Hey Everybody, You Wanna See Some Magic?

A lingering debate after "Flash Crash II" on August 24th of this year mirrors what we saw in the wake of the first Flash Crash on May 6th, 2010. Back then, many people fancied the prices printed on that day to be irrelevant, almost akin to a crash that never was. Noted technicians appeared on financial news television and told viewers to simply to simply cover up those long "wicks" or shadows on the candlesticks of prices that day, and to ignore them in their analysis. 

Of course, in the coming weeks and months in 2010 we undercut those lows in many instances, by a good deal, and spent the entire summer feeling the aftershocks before eventually moving higher in the fall. 

When we look at a chart like the XLF, sector ETF for the financials, that same magical cover-up seems to be in vogue again. But banks are acting terribly today, with Goldman Sachs, Well Fargo, and Citi likely following one of our main financial sector tells inside Market Chess Subscription Services lower, Berkshire Hathaway, a large component in the XLF we have been tracking for months now. 

As tempting as it is to magically cross out the August 24th wick, the reality is that the more market players are in denial of it the more likely it is to be tested, or likely undercut, if nothing else than to test the validity if the print in the first place.

Opinions are bountiful in the marketplace and we can all have our own. 

But we cannot have our own facts. And the fact is that the XLF's $18.52 low from August 24th is in play to be tested again even more than usual precisely because of the magic act of crossing out prices that we are supposed to be believe.