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Stocks Face Volatility Near HighsStocks continue to see volatility at highs. We had a nice burst of bear momentum yesterday as the markets were pretty risk off. We have gotten support from 3887, and this seems to hold. Broadly, the S&P is likely to hold the rather large range between 3887 and 3963. We are at 3909 right now, which is broadly in the middle of this range. It could go either way. The Kovach OBV is on the uptrend, after registering the bear momentum. However, we are at the upper bound of the KRI, and near a significant level, so we may retrace back down to 3910
FX:SPX500
by quantguy
1
S&P 500 Retracement??The S&P is bouncing around between lower levels below highs. Currently 3910 is providing support, but may be forming the neckline of a head and shoulders. Stocks are looking very weak right now. The Kovach OBV is a bit oscillatory, but is broadly flat. The Chande is in the middle which suggests we may be looking at a further retracement. The first level of support would be 3887. This has provided support in the past. The next level would be 3867, which seems to align with a Fibonacci level. If we are wrong, we will know at open. We could easily retrace to 3937, or even back to highs at 3962.
FX:SPX500
by quantguy
1
Stocks Feel the Yield Rally! When to Buy Back??Yesterday, bond prices collapsed and stocks felt the bond fervor as investors clamoured onto higher yields for the first time in over a year. The S&P retraced from highs, but is still clinging to support at the next peg down from highs, between 3936 and 3927. We do appear to see an inverse head and shoulders pattern forming with the headline at 3937. Watch for a breakout from here at open, which would make a run back to highs at 3963. It is doubtful we will break this level today, but if we do 3970 is the next target. If we break down, which may be the case as the S&P looks like it is having trouble completing the second shoulder of the inverse H&S, 3908 and 3887 will provide support
FX:SPX500Long
by quantguy
S&P 500 to 4000!!!The S&P has hit our price target exactly. We had identified 3963 as a potential target using our Fibonacci Extensions several days ago. Currently stocks are ranging, feeling out the new price territory. It could go either way from here. We could see another retracement, which would take us down to 3937, 3928 or 3909 at the most. These would be good opportunities to buy back. If we breakout, the next target its fairly close at 3978. The next level after that is 4009.
FX:SPX500Long
by quantguy
Breakout Imminent in Stocks!!!Stocks are consolidating into a triangle corrective wave. This is a perfect consolidation pattern an suggests a breakout is imminent. We are bullish of stocks and anticipating a bullish breakout at open which will take us back to 3928. From there we will likely meet resistance and consolidate further perhaps in a bull wedge before breaking out to higher highs. If we are wrong, we will find support at 3882 or 3871. The Kovach OBV is very strong and the Kovach Chande is neutral which is a perfect storm for a breakout.
FX:SPX500Long
by quantguy
Stocks Reject All Time Highs!! What's Next??We called out resistance at new highs with stocks for many reasons. The higher highs were increasingly less pronounced, momentum was sluggish and the Kovach Chande was gradually tapering. That and being at or near ATH's would take some momentum to break through. We were spot on with this analysis. The S&P tried to break new all time highs, and did so for a split second before completely and utterly rejecting them, diving to support exactly at the levels we identified. It sliced through 3898 to finally find support at 3882, which would have been a great level to buy back, and some readers did take advantage. Currently we seem to have gained some momentum from the bounce off 3882. The Kovach OBV has turned positive again, and the Chande has swung up. This however suggests that we are back to overbought territory and are due for a rejection of highs at 3928 or 3937. If we are able to break highs again, which will likely happen next week 3963 is the target.
FX:SPX500
by quantguy
Retracement In Stocks??Stocks have formed an extremely narrow range at highs. This is an extremely common behavior after an asset has made strides especially to the extent that the S&P has. However it does appear to be running out of steam. The Kovach OBV is still very strong, but has plateaued a bit, suggesting that momentum is waning. Additionally, although we have been seeing higher highs and lower lows, the hallmark of a bull trend, the extent has decreased with every attempt, forming an overall arc pattern. The signs are pointing to a correction in stocks or at least a sideways correction for a bit. If we do have a correction look to 3909, 3898, or even 3882 for support. These are a mixture of technical and Fibonacci levels. We are completely aware of bubble forming thanks to free Federal Reserve magic papers. So if stocks do breakout they will contend with 3937 first.
FX:SPX500
by quantguy
Stocks At Highs!! Retracement??Stocks have continued their ascent but are slowing down. Indeed, we are seeing higher highs, but at a decreasing extent. This suggests that a healthy retracement is coming. We are still 100% in bull mode, and would still solidly be so even with a retracement to 3824. A 50% retracement of the Fibonacci levels shown is much more likely, which could bring us to 3871. Of course, this assumes a healthy market not the bloated, fed fueled bubble of a stock market we have now. It is also perfectly reasonable under these conditions to break out again to new highs. If so, 3937 if a good target. Either way, it would be extreme FOMO to enter a long trade at this point, unless you expect an imminent breakout for some reason.
FX:SPX500Long
by quantguy
Stocks to Retrace from ATH'sStocks are facing some resistance at 3909, after breaking new highs once again. Our Fibonacci extensions predicted a price target of 3928, which the S&P will hit once it is able to break through 3909. It is likely that it will retrace from here first. The Kovach OBV was strong but has plateaued, and the chande (purple line) has dipped notably. We are still bullish of stocks but must note that the pendulum has swung to the bull side, and it's natural for it to swing back before another push for all time highs. The levels 3867 and 3848 will give us support. Currently we are finding some support at the psychological level of 3900.
FX:SPX500Long
by quantguy
Stocks Make New Highs!! Next Targets??Stocks broke through to new highs yesterday. The Kovach OBV suggests there was a lot of momentum here, and there had to be. The S&P formed a double top back in January validating the importance of 3867. It broke through and is currently having trouble with 3887. This is a level we called out last month, which was a Fibonacci Extension. The S&P is pretty extended right now, so we can expect a retracement, perhaps off 3887 to highs at 3867 or perhaps 3848. No one can deny the momentum in stocks, the Kovach OBV is quite strong. So eventually we will break through 3887 and hit 3928, then 3937. These are two somewhat proximal levels garnered from Fibonacci extensions. Note the vacuum zone between current levels and these targets. If the S&P is able to break new highs, it should sail through to those targets soon after.
FX:SPX500Long
by quantguy
2
S&P 500 Imminent Breakout!!Stocks are clinging to support at 3825. They have held a very narrow range between this and 3848 or so. It could really go either way from here. A narrow range always precedes a breakout, so whatever the S&P does, it is going to do with force. We are very close to all time highs, and these will not be easily broken. It will take some momentum to pierce through. If so, Fibonacci extensions suggest 3887 is our closest target. After that, we seem to have a bit of a vacuum zone before two Fibonacci extension levels at 3927 and 3937, just 10 points apart. From below, watch 3810, 3792, then 3758.
FX:SPX500Long
by quantguy
1
Stocks Volatile, Trade Carefully!!Stocks have maintained a period of extreme volatility. The S&P has zig zagged 200 points or so in the last few days. It has found support off lower levels at 3676, and has effectively returned to highs. It fell just short of all time highs, just under a congestion zone at 3844. It is likely to face resistance here. It is unlikely to see a breakout to new highs any time soon, since the S&P has extended almost 200 points already. This is quite a move even for stocks. We anticipate the volatility to continue, suggesting that we could test lower levels again. It is highly likely that we will test lower levels, then consolidate around highs, then breakout to achieve all time highs again. The levels 3792, 3810, and 3825 will all provide support.
FX:SPX500
by quantguy