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SPX | Spaaace!!!Spaaaaaaaaaaace! Let's make a quick party, also bring a cake to celebrate! Make it quick, because it's late and I am tired and I should be sleeping by now. We have reached the top of the world. Well, equities have. It is time for them to lose value big time. Their successor is here, bonds. I have talked about it extensively in my last idea. This is an urgent idea I wanted to post. It seems that day-by-day we might be witnessing the peak in equity price. And this idea is dedicated to the person who gave me the crazy idea to analyze something like that. The idea is simple. We all know the immense yield inversion, it is definitely ugly... What if we found a way to analyze SPX based on the yield inversion itself? That is the idea of @CryptoTaoist and I am very thankful for it. All credit and all the likes this idea gets, are dedicated to this person! Yield curve is a way to calculate money creation (normal times) and money destruction (inverted times). Green is good for money, red is bad. No wonder dollars are green but flammable! We also know that yield inversion is strictly bound to recessions. I will naively try to add these two together, equities and inversions to get an idea of when the recession is actually beginning. Me and others have posted about how the US isn't in a recession yet. This can be seen if we multiply SPX by yields. In a sense, this year we had no recession for the US economy. Please bring a real cake, not this lie... The next part is analyzing whether SPX is performing good or bad considering the current rate of money creation / destruction. In a sense, dividing SPX by the yield curve. If you calculate the yield curve as US10Y-US02Y you will have trouble analyzing it compared with SPX. Captivity of Negativity. Zero values for the denominator make a mess of the chart. You could instead opt for a bodge, to fix the denominator by adding 1. While this works, it is not harmonic enough for my liking. I will create a new yield curve, but instead of standard yields I will calculate it using modified-yields. More about the modified-yields in this idea below. The new yield curve (in blue) is following the standard yield curve (in orange). So it can be considered a satisfactory replacement. Do note that on the numerator we have modified(US10Y). On the denominator we have modified(US02Y+1). I add this +1 so as to further normalize the chart. In normal times US10Y and US02Y have a difference of ~1%. To conclude, we divide SPX with the modified yield curve and we see the following: A surprisingly smooth chart shows us what we expected, that the US isn't in a recession yet. It is also incredibly straight, from 2010-2022 and today. This means that yield curve and SPX correlate very well, if we modify them appropriately. In a sense, dividing SPX by the yield curve calculates the following: How much SPX increases as money gets destroyed? If SPX can swim against the tide (money destruction) this means that it is very strong. A strong economy can hang on even when money is destroyed. US hanging on even with that immense of money destruction, means that it was (and perhaps still is) a very strong economy, which can withstand a heavy beating. Note: DGS2 is a good replacement for US02Y if you want to analyze old historical data. Feel free to notify me of indicators that calculate even older yields of the 2 year bond. But where is the ceiling in this chart? While the 2.0 Retracement proves a significant resistance point, it is inconclusive of whether it is the terminal ceiling. One answer may lie in the following chart: (I knew the cake is a lie!!!) We have divided by M2SL and multiplied by 10^12 to bring numbers to measurable scale. A normalized chart appears, and we also observe a curious ceiling appearing. Price obsessively tries to penetrate this ceiling, just like DJI/M2SL did in 2018-2020 Are we witnessing the very last weeks of the equity bubble? Tread lightly, for this is hallowed ground. -Father Grigori Captivity of Negativity is a reference to Bagwell of the Prison Break TV Series.
SP:SPX
by akikostas
11
DOW JONES Potential Head & Shoulders and invalidation level.Almost a month ago we gave the most optimal buy entry for Dow Jones (DJI) exactly at the bottom of its 4-month Channel Down: Right now, we see an emerging Head and Shoulders (H&S) pattern, which is a technical pattern typically formed on market tops. The key now is the 4H MA100 (green trend-line). A closing below it, will most likely accelerate the pull-back towards Support 1, in which case we will target 33330. A 4H candle close above 4H MA50 (blue trend-line) will be a bullish break-out signal and should invalidate the H&S pattern, targeting first Resistance 1 and Resistance 2 in extension, in which case our Target will be 34500. Note the the 4H RSI has been inside a Channel Down since April 04, thus a big Bearish Divergence when compared to the price's Channel Up. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
U
by TradingShot
1
DJI Is Bearish! Sell! Please, check our technical outlook for DJI. Time Frame: 1D Current Trend: Bearish Sentiment: Overbought (based on 7-period RSI) Forecast: Bearish The market is on a crucial zone of supply 33780.1. The above-mentioned technicals clearly indicate the dominance of sellers on the market. I recommend shorting the instrument, aiming at 33152.6 level. P.S Oversold describes a period of time where there has been a significant and consistent upward move in price over a period of time without much pullback. Like and subscribe and comment my ideas if you enjoy them!
FOREXCOM:US30Short
by SignalProvider
7
DOW JONES Still bullish, one last pullback possibleDow Jones is under the 4hour MA50 for a whole day but still inside both the short and medium term Channel Up patterns. As long as they hold, the trend remains bullish and we are targeting 34375. If the price crosses above Resistance A, extend buying to Resistance B (34900). There is a probabilitiy for one last pull-back to the Rising Support around 33300 if the Channels break. That will still be a buy opportunity. Previous chart: Follow us, like the idea and leave a comment below!!
ULong
by TheCryptagon
2
DJI Is Going Down! Sell! Please, check our technical outlook for DJI. Time Frame: 10h Current Trend: Bearish Sentiment: Overbought (based on 7-period RSI) Forecast: Bearish The market is on a crucial zone of supply 33774.6. The above-mentioned technicals clearly indicate the dominance of sellers on the market. I recommend shorting the instrument, aiming at 33259.0 level. P.S Please, note that an oversold condition can last for a long time, and therefore being oversold doesn't mean a price rally will come soon, or at all. Like and subscribe and comment my ideas if you enjoy them!
FOREXCOM:US30Short
by SignalProvider
8
DOW JONES Crossed under the MA50 (4h), first time in a monthDow Jones crossed under the MA50 (4h) today for the first time since March 24th. Even though that's a bearish bell, the 1 month Channel Up is intact, thus the trend remains bullish. Trading Plan: 1. Buy as long as the price stays inside the Channel Up. 2. Sell if it crosses under the MA100 (4h). Targets: 1. 34950 (Rising Resistance 2). 2. 33000 (MA100 1d). Tips: 1. The RSI (4h) is inside a Channel Down ever since Dow started to diverge inside a Bullish Megaphone. This is an indication of a potantial pattern chance from more aggressive bullish to less aggressive bullish/ neutral. Please like, follow and comment!! Notes: This is a continuation of this trading plan:
CAPITALCOM:US30Long
by TradingBrokersView
3
4-19-23 [dji]good afternoon, there's a very wise man in this market named C who once asked me a question, C asked: "you know who loses the most amount of money in a bear market?" i was like nah who, C said: "bears". --- the dow bones came down from ath in a simple zig-zag (3 wave move) i am theorizing that it's creating an equal sized move to the upside, but in 3 waves. 3-3-5 is all i'm going to say for now - this will either make sense to you, or it won't - though, i promise not to leave you hanging when the time comes anon. --- when the dow bones take out ath, euphoria will peak out in the entire world - it won't make sense to 90% of the market, as they'll spend most of their time adding to their shorts, wondering "how can this possibly be?". --- here's how, bears keep shorting, market maker keeps squeezing, and they keep squeezing until every last bear goes poof. ✌
TVC:DJI
by notoriousbids
DOW(N)? | A Dollar Milkshake ScenarioI feel bad when I am filling up your feed with my non-stop posting. There are too many charts that I want to talk about. I could post them as "updates" to my earlier ideas. But this would be confusing for me and for the reader. Therefore, here is another short chart analysis. The last few months were peculiar. DJI began diverging away from the other main indices, SPX, NDQ. A significantly strong movement of DJI the last few months brings hope to the Equity Bulls. A fast and high-reaching Bull Run. A discrepancy between indices is not necessarily hopeful. In classic Dow Theory, when different parts of the market moved differently from others, it signaled an alert that deserved attention. As a classic example, when the railroad index didn't confirm the general index growth, this could have been bad news. While the Dow Theory is replaced from more modern methods, it is fun looking back and analyzing using the most classical of methods. It certainly gives a new perspective into what we analyze today. While price discounts all, relationships matter. SPX, DJI etc don't live on their own. Their price is highly subject to the fundamentals of the economy, which are hard to calculate. The only thing we can do is take the fundamentals into equation, and make a retrospect analysis into some charts, just to get some perspective. I will now explain why I believe such a discrepancy occurred. An exotic chart follows, making some calculations on DJI. Later on you will understand what this chart means. Similarly for SPX: It appears that there is a fundamental ceiling above. And DJI just upthrusted to reach it. Fundamental ceilings like these cannot be predicted. We can see them from their effect in long-term charts. In 2022, what we lost in Equity value, we gained in Dollar strength. Therefore we calculate DXY*DJI to get some perspective of the absolute DJI price. It is sort-of the price of DJI relative to the world economy. While there are similarities to 1995 - and while anything could happen - I believe that this is a fake-out. But the future of Equities might not be like we expect them to be. The post-2020 period is a period that resembles a blow-off top. In my 1-year experience, DXY and Equities depend on the Yield Curve. We all know that, the Yield Curve has significant importance in calculating Equity performance. While short-term movement depends on the yield curve, the long-term movement depends on long-term yield rates. And this correlation between the Yield Curve and DXY makes sense. The yield curve represents the "rate money is created out of thin air". It's inverse represents the "rate money is destroyed". DXY is a measure of dollar strength. Strength of currencies depend on many factors (most of which I don't have the knowledge to analyze). One of these factors is currency scarcity coupled with interest rates. With all of that we can conclude to the following consequences of a possible dominance of the dollar. -- It is obvious that dollar dominance will lead DXY much higher. -- Money Supply is rapidly decreasing. The FED is dedicated into killing inflation. -- A correlation between DXY and the inverse of yield curve might lead to the following conclusion: A decisively high DXY needs a deep yield inversion. And perhaps we are stuck with a multi-year yield inversion. Price might get rejected upon attempting to enter the long-term formation. It will have significant trouble re-entering the money-creation-area (positive yield inversion) As for the effect in equities, things are quite complex... For the following charts, I will be replacing DXY with the yield-curve, which is the fundamental movement that affects dollar strength. Until now, Equities haven't felt the effect of the Yield Inversion. This may soon change. Price reached a significant retracement and with a sloped ceiling, bearishness is apparent. This chart is concerning for equities. It describes the absolute strength of the Equity Market. And with so significant divergences in such a big scale, it comes to show the sheer scale of the damage that might be coming in equities. And it will be real damage, damage that we haven't already felt. All of these are calculations are in relative performance. It is hard to calculate the effect in equities in absolute terms. One thing is for sure: A deepening yield inversion will keep the real equity prices higher for longer. Therefore we cannot calculate anything while we are in this upside down period. And who knows... The recession everybody expects may never come. If the yield curve is negative for years, the dollar will be making higher highs in strength. And a strong dollar isn't necessarily bad for equities. It is in the hands of corporations to keep the game going, and investors happy. In the years to come, the equity market may not be able to make new all-time highs. But this is not a lose-lose scenario for equities. Companies instead of rewarding investors with higher index prices, they can reward them with higher dividends. After all, an investment in dollar-denominated markets is like investing in dollar itself. And if you believe in the Dollar Milkshake, then everything measured in dollar is most definitely for you! The recession everyone is convinced that is coming, may never come. Capitalism has worked tremendously well for the US. QE and the Stock Market mania fed the .com bubble. Who knows, maybe QT and the Dollar mania may feed another bubble. Capitalism and money work in mysterious ways... Bubbles and Recessions come when nobody expects them to come. With so much money printed, we either created a recipe for disaster, or a recipe for the biggest bubble humanity has ever seen. Who knows what the effect might be if that money supply is put to work. And with such a significant shift in Bonds (from long-term bullish to long-term bearish), the money invested in them will eventually leave the Bond market and seek other adventures. No matter what happens, the future is scary and exciting! Tread lightly, for this is hallowed ground. -Father Grigori
TVC:DJI
by akikostas
4
DOW JONES: Huge bullish breakout. Can target 35,900 this quarterDow Jones crossed above the long term Channel Down and turned technically bullish on the 1D timeframe (RSI = 66.042, MACD = 233.400, ADX = 55.323). Given that the bottom pattern was an Inverse Head and Shoulders, which was something we pointed out previously (see prior idea at the bottom), the new buying wave can take the price a lot higher than our short term target on R1 (TP = 34,350), even above R2 to Fibonacci 2.0 and R3 (TP = 35,900). The 1D RSI indicates that the index is on the biggest strength since late November. Prior idea: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
ULong
by InvestingScope
2
DOW JONES Broke above the Channel Down. Nothing can stop it.Almost a month ago we gave the most optimal buy entry for Dow Jones (DJI) exactly at the bottom of its 4-month Channel Down: The price has hit our medium-term target and zooming out into the longer term horizon we can see the grand pattern being an Inverse Head and Shoulders (IH&S). This is a bullish reversal formation, in fact it may be characterized as the bottom formation of the 2022 Bear Phase. The long-term target can be as high as the Shoulders Resistance, the Higher Highs trend-line. If it is inversely symmetrical to June, we can expect a +12.78% rise. This gives us a target for the next 4 weeks at 35400. Note that if it follows the late October 2022 rally, then it is possible to give one last pull-back within the 1D MA50 (blue trend-line) and 1D MA100 (green trend-line) before our target is materialized. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
ULong
by TradingShot
1
➖15% S&P500 Index drop by H&S pattern💣The S&P500 index is moving near the resistance line and 🔴resistance zone($ 4,200- $ 4,100)🔴. The S&P500 index also seems to be forming the right shoulder of the Head and Shoulders pattern in the 🟡Time Reversal Zone(TRZ)🟡. I expect the S&P500 index to drop to the 🟢support zone($ 3,590-$ 3,490)🟢 after breaking the neckline. S&P500 Index (SPXUSD) Analyze Daily time frame⏰ (Log Scale). Do not forget to put Stop loss for your positions (For every position you want to open). Please follow your strategy, this is just my idea, and I will gladly see your ideas in this post. Please do not forget the ✅' like'✅ button 🙏😊 & Share it with your friends; thanks, and Trade safe.
SP:SPXShort
by pejman_zwin