It's really surprising to see SPX rallying again today after the 86 fib hit - with the drop off it holding basic trending conditions.
This doesn't happen very often. When you look at all instances of this in SPX history you'll find about 80% of the time it drops much more from here. Whether it's a bull or bear move overall.
In this area there's a lot of risk of being rugged on the long side because the move is hyper extended / high ATR and even a moderate correction can be 10% - however, if we continue to consistently uptrend above the 86, then it's buy all dips.
When an 86 breaks without any notable pullbacks, it tends to trend on small timeframes. Bluffs bear moves a lot - but keeps holding inside the last low and makes new highs.
This is something that can happen inside of both tops and breakouts. Topping moves can spike out the high by a nominal amount and then drop - like the2007 high did.
Trending moves can break the high, hold retests and continue to grind up, like the 2021 rally did.
In either event - the smart bet is to buy all the dips because they offer 1:3 RR, you'll usually only have to lose 3 of them to work out that's a bad idea and that means it's quite unlikely youll lose money - conversely, if it continues to uptrend, you'll make bank!
If the 86 is not a resistance level, then next upside level is 6130. This would seem best case scenario for bears.
In the bigger picture, SPX has come down off extremely important long term resistance levels. These could be a major top. It's a considerable risk ... but if those levels are going to break, then we are probably going to head into exceptional uptrends.
If we do not top out at the macro resistance levels, then it's probably going to become close to impossible to make money as a bear. And I mean that in terms of over the next couple years. Not just for a little while.
The last 5 yrs have been optimal yrs to be willing to trade both sides of risk assets. There have been a lot of ups and down. I think if we have a failure of the bear attempt here that will turn into a market that's very unfriendly to bears. Even if you only trade good levels you'll lose money.
If you used good entry and stop trailing rules, there've been fortunes to be made on the bear side of the last years.
But if we break this time, I find it very unlikely you'll see me being bearish for the foreseeable future.
The upside potential on a monthly resistance break here would be staggering.
While we were at the low I made a detailed explanation of how my bias over the coming years would be informed by the outcome of the rally. We're into the action end of that now.
If we uptrend above resis, it's buy all dips. There could be a tricky spike out bull trap and there could be an exceptional rally.
In the rally scenario, we'd soon enter into conditions where massive profits could be made over the next 2 year.
This doesn't happen very often. When you look at all instances of this in SPX history you'll find about 80% of the time it drops much more from here. Whether it's a bull or bear move overall.
In this area there's a lot of risk of being rugged on the long side because the move is hyper extended / high ATR and even a moderate correction can be 10% - however, if we continue to consistently uptrend above the 86, then it's buy all dips.
When an 86 breaks without any notable pullbacks, it tends to trend on small timeframes. Bluffs bear moves a lot - but keeps holding inside the last low and makes new highs.
This is something that can happen inside of both tops and breakouts. Topping moves can spike out the high by a nominal amount and then drop - like the2007 high did.
Trending moves can break the high, hold retests and continue to grind up, like the 2021 rally did.
In either event - the smart bet is to buy all the dips because they offer 1:3 RR, you'll usually only have to lose 3 of them to work out that's a bad idea and that means it's quite unlikely youll lose money - conversely, if it continues to uptrend, you'll make bank!
If the 86 is not a resistance level, then next upside level is 6130. This would seem best case scenario for bears.
In the bigger picture, SPX has come down off extremely important long term resistance levels. These could be a major top. It's a considerable risk ... but if those levels are going to break, then we are probably going to head into exceptional uptrends.
If we do not top out at the macro resistance levels, then it's probably going to become close to impossible to make money as a bear. And I mean that in terms of over the next couple years. Not just for a little while.
The last 5 yrs have been optimal yrs to be willing to trade both sides of risk assets. There have been a lot of ups and down. I think if we have a failure of the bear attempt here that will turn into a market that's very unfriendly to bears. Even if you only trade good levels you'll lose money.
If you used good entry and stop trailing rules, there've been fortunes to be made on the bear side of the last years.
But if we break this time, I find it very unlikely you'll see me being bearish for the foreseeable future.
The upside potential on a monthly resistance break here would be staggering.
While we were at the low I made a detailed explanation of how my bias over the coming years would be informed by the outcome of the rally. We're into the action end of that now.
If we uptrend above resis, it's buy all dips. There could be a tricky spike out bull trap and there could be an exceptional rally.
In the rally scenario, we'd soon enter into conditions where massive profits could be made over the next 2 year.
We may be inside of a crash event to 3000 in SPX.
Read the full case with backlog of historic analysis/forecasts here: holeyprofitnewsletter.substack.com/p/the-case-for-3000-in-spx
Read the full case with backlog of historic analysis/forecasts here: holeyprofitnewsletter.substack.com/p/the-case-for-3000-in-spx
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.
We may be inside of a crash event to 3000 in SPX.
Read the full case with backlog of historic analysis/forecasts here: holeyprofitnewsletter.substack.com/p/the-case-for-3000-in-spx
Read the full case with backlog of historic analysis/forecasts here: holeyprofitnewsletter.substack.com/p/the-case-for-3000-in-spx
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.