On Daily Time frame S&P remains bearishS&P is in descending channel and will hit the lower lows is pattern is followed
Equity
Stocks Retrace After Hitting Our TargetStocks have hit our target of 4144, but ran into resistance here. The price action swiftly rounded off, forming a top at this level. We have since retraced back into the vacuum zone between 4122 and 4168. We should have further support at 4068, but if we retrace further then there is a vacuum zone below to 4009. The Kovach OBV has ticked downward with the retracement. We will need more momentum to punch through 4122 and 4144 before we can consider higher levels at 4178 and 4188, which are the next targets.
Can Stocks Continue Their Rally??Stocks have broken out and hit our next level of 4122. We are meeting steep resistance here confirmed by red triangles on the KRI. The Kovach OBV has lifted, and its clear that momentum has returned at least for now. It is likely that the markets think that the Fed may adopt an easier policy now that we are formally in a recession. If momentum continues, 4144 is the next target, then 4178 and 4188. If we retrace, then we have a vacuum zone below to 4068 then 4009.
SPX ~6000 if this time is not differentThe SPX chart has 2 goals and one constraint:
Demonstrate the VIX / VVIX ratio as an inverse momentum indicator for SPX. The VIX is risk adjusted" by VVIX and the ratio is more useful than VIX alone. "Useful" is similar to 'Statistical Power' and means less data required to identify smaller changes amidst higher volatility.
Suggest that an ATH of SPX 6000 is "not unreasonable" considering the pattern and magnitude of prior large moves (corrections, bear markets, and very large dips)
. . . Unless this time is different.
SPX - Local RejectionExpecting a rejection at resistance today - following a small wick incursion to 3,854 to 3,700. This will support buying initiatives / accumulation over the weekend.
A break of resistance on Monday
B, HF
Can The S&P 500 Break Out??The S&P 500 has broken out to the upper bound of the range, at 4009. After the uncertainty from the Fed was lifted, and we received our 75bps rate hike, stocks were clear to rally. However, as we anticipated, there was little action yesterday, and they are still respecting the range we identified. We made a brief attempt to rally into the vacuum zone above, but momentum quickly faded and we retreated to support around 4009. The Kovach OBV has picked up, so if stocks can break out further, there is a vacuum zone above to 4068. Watch for momentum at open. If it does not come through then we are likely to retrace deeper into the value area between 3909 and 4009, with 3909 an anticipated floor for now.
S&P and interest rates.As the Economy shows an outstanding outlook, and labor market data provide signals of strenght, inflation growth becomes a risk that is materializing and will push for further interest rate increases. Under this scenario, discount rates will continue increasing and puting preasure for samller equity valuations.
Stocks Range Ahead of FOMCThe S&P 500 is ranging near relative highs. We broke out into the 4000's, but fell short of 4009. Several red triangles on the KRI are confirming strong resistance at these higher levels. We have some support from 3909, and a break down could take us back to the mid 3800's, likely 3848 or so. A rally could test 4009 again. We expect the S&P to respect this range, and don't expect too much action from the FOMC today, as the markets have largely priced in a 75bps hike to combat inflation with a small probability of a 100bps rate hike, the largest hike since 1989 .
Nifty closed below the perfect resistance - 16660Today Market will start from negative and took a great support and break two resistance and settled into below a third resistance
once break 16660 can go upto 16720 can retest again 16560 tomorrow
Trader thoughts - make or break time for US equity marketsAfter the bullish breakout of the multi-month wedge pattern, as well as the upside break of the range highs, we’re seeing better two-way flow and consolidation in the US500 – On the daily, we’re yet to see a bearish MA crossover (3-EMA vs 8-EMA) and the 5-day ROC is still positive, which keeps me holding a modest bullish bias, but we’re back testing the former breakout at 3912.
It’s make-or-break time, and while the current price on our charts represents the strong after-hours performance from Microsoft and Alphabet, the bulls need the index to push through 4000 – where potentially we can see a trend develop. Options market makers are short gamma, and while the S&P500 futures bid-offer spread has improved, the same can’t be said for depth at touch price and the propensity to move the market causing exacerbated moves on any size orders is there.
US earnings are coming in rapidly and with 30% of the S&P500 having now reported Q2 earnings, we’ve seen 70% beating on EPS and 60% on sales. Sounds impressive, but this is modestly below the long-term trend in beats – analysts are always low-ball in their calls. We haven’t yet seen sizeable consensus downgrades to FY EPS assumptions and maybe that comes, but its hard to have a fundamental conviction that we’ve seen a definitive low in the equity market until consensus earnings have been cut – we know it’s coming, it’s a matter of when and how severe.
In the session ahead we get numbers from Meta platforms in the post-market trade, where the implied move on the day (priced from options) is 12.6%, as well as QUALCOMM (implied move of 8%). Apple (5.1%) and Amazon will potentially move the dial tomorrow – so if trading the index or individual equity, make sure you’re in front of the screens between 6:00 am and 06:30 am AEST. It could get lively.
The other big factor is the FOMC meeting (Thursday 4 am) and Chair Powell’s presser. Last month the US500 fell 2.8% in the following 6 hours from the FOMC statement, although this statement should be about nuance, than sweeping changes.
From a central bank system liquidity perspective we know the Fed’s QT program ramps up to full capacity in September and this means excess reverses will likely fall – this has typically resulted in a headwind to equity markets, and if the liabilities on the Fed’s balance sheet turn lower again then I suspect the NAS100 and US500 will follow.
So, there are many reasons to think we’ve not hit a low and that we turn back through 3800 supports, but price is true and if the buyers can build then we could see trending conditions. As always, be open to whatever will be will be.
Stocks Pulling Back, Awaiting FOMCStocks have retraced from relative highs at 4009. We have several red triangles on the KRI indicating some stiff resistance at 4009 and 3978. Volatility has consolidated quite a bit, which is understandable before the FOMC, today. Note that some sources are predicting a 100bps hike, but it should come in at least 75bps. This is largely priced in, but we should anticipate some volatility either way. We should have support at 3909 or in the 3800's. If we are able to break out we must first definitively break 4009, then there is a vacuum zone to 4068.
Rejected! Next Stop Point Of Control!When taking a look at the S&P500 on the Daily TF, we can see that there was a clear rejection from the Volume area high (Blueish line above). The next stop will be the point of control (Red line). Most of the market does follow this chart so before you short, double-check their chart.
Every day the charts provide new information. You have to adjust or get REKT.
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Stocks Hit ResistanceThe S&P 500 broke out, testing and rejecting 4000 as we anticipated Friday. We identified 4009 as a likely target, and the S&P 500 hit this perfectly, before retracing a bit. We are seeing the price action round off and potentially a small head and shoulders pattern forming, so watch for a retracement, which could present a buying opportunity. We should have support from 3937, a relative high if so. If we are able to break out again, there is a vacuum zone to 4068, which would be our next target.
Stock Rally Meets ResistanceStocks keep edging higher, but the rally is increasingly more labored, as we struggle through resistance levels. The price action is 'rounding off' which suggests that a retracement may be near. If so, 3937 or 3909 are reasonable targets. However, we are bordering on a vacuum zone to higher levels, the next target being 4068, which would coincide with lows of the range the S&P 500 held in early June. If we are able to punch through current levels of resistance we should see strong momentum at open, otherwise as retracement is likely.
SPX Daily TA BullishSPX Daily bullish. Recommended ratio: 90% SPX, 10% Cash. *Equities, Cryptos, Metals, Oil, Treasuries and EURO are slightly up today as DXY and VIX continue their market correction. Equities continue to go up on fading concerns of a recession paired with more strong earnings ( Tesla beat on both earnings and revenue ) but face a week of anticipated volatility with big tech companies (Meta on Wednesday and Amazon and Apple on Thursday) set to report earnings next week. For context: Netflix just reported a beat on earnings (earnings were lower in Q2 then in Q1) and miss on revenue after completing their second round of layoffs and experiencing its second consecutive quarter of declining new subscribers ; Snapchat also reported a beat on earnings (no change from Q1 and Q2) and miss on revenue while announcing they will slow hiring . This and the worsening energy crisis in Europe that is expected to get worse are pointing to increased volatility next week. Putin suggested that whether or not the Nord Stream returns to full capacity depends on how the Canadians handle the repair of a pipeline turbine and how the Germans handle sanctions regarding transporting the turbine and maintaining the pipeline. The EU continues to contend that Russia had reduced the Nord Stream's capacity by 40% even prior to scheduled maintenance and that punishing the EU economy with a winter energy crisis is part of Russia's plan. The ECB raised their central bank interest rate for the first time in 11 years from 50bps from -0.50% to 0% in response to a June 8.6% inflation reading; with a looming energy crisis the EU may soon learn this may not be enough. Key Dates next week: FOMC Statement release 07/27 at 2pm (EST), Meta Earnings Report 07/27, and Amazon and Apple Earnings Report 07/28.* Price is currently trending up at ~$4k and flipped $3938 resistance to support in today's session while also reclaiming the descending channel from August 2021 at the same level ($3938 resistance-turned-support). Volume remains Moderate (high) and has favored buyers for three consecutive sessions now at this critical price juncture, this is bullish. Parabolic SAR flips bearish at $3734, this margin is mildly bearish at the moment. RSI is currently trending up at 60 with no signs of peak formation; the next resistance is at 68 but RSI still hasn't technically established 53 as support so a downward correction cannot be ruled out. Stochastic remains bullish and is currently testing max top where it can coast in the 'bullish autobahn' for a few sessions. MACD remains bullish and is currently trending up at 1.60 as it breaks out above -11 resistance, if it can continue the breakout then the next resistance is at 11. ADX is currently trending down slightly and beginning to form a soft trough at 16 as Price pushes higher, this is mildly bullish; if ADX can begin trending up as Price continues going higher, this would be bullish. If Price is able to continue up then the next likely target is a retest of $4175 resistance for the first time since early June 2022. However, if Price breaks down here, it will likely retest the lower trendline of the descending channel from August 2021 at ~$3900 . Mental Stop Loss: (one close below) $3900.
Stocks ConsolidateStocks are consolidating at highs. Volatility has constricted immensely and we have been holding this narrow range for the past two days. This suggests that a breakout is imminent. The Kovach OBV has slumped and we are at highs, where we will encounter resistance. Unless sufficient momentum can come through we should break down to 3909 or 3825. If we are able to break out, then 4068 is the next target.
Can the S&P 500 Maintain the Rally?The S&P 500 has broken out, testing the very top of the range it has established this month. As predicted yeseterday, we hit our target of 3909. Momentum continued and we were able to hit 3963, before a brief retracement took us back to support in the low 3900's. The Kovach OBV is still flat, suggesting we will need more momentum to continue the rally. Watch for momentum at open. We are still at resistance from the top of the range and if we don't see much momentum at open, we can easily retrace back to support at 3810 or so. If we are able to break out, we only have a few more levels above until the 4K handle which is the next target.
SPX Daily TA Neutral BullishSPX Daily neutral with a bullish bias. Recommended ratio: 55% SPX, 45% Cash. * June Housing Starts came in lower than May (1.591M) at 1.559M and under the consensus estimate of 1.58M, implying that the housing market is starting to cool off as new home buyers appear to be increasingly fearful of a "technical" recession this year. June Building Permits came in fractionally lower than in May (1.695M) at 1.685M and over the consensus estimate of 1.65M, though not as significant of a reduction from the prior month this too is indicative of a housing market cool down in the second half of 2022. Both numbers can still be revised up or down but as it stands now, the demand cool down in the housing market is mildly bullish because it shows that the Fed's hawkish monetary policy is having its intended effect on markets. More clarity will be provided regarding whether or not this points to a recession when the July Jobs report (Employment Situation) is released at 830am (EST) on 08/05/22. Q2 earnings season has gotten off to a bullish start with banks (BOA, Citi) and certain pharmaceutical (J&J) and consumer retail (Hasbro) companies beating estimates but forecasts for the second half of the year remain cloudy. The Senate is scheduled to vote on the CHIPS for America Act today and, with some potential modifications, is expected to pass it by this week or next (if you used the Pelosi indicator congratulations on this one). Russia has apparently been seen restarting gas flows from Russia to Germany (after "scheduled maintenance") via the Nord Stream pipeline but at a reduced capacity; Russia claims that delays in repairs of a turbine sent to Canada are reasons for a 40% cut in capacity but German officials are saying that the turbine is just a replacement part that was supposed to be installed in September. Cryptos, Equities, Oil, Treasuries and the Euro are up today while DXY, VIX and Agriculture are down and Gold is relatively flat. In other news, on Bloomberg TV today, SEC Chair Gary Gensler once again floated the idea of banning payment for order flow and made mention of rampant noncompliance in the crypto industry that will be of chief importance to the SEC in the coming months.* Price is currently testing the 50 MA + lower trendline of the descending channel from August 2021 as resistance at $3938 minor resistance; additionally, Price closed above the uptrend line from 06/16 (~$3900) which currently gives PA a bullish tilt. Volume remains Moderate and after today's green close has favored buyers in seven of the last ten sessions; this is bullish. Parabolic SAR flips bearish at $3721, this margin is neutral at the moment. RSI is currently trending up at 55 as it technically tests 53 resistance; the next resistance is at 68. Stochastic remains bullish and is currently testing 76 resistance with no signs of peak formation, the next resistance after that is max top. MACD remains bullish and is currently trending up at -21 as it approaches a retest of -11 resistance (last time it retest -11 was 06/08); additionally, MACD is on the verge of reestablishing support at the uptrend line from March 2020 (~-35). ADX is currently trending down at 17 as Price is pushing higher, this is mildly bullish at the moment; if ADX is able to bounce here as Price continues higher, this would be bullish. If Price is able to break above $3938 resistance and turn it to support (it's already breaking above the 50 MA), the next likely target is a retest of $4175 resistance . However, if Price is rejected here then it will likely retest $3707 minor support before potentially heading lower to $3500 minor support . Mental Stop Loss: (one close below) $3906.
Stocks Fail to Break OutAs anticipated yesterday, the S&P 500 has rejected highs and sought support 3810, just under the mid point of the range the S&P 500 has been holding for July. This retracement was highly probable because we did not see the momentum follow through at open that it would take to break out higher. From here, we could test lows again, around 3737, which should hold as a floor. If momentum returns, we could test highs again at 3909, and potentially form a bull wedge pattern at this level which could indicate a potential breakout later this week.
Can Stocks Break Out??Stocks have rallied, with the S&P topping out at 3909. We have completely retraced the range, as recession fears and soaring inflation scared market participants last week causing a dip that tested lows at 3737. After breaking through this level and testing the next level below at 3714, we promptly pivoted, and retraced losses completely. However, we are running into resistance at 3909, and resistance is building confirmed by several red triangles on the KRI. The Kovach OBV has picked up a bit, but it will take more momentum to break through to higher levels. Resistance above is thin, and there are only three levels above before the 4000 handle. If we fail to break resistance, we should find support at roughly the midpoint of the range, at 3848, or again at lows at 3714.
Stocks Continue to RangeStocks have found support off lows after the selloff yesterday. Nearly double digit CPI did not fare well for stocks, with some market participants pricing in a 100 bps rate hike at the FOMC later this month. We at pivoted at 3714 after breaking lows at 3739. Currently, it appears that we are making a run back to the midpoint of the range but are struggling with resistance at 3810. If we are able to punch through this resistance, then we could make a run for the highs of the range at 3909. Othwerise, we expect 3714 to provide support, then 3694 if it caves.
