SPX Diamond Top
We've seen a tight range on SPX since about August 19th. Price is nearly at the same place it was then right now. That's a decent length of time and tells me there's a lot of compression and it'll make a big move once it picks a direction. There's plenty of bearish patterns, but you also can't deny that the market has been going straight up since early August and VX is still in decay mode.
I've been expecting the top to be put in fairly soon for a while now, I thought there was a chance we'd dump before September/October, which would be the safest time to bet on downside in my opinion. We had the one big red day and almost had a circuit breaker on the Nasdaq, but it's been nothing but up since. I don't really see this type of volatility as a good thing for bulls, but it's been an impressive rally. I think it's just exit liquidity, we'll see.
In addition to all of the major uptrend breaks and other bearish charts I've been posting on SPY/SPX, we also have a potential diamond top pattern here. It's not the cleanest, but looks pretty solid to me. Either way, the point of the diamond is that it shows a lot of volatility and indecision in the market. Broadening wedges and similar and suggest the same thing - indecision. That is usually not a good thing, especially near ATH. I'm still prepared for a big breakout though, we could see quite a melt up if we do shoot past ATH soon, but I just can't be on board with that until I see it.
I've been expecting the top to be put in fairly soon for a while now, I thought there was a chance we'd dump before September/October, which would be the safest time to bet on downside in my opinion. We had the one big red day and almost had a circuit breaker on the Nasdaq, but it's been nothing but up since. I don't really see this type of volatility as a good thing for bulls, but it's been an impressive rally. I think it's just exit liquidity, we'll see.
In addition to all of the major uptrend breaks and other bearish charts I've been posting on SPY/SPX, we also have a potential diamond top pattern here. It's not the cleanest, but looks pretty solid to me. Either way, the point of the diamond is that it shows a lot of volatility and indecision in the market. Broadening wedges and similar and suggest the same thing - indecision. That is usually not a good thing, especially near ATH. I'm still prepared for a big breakout though, we could see quite a melt up if we do shoot past ATH soon, but I just can't be on board with that until I see it.
Note
Big break right as the diamond came to connect all points. A lot of damage was done today and the double top scenario is looking more likely. Bulls have been resilient, however I think the writing is on the wall as I've been saying. Bulls need to do damage control and quick or we're going to end up breaking the April lows and heading towards the October 2023 lows.
AP Academy Beta Registration Open:
ko-fi.com/advancedplays/tiers
Short Thesis:
advancedplays.com/short-thesis.pdf
Disclaimer:
The ideas I post do not always represent my positions and they are intended for educational purposes.
ko-fi.com/advancedplays/tiers
Short Thesis:
advancedplays.com/short-thesis.pdf
Disclaimer:
The ideas I post do not always represent my positions and they are intended for educational purposes.
Related publications
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.