S&P 500 Approaching Wave 3 and Ichimoku Leading Span A
The S&P 500 appears to be approaching wave 3 at multiple degrees of trend. Once it finishes completing minuette wave C of a zigzag, it should begin wave 3 at the minor, minute, and minuette degrees.
This is happening near the Ichimoku cloud's leading span A resistance.
If we look at the S&P 500's seasonal patterns over the past 72 years, we also find that buying the S&P 500 on June 26 and selling on July 17 has resulted in profitable trades 70.42% of the time. It seems as though the time around 4th of July is relatively bullish, historically speaking. However, buying the S&P 500 on July 17 and selling on July 24 has resulted in profitable trades only 47.22% of the time. As equity markets spend more of their time trending up rather than down, any historical equity pattern with a win rate below 50% is rather significant.
In equity markets, wave 3 is usually regarded as the most substantial wave. It is highly probable that the S&P 500 could begin a violent move down at some point during the next nine days.
This is happening near the Ichimoku cloud's leading span A resistance.
If we look at the S&P 500's seasonal patterns over the past 72 years, we also find that buying the S&P 500 on June 26 and selling on July 17 has resulted in profitable trades 70.42% of the time. It seems as though the time around 4th of July is relatively bullish, historically speaking. However, buying the S&P 500 on July 17 and selling on July 24 has resulted in profitable trades only 47.22% of the time. As equity markets spend more of their time trending up rather than down, any historical equity pattern with a win rate below 50% is rather significant.
In equity markets, wave 3 is usually regarded as the most substantial wave. It is highly probable that the S&P 500 could begin a violent move down at some point during the next nine days.
Note
Another critical observation I forgot to add to the main analysis is that a large falling wedge has developed on the chart. This is traditionally seen as a bullish pattern. Still, the upper trend line of the wedge is at the approximate target for wave C of the zigzag and the Ichimoku resistance. While it's too early to call the falling wedge a failed signal, I don't believe the odds favor a bullish end to the pattern.Jack D. Schwager famously said, "A failed signal is among the most reliable of all chart signals. When a market fails to follow through in the direction of a chart signal, it very strongly suggests the possibility of a significant move in the opposite direction... The fact that such a retracement occurs almost immediately following a breakout strongly suggests a bull trap. such price action is consistent with the market's rising just enough to activate stop orders lying beyond the boundary of the range, but uncovering no additional buying support after the breakout - an indication of a very weak underlying technical picture. In effect, the immediate failure of the apparent buy signal can be viewed as a strong indication that the market should be sold."
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.