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Stocks Selloff, Quickly Regain Value AreaStocks faced a steep selloff yesterday, sailing through the vacuum zone below the 4600's, to find support exactly at our level at 4580. From there, we caught a nice pivot back to value in the 4600's. This is a strong sign for bulls who were hoping to see a bottom in stocks soon. The fact that it was bought up so quickly, suggests we are trying to establish value in the 4600's. Once all the Fed hike and inflation data has been absorbed into the markets, then we are in a position to seek highs again. Currently, we are testing 4693, the last level in the 4600's, but a red triangle on the KRI is suggesting we are meeting resistance. The Kovach OBV is still pretty flat and hugging lows, but if we get another wave of buying, we could easily solidify the 4700's again, with 4729 and 4763 the next targets.
FX:SPX500Long
by quantguy
Stocks Hug Lows Ahead of Key DataStocks are establishing value near lows. We saw a brief attempt at higher levels, notably 4729, but several red triangles on the KRI confirmed resistance there. Subsequently, we have pushed lower with 4668 as the next level to provide support. We are holding a narrow range at the the moment between this level and 4693. We appear to be forming a bear flag or other consolidation pattern. The Kovach OBV is still quite bearish, so we could see another push lower, to test 4649, 4632, or 4580. If we catch a bid, then 4729 is the level to watch. We have inflation data and more comments from Fed's Powell today, so this could be a driver either way.
FX:SPX500
by quantguy
2
Why we Shouldn't Get Hopeful on Stocks... Just YetStocks are ranging at lows, after crashing down to the 4700's from highs in the 4800's. Sharp choppy trading established the current range between 4668 and 4729. Long wicks have tested the lows of this range, and the upper wicks seemed to make and attempt to break out, but a cluster of red triangles on the KRI has confirmed steep resistance at 4729. The Kovach OBV is still abysmally bearish, and does not seem to be showing signs of equilibrating (bottoming out). This could indicate oversold conditions and the fact that we may be in for an attempt at a relief rally. If so, we must break 4729, then the next level is 4763. The next level down is 4649 if we sell off further.
FX:SPX500
by quantguy
Stocks Plunge on Hawkish FedStocks have taken a sharp dip downward on hawkish fed minutes. We have blasted through 4729, but have found support around 4700, after testing the next level down at 4693. Dedicated readers should have been prepared for these levels. The Kovach OBV has dipped sharply, but does appear to be bottoming out, suggesting that we may be attempting to establish value around current levels. With soaring yields and higher interest rates, it is difficult to justify another run for highs, but if we do make an attempt, 4729 and 4763 are the next targets along the way. If the bleeding continues, then we will see support from a cluster of levels in the mid 4600's, then there is a vacuum zone down to 4580.
FX:SPX500
by quantguy
Next Target for SPX?? 📈🤑Stocks have pressed higher, with the S&P 500 eeking out new highs. We are within inches of hitting our target of 4821. We do appear to be running into some resistance as confirmed by two red triangles on the KRI. The Kovach OBV is still relatively flat, so we will need more momentum to definitively break our target at 4821. If so, the next target is 4854, identified by a Fibonacci extension level anchored at the current range. Watch for momentum at open, which will be necessary to punch through 4821. If we don't see that, then we can retrace back to support at 4763. This level seems to be holding quite strong, but if we retrace further, then watch 4729 or 4693.
FX:SPX500Long
by quantguy
Stocks Begin the New Year Strong💪Stocks started the year with risk on sentiment, finding support at 4763. We anticipated a bit more of a retracment, and posited that stocks could test 4729 or 4693, but the slight dip to support at the nearest level of 4763 seems to be all we've got for now. The S&P 500 is within inches of all time highs again, with 4821 as our next target. The Kovach OBV has leveled off near highs, suggesting that, for now, we don't have enough momentum to break out to new highs. Let's see how risk sentiment develops toward the open. For now, we should be able to hold the range between 4763 and 4821.
FX:SPX500Long
by quantguy
Stocks Retrace from Ranging At HighsWe finally saw a bit of a retracement in stocks. Three days of ranging finally broke down. We emphasized that the longer stocks hold a range at highs, the more likely they are to test lower levels. This is exactly what happened, as we tested the next level down at 4763. We are seeing support here as confirmed by a green triangle on the KRI. Further support should be seen at 4729, should be break down further, then again at 4693, but it is doubtful we will see levels this low today. It is more likely for stocks to range in the broad value area between 4763 and highs at 4821, though it is unlikely we will make new highs today either.
FX:SPX500
by quantguy
Stocks Hold a Narrow Range. What's Next??Stocks continue their very narrow range, with the S&P hugging 4800, just around all time highs. The Kovach OBV is completely flat, suggesting that the range should hold until we have some buying or selling interest. Watch the open for a heads up as to the direction for the day. The more we hold the range, the more likely a breakout is to occur either way. We have been anticipating a reasonable correction this week, with 4763 or 4729 likely targets for support. If the rally continues, and we definitely don't want to get in the way of this if it does, then 4821 is the next target.
FX:SPX500
by quantguy
Stocks Pause Below All Time HighsStocks have paused their massive rally which took all the indexes up to new highs this week. The S&P 500 has paused below our target at 4821, and flatlined, ranging as we anticipated yesterday. We were anticipating a range day, or a retracement after making new highs. There still appears to be an affinity for higher levels as stocks shrug off multiple risk factors. But if the markets get spooked one last time before we close 2021, then we will likely see support at 4763 and 4729. If we see another burst of bull momentum, then we could easily hit our next target at 4821.
FX:SPX500
by quantguy
Stocks Blast Off! What is the Next Profit Target??Stocks stubbornly refused to retrace yesterday, and saw a massive rally that blasted through our profit target at 4763. We anticipated a retracement due to a variety of technical and fundamental factors, but are seasoned enough to know not to get in the way of stocks when they are ripping. We still feel a slight retracement is in order before the New Year, but if not, 4821 is the next target. We are seeing a red triangle on the KRI at current levels, suggesting that we are facing resistance. A retracement could take us back to 4763, then 4729 and 4693 will be the next levels of support from below. The Kovach OBV is still pretty strong, but may be starting to level off suggesting at least a ranging period after Monday's rally.
FX:SPX500
by quantguy
Four Reasons Why Stocks Might RetraceStocks rallied all last week, in the proverbial 'Santa Claus Rally'. The S&P 500 bottomed out at lows at 4545, and spanned almost two full handles since then. Currently, we are ranging just below highs. The Kovach OBV has completely flattened. The fact that we are near highs, have little momentum, are close to the end of the year, and are still grappling with Omicron worries (including canceled flights), suggests that we may anticipate a dip in stocks into the beginning of this week. We should support at 4693 and 4668, if we do see a retracement. We will see if the holiday exuberance kicks in again this week, but a retracement is highly likely in the mean time. Our next target for stocks is 4763.
FX:SPX500Short
by quantguy
Three Reasons Stocks Slid. When to Buy Back??Stocks have sold off hard, as we warned yesterday. This is a typical risk as stocks had just barely eeked out highs, and more momentum was necessary to sustain the rally. We have retraced significantly, but still within our projections from yesterday. The S&P 500 has given up the 4700 handle, and is currently seeing support from a cluster of levels in the mid 4600 handle, including 4668 and 4649. We are seeing strong support at this latter level confirmed by several green triangles on the KRI. If we break down further, we have one more level to provide support at 4632, but then we have the vacuum zone we've been warning about down to 4580. If we break down to this level, it may be a good idea for a long trade, but keep an eye on the news. Several factors have led to selloff in stocks, and we will see if these factors persist a risk off tone today. Investors seem to be shifting from growth stocks to value stocks, and this has taken its toll on the tech sector in particular. Additionally, omicron fears seem to be reigniting globally, and we have the reality of the Evergrande default setting in as well, though this was largely priced in.
FX:SPX500
by quantguy
3
Stocks Roar on Fed DecisionStocks showed weakness going into the FOMC meeting, but despite the hawkish outlook: tapering and 3 rate hikes in 2022. The markets have totally priced this in, and as a result stocks rallied to new highs. We anticipated stocks to rally for this reason, but the extent of the rally was formidable. We have punched through 4729, and are heading toward our next target at 4763. The Kovach OBV has turned up sharply, but is starting to curve over, as the S&P does appear to be losing steam. We should have another burst of momentum as we approach the open. If so, that should be more than enough to take us to our target of 4763. After that, we are likely to range a bit in a sideways correction as we establish value in the new price area. Watch for support at 4729, 4693, and 4668.
FX:SPX500Long
by quantguy
Stocks Edge Lower Ahead of FOMCStocks dipped further into negative territory as we antipated yesterday. The S&P 500 briefly dipped into the vacuum zone we identified between 4632 and 4580, but it was able to recover quickly, and is currently clinging to support at 4632. We are seeing several green triangles on the KRI, suggesting support is forming. We anticipate stocks to range a bit before the FOMC and from there, we will see how the markets interpret the data. Some hawkishness is expected, with persistent inflation putting the Fed in a difficult spot. If they come out more hawkish than expected, we could easy punch through the vacuum zone to 4580 or below. If they are less hawkish than expected, or even dovish, then we could recover highs. It is doubtful that we will make new highs today, but the next target is 4763.
FX:SPX500
by quantguy
2
Stocks Slide from HighsStocks took a sharp dive from highs as we predicted yesterday. We anticipated this because the S&P 500 was maintaining an extremely narrow range at highs, from which we would have required significant momentum to break out. We simply didn't see that, and the risk sentiment turned south later in the day, hence the selloff. We first saw support from 4668, then 4649 (where we are currently seeing support), both levels we have identified here for you. The last level in this cluster is 4632, then we have a vacuum zone to 4580. The Kovach OBV has taken a notable dip, but does appear to be starting to level off. It is likely that we will not see much action today, in anticipation of the FOMC statement tomorrow, so anticipate support and ranging in this cluster of levels identified. But if the selloff continues today, watch that vacuum zone to 4580.
FX:SPX500
by quantguy
1
Can Stocks Rally Again??Stocks have edged up to highs, hitting our exact level at 4729. The level 4668 provided good support on Friday's small retracement. The Kovach OBV is drifting higher, but this indicator seems weak with respect to the rally, and so we anticipate some resistance at these highs. If we do retrace then 4693 and 4668 should provide support. If we are able to break out, then 4763 is the next target. This level is a Fibonacci extension level from Fibonacci levels anchored on the upper and lower bounds of last night's move. We are starting to get into the holidays, so we will see if stocks have the strength for one more breakout before traders sign off for Christmas break.
FX:SPX500Long
by quantguy
Stocks Drift Lower Ahead of CPIStocks have been subtly trending downward after topping off just under highs at 4729. The 4700 handle did not hold very long and we quickly declined back to comfort in the 4600 handle. We are currently seeing support at 4668, and have a long way to go to retrace this rally, should momentum peter out. The Kovach OBV has flattened as we await CPI data. Watch out for CPI data this morning. Higher inflation has been a persistent worry for the past few months, and it does appear to be factored in, but a large deviation from expectation could certainly still move the markets. The Federal Reserve is in a difficult position, potentially being forced to raise interest rates on an already shaky economy to combat inflation. If we see more forward guidance from Powell, this will definitely have an impact on stocks. The S&P 500 does have support from levels below in the 4600 handle, but below those, there is a vacuum zone to 4580.
FX:SPX500
by quantguy
Stocks Awaiting Key Macro DataStocks seemed to have topped off just below highs. Persistent risks like the impending Evergrande default, Fed tapering, and Omicron seem to be completely shrugged off. However we do appear to be in a sideways correction between 4668 and 4729. We are seeing both green and red triangles on the KRI corresponding to the upper and lower bounds of this range and suggesting a narrow band for the price action for now. Tomorrow is a big data day, as we will have CPI and Michigan Consumer Sentiment. It would make sense for stocks to hold the range in anticipation of this data. But if we do break out, 4729 should provide resistance. If we break down from this range then there is a cluster of levels below ending at 4632. Watch the vacuum zone below that to 4580.
FX:SPX500
by quantguy