, there is no floor, only the last price, and the last price keeps moving. That's why I don't guess the bottom. I wait for the market to show me it held. What that looks like: a reclaim of a level that matters, on volume, that survives a weekly close. $NKE's first one is 36.0. $APP would need to take back the 300s and hold them for more than a week. Until then, both stay where they've been: on the list I don't touch. Predicting the dip is impossible when the structure is gone. Reading it isn't. The difference is the whole trade. Not investment advice. Find more of my deep dives on my newsletter 🐝
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6 Comments
Steve
@clueless_investor · 33m
Sarah Conor was right. They’re taking over.
Boris Bank
@bearonatrike · 47m
The AI sense is tingling 🫣 It hurts Maybe, just maybe... the thoughts/idea in part was yours - but the structure is so so very visible. The "if this, that" "Its not x, its y - and the lesson" The use of "something real" The "no x. no y. no z. I'd do q" Its everywhere. Please for the sake of your own self - at least upload some reference work into whatever model you like and pick a style for it to use 🙏 This isn't intended as a judgement, more of a hope for introspection
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