SPX Monthly Chart Analysis
Hi Guys,
We are at the very crucial months for the entire traditional market. I want to use S&P 500 as an indicator to give a high level understanding about the trend for the upcoming months. Let's directly dive into the chart analysis.
Look at the monthly chart, S&P 500 is almost forming a H&S pattern overall. I had two yellow horizontal lines to indicate the left hand shoulder and the head. We can easily see that the current price is breaking the resistance of the left hand shoulder, and pushing it to the previous high of $2943.
However, we are still in the mid of April, and we need to carefully watch the market and see how the monthly handle will close by the end of this month. If we can close at the higher price of the left hand shoulder, or nearly close to the preview high, there will be a higher chance that the price can still rise to a higher high in the following few months, as we are not seeing a lot of volatile price movement that indicates the start of the bear. However, if we close the handle nearly at the same price of the left hand shoulder, we could be seeing the right hand shoulder will be formed in the following months, and confirm a bear.
Let's look at the overall bull trend line since 2009. We are still in this long bull run. Nobody can predict when exactly the bull ends. However, we could always be cautious that there is not much fuel left for this bull run, and we could always set up stop losses if any bad news happened suddenly to crash the price.
In addition, Let's look at the monthly EMA Ribbon. Bulls pulled the price up whenever the price drops below the ribbon. The last two times this happened was on Jan 2016, and Dec 2018. Here is what we can say, the more times the price drops below the ribbon in the future, the more we know bears are taking some places of the bull. When this happens a few times in a short period time in the following year, please aware and prepare for the downtrend.
Fib level shows as a reference of overall support level, and Fib level 0.618 is the strongest support level obviously. MACD is forming a bearish divergence, however we can see that we still have a little bit room to reach the MACD trend line, which also indicate that we may still see the price goes up a little bit.
Overall, I am bullish in short term, but I am bearish at long term period. Let's hope the best, and have nice trades.
This is not a financial to buy or sell. This is only for educational purposes.
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Additional thoughts
Due to federal decided to continue raising the interest rate, we could see more bearish signal. A great example was back to 2009, when there was 0 interest rate. Then the economy slowly recovered. So when federal and banks decide to raise the interest rate times by times, it is the time for us to carefully review the current market.
In addition, banks and the 'central' people totally control the market. They need more money entering into the market, to dump their huge holdings. We may see a sharp price rally and then go straight back down 10 times faster in the near future, as they start selling their holdings by taking over the buyers orders.
Then the question becomes how and when they will decide the pull big money out? Is Gold again the safest place to secure money? Here is what I think. They will pull out the money when more bear pressure comes (news, job report etc.), or they found a better place else to put the money into, like, cryptocurrency. As soon as they see Bitcoin is about to recovery and back to the bull run, they may pull out the money and push Bitcoin bull run starts.
Gold will not be the best place to put assets in anymore at that time, but Gold may still be a place to secure assets other than traditional market.
Please share your thoughts.
We are at the very crucial months for the entire traditional market. I want to use S&P 500 as an indicator to give a high level understanding about the trend for the upcoming months. Let's directly dive into the chart analysis.
Look at the monthly chart, S&P 500 is almost forming a H&S pattern overall. I had two yellow horizontal lines to indicate the left hand shoulder and the head. We can easily see that the current price is breaking the resistance of the left hand shoulder, and pushing it to the previous high of $2943.
However, we are still in the mid of April, and we need to carefully watch the market and see how the monthly handle will close by the end of this month. If we can close at the higher price of the left hand shoulder, or nearly close to the preview high, there will be a higher chance that the price can still rise to a higher high in the following few months, as we are not seeing a lot of volatile price movement that indicates the start of the bear. However, if we close the handle nearly at the same price of the left hand shoulder, we could be seeing the right hand shoulder will be formed in the following months, and confirm a bear.
Let's look at the overall bull trend line since 2009. We are still in this long bull run. Nobody can predict when exactly the bull ends. However, we could always be cautious that there is not much fuel left for this bull run, and we could always set up stop losses if any bad news happened suddenly to crash the price.
In addition, Let's look at the monthly EMA Ribbon. Bulls pulled the price up whenever the price drops below the ribbon. The last two times this happened was on Jan 2016, and Dec 2018. Here is what we can say, the more times the price drops below the ribbon in the future, the more we know bears are taking some places of the bull. When this happens a few times in a short period time in the following year, please aware and prepare for the downtrend.
Fib level shows as a reference of overall support level, and Fib level 0.618 is the strongest support level obviously. MACD is forming a bearish divergence, however we can see that we still have a little bit room to reach the MACD trend line, which also indicate that we may still see the price goes up a little bit.
Overall, I am bullish in short term, but I am bearish at long term period. Let's hope the best, and have nice trades.
This is not a financial to buy or sell. This is only for educational purposes.
---------------
Additional thoughts
Due to federal decided to continue raising the interest rate, we could see more bearish signal. A great example was back to 2009, when there was 0 interest rate. Then the economy slowly recovered. So when federal and banks decide to raise the interest rate times by times, it is the time for us to carefully review the current market.
In addition, banks and the 'central' people totally control the market. They need more money entering into the market, to dump their huge holdings. We may see a sharp price rally and then go straight back down 10 times faster in the near future, as they start selling their holdings by taking over the buyers orders.
Then the question becomes how and when they will decide the pull big money out? Is Gold again the safest place to secure money? Here is what I think. They will pull out the money when more bear pressure comes (news, job report etc.), or they found a better place else to put the money into, like, cryptocurrency. As soon as they see Bitcoin is about to recovery and back to the bull run, they may pull out the money and push Bitcoin bull run starts.
Gold will not be the best place to put assets in anymore at that time, but Gold may still be a place to secure assets other than traditional market.
Please share your thoughts.
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