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Stocks Looking WeakAs predicted here, stocks have fallen from a failed inverse head and shoulders breakout. We were able to predict this due to the incredibly weak 'breakout' from the neckline at 4068. We also noted that this was a very bearish omen, and called out the exact level of support at the head of the inverse H&S at 3887 or so. Currently, we are seeing a bit of support here, but the brief rally is nothing compared to the magnitute of the previous selloff, and this is confirmed quantitatively by the Kovach OBV, which is still incredibly bearish. If we fall further, its uncharted territory, but we should have support at the base of the 3800's. If we somehow muster the strength for a rally, then we must break 4068 before testing higher levels, which is a barrier for now.
FX:SPX500Short
by quantguy
2
VIX Daily TA Neutral BearishVIX Daily neutral with a bearish bias. *VIX (Volatility Index for SP500) has gradually been rising since November 2021 for a variety of reasons but mainly having to do with supply chain reorganization (due to Covid and geopolitics) and the Federal Reserve transitioning from QE to QT.* Recommended ratio: 45% VIX, 55% cash. Price continues to trend within the ascending channel from October 2021 and is currently testing 30.98 minor resistance after bouncing from the 50 MA at 26.60 support. Volume has been picking up and is the highest it's been since 03/29/22 . Parabolic SAR flips bullish at 34.31 (which currently coincides with the upper trendline of the ascending channel from October 2021). RSI is currently trending down at 51 after being rejected by both the uptrend line from 03/28/22 and the descending trendline from 04/26/22; the next support is at 35.65. Stochastic remains bullish for a second consecutive session after bouncing from 10.96 support and is currently trending up at 27; the next resistance is at 54.24. MACD remains bearish and is currently trending sideways testing 1.20 support for a fourth consecutive session as it attempts to break above 1.65 to form a bullish crossover. ADX is currently trending down slightly at 21 as Price is attempting to break back above 30.98 minor resistance; if Price can reclaim 30.98 and ADX bounces, this would be bullish. If Price is able to close above 30.98 minor resistance one more session, the next likely target is a retest of the upper trendline of the ascending channel from October 2021 at around 34.50. However, if Price is rejected here then it will likely retest 26.60 support. Mental Stop Loss: (one more close above) 30.98. *Price refers to Index value when it comes to VIX seeing that it's just a gauge of volatility... to trade VIX you would need to trade VIX futures like VIXY or VXX*
CBOE:VIX
by dailytaguy
Stocks Break Down HARD from Failed Inverse Head and Shoulders!!As predicted yesterday, stocks broke down hard. Recall that we observed that the breakout from the inverse head and shoulders pattern in the S&P 500 was looking extremely weak. This is usually a very bad sign and portends a dramatic failure. Indeed, we note only rejected current levels but completely retraced the entire pattern, currently finding support at 3887, the head of the pattern. We can expect support here, but if it does not hold, we are set to make new relative lows which is a very ominious sign. The neckline at 4068 is likely to be a prohibitive upper bound for some time, as is usually the case with failed H&S patterns.
FX:SPX500Short
by quantguy
SPX/USD Daily TA Cautiously BearishSPX/USD Daily cautiously bearish. *Amidst slowing economic growth and rising inflation Janet Yellen , Ben Bernanke and various economic pundits are vocalizing their concerns for prolonged stagflation in the short to medium term -- this and weak economic data from China (primarily due to lockdowns) is fueling broader fears of the Federal Reserve potentially not being able to execute a 'soft landing' like JPow wishes.* Recommended ratio: 30% SPX, 70% cash . Price was rejected by the lower trendline of the descending channel from July 2021 and is currently forming a Bearish Engulfing Candle as it retests $3938 minor support. Volume remains moderately high and is fairly balance between buyers and sellers in recent sessions but has favored sellers in seven of the past ten sessions. Parabolic SAR flips bullish at $4109, this margin is neutral at the moment. RSI is currently retesting 38.06 support; if it breaks below, the next support is at 16.67 (which would coincide with the uptrend line from 02/27/22). Stochastic remains bullish and is trending down at 49.43, if it breaks below 44.62 it would be a bearish crossover. MACD remains bearish and is currently trending down at -106 after failing its third attempt at a bullish crossover; if it can break above -100 it would be a bullish crossover, but if it can't the next support is the ATL at -236.13 (Covid crash in March 2020). ADX is trending sideways at 27 as Price is currently being rejected, this is mildly bearish; if ADX can continue trending up as Price falls then it would be very bearish. If Price is able to defend minor support at $3938 then it will likely consolidate before retesting the lower trendline of the descending channel from July 2021 at ~$4000. However, if Price breaks down here, it will likely test $3706 minor support before potentially falling to $3508 minor support. Mental Stop Loss: (two consecutive closes above) $4000.
SP:SPX
by dailytaguy
2
SPX/USD Weekly TA Cautiously BearishSPX/USD Weekly cautiously bearish. * CPI continues to go up since April 2020 (and for some commodities like bread, milk and oranges since mid-2019), Finland and Sweden officially apply to join NATO , the Fed remains committed to increased funds rate to ring in inflation, mid-term elections in the USA are underway and Republicans currently have a slight lean , supply chains are still getting battered by Russia/Ukraine & China lockdowns -- the overarching theme for equities remains a return to true value.* Recommended ratio: 30% SPX, 70% cash. Price is currently testing $3950 minor support for the second consecutive week. Volume remains moderate and is on track to favor sellers for seven consecutive sessions. Parabolic SAR flips bullish at $4652. RSI is currently trending down slightly at 32 as it approaches 25.26 support ( which would coincide from the uptrend line from October 2008 ). Stochastic remains bearish and is currently trending sideways at max bottom; a break above 4 would lead to a bullish crossover. MACD remains bearish and is currently trending down at -104 with no signs of trough formation; the next support is the ATL at -125.20. ADX is currently trending up at 29 as Price continues to fall, this is bearish. If Price is able to defend $3950 minor support, the next likely target would be a test of $4167 minor resistance. However, if Price breaks down here then it will likely retest $3722 support for the first time since March 2021. Mental Stop Loss: (one close above) $4167.
SP:SPX
by dailytaguy
Stocks Struggle to Continue the RallyThe S&P 500 had a very humble breakout from the inverse head and shoulders pattern we identified yesterday. Recall that we noted an inverse H&S pattern with a neckline at 4068. We suggested that if it broke out from this, we could easily test the 4100's. We did see a bit of a bounce past 4068, but nowhere near the momentum we'd expect from a breakout. Indeed, we weren't able to even clear 4100 before running into resistance. Though the Kovach OBV has tapered up slightly, this is nowhere near the momentum we'd like to see off a proper breakout. If we reject the breakout it is a very bearish sign indeed. We could easily retrace through the vacuum zone to 4009, or even test the 3K's again. If we are able to break out, then 4122 and 4144 are the first targets we will have to break before considering higher levels.
FX:SPX500Short
by quantguy
2
Inverse Head and Shoulders in Stocks?? 📈🤑Stocks appear to be forming the inverse head and shoulders pattern that we predicted would form yesterday. The "head" of the pattern extends down to the low 3900's with the neckline at 4068. We are seeing resistance from 4068 confirmed by several red triangles on the KRI, but if we are able to break out from here, then the 4100's are reasonable, in particular 4122 and 4144. The Kovach OBV is still very bearish and has flatlined suggesting we will need more momentum to come through, perhaps at the US open, before we can expect a breakout.
FX:SPX500Long
by quantguy
Stocks to Rebound this Week?? 📈💸Stocks have gotten support from the $3900's and have recovered the 4K's. We broke out past 4009, to come just short of 4068, before meeting resistance confirmed by two red triangles on the KRI. Currently, we are pulling back a bit, but still seem to have good support at 4K. Asian shares crumbled yesterday off extremely weak retail sales figures , so be mindful of this going into the US opening. If we fall further, we should see support in the 3900's again. If not, we may be seeing an inverse head and shoulders pattern forming with a neckline at 4068. If we break out from there, we could easily test the 4100's again.
FX:SPX500Long
by quantguy
Is a Reversal Near for Stocks??Stocks have continued their decline, set to end the week deeply in the red. We have completely given up the 4K's, extending down to our level at 3867 or so. We are currently seeing a small bounce from these lows, but have yet to test 4K again, which should provide resistance. If we keep it up, we may test 4009 or 4068. The Kovach OBV is still extremely bearish, so use caution. It might be a good idea to start accumulating a long position, just be wary of the fact that we may press lower. If the selloff resumes, we should find support from lows at 3867, then 3848 and 3825.
FX:SPX500Short
by quantguy
The S&P 500 Digs into the 3K's!!Stocks have continued their decline, for the fourth day this week. This week has been abysmal for virtually all risk-on assets. We have solidly given up the 4K's, which we noted was likely to happen if 4009 was breached. We appeared to see some stability as we tested 3978 and 3963 twice, but the selloff reinvigorated, and we smashed through these levels with ease. We appear to be getting some support at the moment from 3909, the last level in the 3900 handle. If that does not hold, we will break into the 3800 handle with 3887 and 3867 the first levels of support if we plummet further. Both Kovach momentum indicators are deeply bearish, and registering oversold conditions. A relief rally is reasonable at this point, but we will likely find resistance at 4009 with 4068 a likely ceiling for now.
FX:SPX500Short
by quantguy
Have Stocks Found a Bottom??Stocks found support at 3963, once again testing the 3K handle. The S&P 500 seems to be dipping into the 3K's with increased confidence. It is reasonable at this point for stocks to take a breather and mave a sideways correction or relief rally. The Kovach OBV has turned south but does appear to be curving over. If we are to see a rally, potential targets are 4009, 4068 and 4122. If the selloff continues, then 3937, 3928 and 3909 should provide support.
FX:SPX500Short
by quantguy
What if this time isn't different? A 2 year scenario projecting the financial crisis of 2008-2009 into the future Chart (W, LOG): Stocks: The averaged futures for SPX, NAS and DJ were weighted so that a 1 point change will imply the same change in $ terms. (For weights see www.barchart.com 200MA, 50MA, and 21MA Today's price and date: at the intersection of the cross. Financial crisis: Purple box on the left Implied scenario: Purple box on the right. Left edge starts 10/5/2022 ("Today" .. for the next 10 min) Methodology: The scenario is a scaled up copy of the box at 2008-2009. It is stretched to fit the current price, and it's 3 MA's. For simplicity the price / time aspect ratio was preserved. Criteria for 'best fit' (using IEI ) were the absolute level and curvature of the 3 MA's. In other words, the distance between the MA's, their slopes, and the speed each slope was changing. Main Implications: The scenario implies a crash (ripped from Feb 2009) beyond the March, 2020 COVID low, as far as the highs of 2015. This is after the end of QE, when Greece went into default and the Yen was devalued overnight . "Bottom" of the implied crash is one year from today (10/5/2022). Notes: 1. IEI : I eyeballed it 2. Gann would not be happy and the result could be different on a RENKO or equivalent treatment of time (a great follow up idea) 3. The night the Yen was devalued I held positions in gold in bond futures (GC and ZB). I have used stops without exceptions from that day on. best graphics:
CME_MINI:ES1!
by gb50k
3
Stocks MELT DOWN!! S&P 500 Breaks 4000!!Stocks broke down hard yesterday, as virtually all risk-on assets were sold-off. We smashed through 4122, 4068, and as we mentioned in the last reports, 4009 was the last level of the 4K's. This gave way, and we were able to test the high 3K's before finding support at 3978. We finally saw a small pivot from this level and have regained the 4K's, currently wavering in the vacuum zone between 4009 and 4068. The latter will provide resistance, then 4122 and 4144. It will take a sharp buyback to break all these levels and regain the 4200's. From below, 3978 should provide support, but after that, 3963, 3937, and 3928 are the next targets if it fails to hold.
FX:SPX500Short
by quantguy
A Bearish Start to the Trading Week for Stocks 🐻📉Stocks sold off sharply at the beginning of the APAC session, which is not a good omen for the upcoming week. We are back at relative lows again at 4068 and appear to be looking to test lower. A small wick has broken through this level, and we are not seeing any hints of a buy-back from these lows. The Kovach OBV does appear to be diverging from the price, but it would be highly risky to catch this knife now. If we continue to fall, we have a vacuum zone to 4009, which is the last technical level in the 4000's. If we do bounce from current levels, then 4122 and 4144 will provide resistance.
FX:SPX500Short
by quantguy
NASDAQ reaching end of Capitulation? Or only half way there?Every investor should ask themselves, are we in store for the usually 20-30% correction? Or are we in store for a market meltdown, similar to the Mortgage Backed Security collapse of 2007-2009? Or the Dot Com bubble during in 2001-2002? I have the most recent corrections in history highlighted, their reasons listed. > It is clear that the current situation and correction is more serious, than those in recent history. It has more drivers to the downside than the last 3 corrections. > It is also clear that the global economy isn't collapsing with like in 2008. In that recession, $10.2 Trillion alone was wiped from the American economy alone. That's not including the hit to Global Wealth, resulting in the elimination of many more Trillions. > It is further clear, current tech equities are not as overvalued as in the Dot Com bubble. I cannot deny that there has been an increasing number of Unicorns and IPOs entering the market. The majority of which have already had their values demolished. One only has to look at the recent SPACs, to see the smack these "Vision over Reality" companies have received from the market. >>> I believe we are more likely in a 20-30% correction, rather than a meltdown of 50-70%. Long term stocks go up.
CME_MINI:NQ1!Long
by FortunaAlgoAnalytics
4
Stocks Cling to SupportAs we anticipated here, stocks could do little to break 4306, which provided prohibitive resistance. The S&P 500 swiftly rejected this level and retraced almost the entire move from the pivot from 4068. We did find support at 4122, a level which dedicated readers will recognize well, confirmed by two green triangles on the KRI. However, we seem to be seeing a bear flag type pattern forming at this level, and if support gives, then 4068 is the next target. Watch the vacuum zone down to 4009, which is the last technical level in the 4000's. If we somehow muster a rally, we must first break through 4306 before we can consider higher levels.
FX:SPX500Short
by quantguy
What the FOMC Means for StocksStocks rallied despite a Fed hike of 0.5%, the largest hike since 2008. The economic conditions between that time period and now are similar, so keep that in mind for long term investing. We anticipated a rally yesterday, as the hike was fully priced in. Exactly as we predicted yesterday, the S&P 500 is seeing resistance from a relative high at 4306. The Kovach OBV has jumped with the rally, but is leveling off at current levels. We will see if we can muster the strength for another rally. If so, 4364 should provide resistance as it is a relative low. We should have support around 4188, roughly the midpoint of the current range, but if we fall further, we could test lows at 4122 or 4068 as an absolute min. Recall that if we break 4068, there is a vacuum zone to 4009, at the base of the 4K handle.
FX:SPX500Short
by quantguy
1
Stocks Await the FOMCAfter pivoting off new relative lows at 4068, stocks were able to maintain the 4180's. We are seeing strong resistance here confirmed by red triangles on the KRI. We have two levels at 4178 and 4188 that are proving difficult for stocks to break through. The stock market is clearly looking for guidance from the Fed at 14:30 EST, so we do not expect much action before then. There is a lot of uncertainty in the markets and this may provide much needed clarity. If we see a rally, then 4306 would be the target to the upside and should provide resistance. If we selloff again, then lows at 4068 should provide support. However, keep in mind there is a vacuum zone to 4009, which is the final technical level in the 4000's.
FX:SPX500Long
by quantguy
1