SPY: Short term Evening Star
Updated
As we approach month end we see the short term bounce ending. The S&P became oversold (on the marker) and had to bounce to provide some reprieve (whether short covering or just by chance timing of month end). The month end rebalance feels like institutions are rotating rather than adding risk. This isn't a clear cut evening star pattern, I would like the top candle to be tighter for uncertainty but I think the general idea is there that supports the fundamentals. Earnings are coming up, inflation HAS been very high, inventory HAS been built up and the consumer is scared as ever - burned through their covid savings, bitcoin gains. Gasoline and food are as expensive as ever...
Short term (since we are looking a daily) we will probably see a new down trend, I expect for a couple of candles. If the trend lasts I think the next leg is going to be a capitulation - selling everything. I think we saw hedge funds go short, institutions have turned to bears the last leg down, and it is only the retail money left that remains to DCA. This next sell off could change all that. I think add (short) into the weakness especially over the earnings season.
NKE announced yesterday with beats, but worse guidance and we will probably see that as the optimistic case this quarter.
Short term (since we are looking a daily) we will probably see a new down trend, I expect for a couple of candles. If the trend lasts I think the next leg is going to be a capitulation - selling everything. I think we saw hedge funds go short, institutions have turned to bears the last leg down, and it is only the retail money left that remains to DCA. This next sell off could change all that. I think add (short) into the weakness especially over the earnings season.
NKE announced yesterday with beats, but worse guidance and we will probably see that as the optimistic case this quarter.
Note
Some other names joined in on commenting in the slow down, RH, BBBY, mostly retail exposed stocks.Note
S&P starting to inch its way back, day by day. I've been seeing a lot of posts that the 1h of July is the most "bullish" of the year. There is limited single stock events and more eco data coming out in the near term.Today's (positive) PMI figure told me, good data is bad for the market (fed starts dropping rates sooner). I think we will see somewhat positive economic data in the next two weeks (until earnings start coming out) and in this environment this may put pressure on the markets. CPI is expected to be a new high of 8.8%.
Note
Trade is moving aggressively against, cut 1/2 of the position and will add on the next red bar.Note
Bringing back the short here. The evening star signal completed probably the next 1/2 candles. Feels like we are in a consolidation channel here - part of a bigger scope. Will look for a bigger trading window to determine the new trading scheme.Order cancelled
Part of a bigger idea now - see Emini trade idea.
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