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Do Todays Participants & Pundits Understand Todays Stock Market?I’ll get right to the point. NO Now granted, as the reader, you’re immediately drawing your own conclusions about that opening statement. You're probably thinking... The author of this post is obviously bearish and therefore has an agenda. Ok, that’s fair. Then indulge me as I explain, in detail , why I believe todays market participants and financial news pundits do not understand Todays Stock Market. My only request of you, the reader, is to continue reading with an open mind till the end and then judge for yourself. I practice a form of technical analysis called Elliott Wave Theory. Whether one would consider it theoretical after 90 years since it’s introduction, or not, is a discussion for another time. This post is not some diatribe debating, nor defending the Principles of Elliott Wave. However, I’ll sum up Elliott Wave for the uninitiated in a simple explanation for sole purpose of understanding this post. Elliott Wave Brief Explanation: Elliott Wave means to forecast crowd behavior specifically as it pertains to price action within a given market. As a long-time practitioner of this form of analysis I am still amazed to this day, to see price follow through on my forecasts with a high degree of both accuracy, and reliability. I’m never bored. But in truth, this form of analysis has little merit in markets in which there are no LARGE CROWDS. Price action in thinly traded penny stocks, fly by night crypto currencies, and so forth. You simply cannot forecast what the crowd will do, in the absence of a true crowd. However, in LARGE CROWDS, the basic premise of Elliott Wave is prices tend to move in 5 distinct “Waves” within a given trend. During the course of that 5-wave trend, price will correct, consolidate or digest gains or losses in 3 distinct “waves” prior to that trend completing. To examine those waves within a trend, an analyst should be able to drill down into smaller and smaller time frames and see the same principles playing out as these price action patterns are fractal in nature. They are self-similar. Ok, that is an overly simplified explanation of Elliott Wave. Nonetheless, its one in which I think is enough where I can guide you through my broader reasoning. Let me start out with my long-term SPX analysis. Elliott Wave Analysis on the SP500: In the above chart you'll find the 4-hour fractal of the below larger monthly fractal. I have posted these charts many times before, so long-term followers of my work will recognize them. But I start this broader explanation with the below monthly chart. Displayed in the chart below you see a series of labels in green ( I ), ( II ), and ( III ). Those green labels are what Elliott Wave deems a super-cycle price action analysis…or count. Its referred to as a “count”, because practitioners of Elliott Wave Theory are simply counting waves. So if Elliott Wave is based on a series of 5-wave trend patterns, and 3-wave counter trend patterns that are FRACTAL in nature (my earlier over-simplified explanation), then after completing a wave ( III ), we obviously need a wave ( IV ). Now in all fairness to you the reader, has the monthly price action confirmed we’re in a super-cycle wave ( IV ) and wave ( III ) has in fact completed? NO. What confirms the price action is in a super-cycle wave ( IV ) event is a breach of the 2020 Covid-19 low of ES Futures 2174. That price (2174) is the litmus test for continuation to higher highs in the SPX or a long slog in equities that could last decades and decimate global wealth. Now I have long told my members that... although I do not know what the catalysts are that ultimately validate the forecasted price action, those catalysts always tend to show up on time . I think in my trading room, my members would whole heartedly agree with that statement. So, as I analyze price action from the day to day to the 1-minute chart and justify my primary long-term analysis today I am in no shortage of potential catalysts that are brewing. You know them all (Debt Ceiling, Regional Banking Crisis, The Fed, Inflation, Geo-Political…etc.) I choose not to speculate on the potential event, but on history. Is there a precedent? Yes, History. There is…. somewhat. Here it is. The last time we had our wave ( II ), super cycle counter trend price action, was the stock market crash of 1929. That is easy to see on the above chart, but what were the clues, or the potential catalysts leading up to that event almost 100 years ago? Clue #1: The Panic of 1907 The Panic of 1907 was…wait for it…” A Financial Crisis”. During this time, the irresponsibility of bankers caused Bank Runs, and ultimately that translated into a 50% decline in the NYSE. That’s half…50%. This dried up any liquidity for loans. In other words, a credit crunch. Sound Familiar? Sidenote: You starting to get the sense that bankers always seem to be present at the scene of the crime so to speak? It’s perplexing. Who are these nefarious characters? Banking, in general, is terrible business model. But I digress…back to the point. Clue #2: The Spanish Flu The Spanish Flu of 1918 was a global influenza pandemic (H1N1) that decimated a third of the population on planet Earth. The Spanish Flu became a global pandemic because exiting World War 1, the war effort censors were accustomed to censoring bad news. Therefore, most of the population was ill-informed regarding the dangers of (H1N1) and disproportionately this effected the young and old members on the population. This was also a time of climate change and population migration patterns and this exacerbated the spread and effects of the flu. This starting to sound like you’ve seen this movie before? Clue #3: Massive economic bounce back The jobs market was in high deficiency mode as early as 1922 having had so many of potential workers having died in the previous pandemic prematurely. This caused a massive supply-demand dislocation of (1) human nature to get out from under the atmosphere of The Spanish Flu and (2) live and consume…and the work force to meet those needs on a global scale. This resulted in a large economic expansion that lasted almost 10 years. In the United States, we refer to this era as, “The Roaring Twenties”. These three clues culminated in the stock market crash of 1929...hence our super-cycle wave ( II ). As an analyst, as an intellectual, and as a student of history, I cannot ignore these flashing confluence of events in my time. The Irish statesman, Edmund Burke has been attributed to having said… ” Those who don’t know history are destined to repeat it.” The Spanish philosopher George Santayana is credited with the aphorism, “Those who cannot remember the past are condemned to repeat it.” War Time British Prime Minister Winston Churchill wrote, “Those that fail to learn from history are doomed to repeat it.” In summary, how does this all shake out? Well, first and foremost I’ll say that this is not your father’s stock market, it’s not even your grandfather’s market. It’s more than likely your Great Grandfathers market. That market was terrible. That market had seismic effect on both society and asset appreciation. Keep in mind, this market has had it’s bull and bear markets. However, for the last almost 100 years, we’ve been in a secular bull market. During the last 100 years, we have experienced 3 impactful cyclical bear markets within a 93 year secular bull market since our super cycle wave ( II ) event in 1929. During the last 93 years, the stock market has essentially appreciated in a solid, predictable 45-degree angle higher. Buy and hold, buying the dip, has been both the statistical and practical successful trading thesis. If this is a wave ( IV ) super-cycle event, trader sentiment must change. This takes time. Traders must now go through re-conditioning. A mourning, if you will, of the past 93 years of a secular bull market. Unfortunately, this only occurs with the loss of money, and over time. Cavemen continued to touch fire as it is visually magical. However, after a while, I’m sure they drew the conclusion this is NOT ADVISED . I keep CNBC on in the back ground of my small trading office. The incredibly smart contributors, and titans of money they feature quote metrics like typical bear market durations, what typically happens after the Fed has paused rate increases 6 months afterwards…and I’ll be the first to announce to you, the reader, THAT NO LONGER APPLIES. We are no longer in that 93 year long 45-degree angle up. Those metrics… worthless . Those typical expectations… miss-guided . THIS IS NOT YOURS, NOR IS IT YOUR FATHERS MARKET. Now granted, this is somewhat of a thought speculation on my part (as of today). However, I do wonder…if traders, market participants and financial news pundits have objectively considered if they understand TODAYS STOCK MARKET. FOOD FOR THOUGHT. CHRIS
CME_MINI:ES1!
by maikisch
10
5/1 Watchlist + NotesSPY - Crazy finish to the week and month. Bulls absolutely controlled Friday and pushed us even higher on the weekly to create an engulfing week. We had super strong closes on the daily, weekly, and monthly. I cannot imagine a world where we don't push even higher next week. I would imagine we test the 418 and 420 levels at some point. Was not expecting this at all, so I am curious to see how next month plays out. With the FED predicting a bearish second half of the year, this price action leads me to think we may have already priced in a small recession as the FED claims we may have, or we are seeing a final push to the upside to trap some buyers before seeing a bigger drop. As always we have to play what's in front of us and not what we are expecting, so proceed with caution and try not to let your own personal bias effect your trading Watchlist: Nothing on the scanner really has my attention for Monday so I will just be trading SPY. I do have a long position on ARKK that I am swinging so I will be watching that as well. All inside setups and 50% retrace setups listed on my scanner in the picture for this post. Main Watch: ARKK - Just watching to manage my position. I think with the bullish bias on SPY that we have, we should see a push higher on ARKK on Monday Previous Main Watch: U + ARKK - Both created bullish engulfing days and I ended up entering ARKK 37.5 C for this coming Friday's exp. Up currently on that position and holding. Did not take a position on U. Just watching them still Watchlist Stats From Last Week: 2/5 SPY Predictions 3/5 Main Watch Plays Personal Stats: 0/2 on the week Overall: Red - Didnt trade much due to it being finals week for me - Took a couple small L's but got some W's with forex and crypto scalps so I am pretty much B/E on the week, but for these lists I like to count only my options trading - Looking to make a hard rebound this week with my schedule now being much more open and having more time to focus on trading. Lets make some money this week. As always be smart, follow rules, and always be striving to learn more and better your trading. Cheers
AMEX:SPYLong
by Alanger17
Possible ES MMBM in play for the rest of the week.I'm looking for possible MMBM in play for the remainder of the week. Reason being since the market opened on Sunday it has been seeking SellSide liquidity exclusively with today trading into a discount liquidity pool after the lunch hour. While certainly there is room for further downside expansion, I believe that the market could begin trading back into its weekly range to liquidate any buy stops stacked along the way all while filling inefficiencies. As long as we remain below 4150 I think we could expect further downside but if the market shows a willingness to break aggressively above 4150 then we could expect some new highs to possibly be formed. This is not financial advice just pure speculation from a neophyte trader, GLGT.
CME_MINI:ESM2023Long
by Mr_5Handles
Weekly Update: So Far... Everything is Going According to PlanI’ve shared this chart with my followers for a couple months now. You can check my posting history to see how the forecasts have NOT changed, but the chart is filling in nicely. Tracking the minutia at the micro level has been maddening over the last month. In my trading room I’ve advised my members to focus on the intermediate term pattern depicted in the above chart. Nonetheless, yesterday’s seemingly straight up move after about 9 am I’m sure scared traders who were positioned short. The irony of yesterday’s price action was although price traded not unexpectedly in my micro target box perfectly, I was expecting that sort of price action to take up till Monday or Tuesday of next week. So, in today’s market I’m not ruling out one more high into the 4170 area which would be the .786% retracement area. Much above that and the potential gets raised of invalidating our triangle pattern we started back in the last week of December 2022. But with no violation of the micro target box region which stood at 4130-4170 when price was at 4068.75 I have to continue to adopt the triangle pattern. So how does this triangle pattern conclude? I have guided both members and followers of my work with red arrows on the above chart since the end of February 2023 when the triangle pattern was first given credence. Currently, I am projecting this pattern to conclude mid-to-third-week in May. Yesterday’s price action has caused me to adopt a more sub-divided a-wave of our larger e-wave of the triangle, to complete our primary circle B. This was adopted after what I originally would be our a-wave came up slightly short of the 4064-4065 area, followed by a quick a-b-c retracement yesterday into 4166.50. Yesterday’s price action, although introduced further complexity and sub-divisions into what I am projecting as an e-wave bottom in a larger triangle B…to the degree we do not eclipse 4170, but ultimately 4198.50 (which would be a new short term high). I have to say… so far, everything is going according to plan.
CME_MINI:ES1!
by maikisch
8
US500 short ideaI know a lot of people want the stock market to crash and burn, and for the US economy to go into a recession. Well here is my idea of what to look for in a short trade on the US500, ES, SPX etc. But be warned, after this tax drain, if the US Congress lifts the debt ceiling, your shorts will be blown out of the water. There will be more and more positive fiscal transfers as the level of interest rate as seen in the EFFR stays high and even goes a little higher.
UShort
by Macrobriefing
ES Sunday Trend Analysis We are still ranging in this orange downtrend channel but still within the larger purple channel. We broke out of the uptrend that price was following since March, so where we go from here is yet determined. If the purple channel is broken to the downside, I believe we'll see some selling pressure, if we hold, I believe we can work our way above 4200. Price has been holding 4145-4150 since Friday the 14th and price has tested it multiple times since then, making it weaker each time we tough. If 4140 fails and we close blow, 4128-4122 is my target. I wouldn't be interested in any longs on a bounce, as the risk to reward isn't there while we are still within the orange downtrading channel. I would try longs off of 4122-4128 bounces and I would try shorts off of 4150.
CME_MINI:ES1!
by AmpedTrading
Three Words You Don’t Want to Hear in the Next 3-5 MonthsI spend 90% of my day analyzing the various financial assets within my coverage basket. I produce long, intermediate, short and micro price forecasts for my members each day. On occasion, I make forecasts that are clear from an analytical standpoint, but are not from a real-world standpoint. The truth is, whatever the event catalysts are they always tend to show up at the right time. Case in point. The beginning of February 2023 I forecasted we were topping in our ongoing corrective structure upwards when the SPX Futures were at 4208.50. However, I was convinced the ES Futures price would first strike 4242 before embarking on a retracement that would, minimum, take it to the 3950 area. In retrospect, we came up short of my 4242 target and then... CUE THE DRAMATIC MUSIC…. Then the regional banking crisis reared its ugly head from out of nowhere. Not only did prices hit my target of the 3950 area, we declined to the 3839.25 level, before finding a short term bottom. My point is, as an analyst, I'm never going to know what the catalysts are…but they remarkably tend to show up at the right times for validation. …and now we have a silent catalyst brewing. One that has yet to rear its ugly head, but daily threatens us, to do so. No, I’m not referring to the HKEX:1 Trillion or more in unrealized debt losses on the books of major and regional banks that remain undisclosed (we’ll get to that shortly). Additionally, I am not referring to the pending bomb embedded in the commercial real estate market… (Work from home is here to stay…yet we have trillions of dollars in loans in empty vanity sky-scrapers). Side Note to CEOs: Good luck getting people who CAN work from home and accomplish their jobs, to back to facing a stressful commute, exposure to toxic work environments, office politics, etc…. I’m referring to the Debt Ceiling Standoff in the US. Let’s start this discussion with the chart above. This chart should be familiar to you as I have posted it for the past several weeks. The far right-hand side of the chart you’ll notice after potentially getting price back within maybe 10% (Red Arrows) of the SPX’s all time high…We would then lose approximately 30%-35% of GLOBAL WEALTH attached to the index. My analysis bears (no pun intended) that out…BUT WHAT WOULD BE, WHAT COULD BE …THE CATALYST TO CAUSE SUCH A SWIFT & DRAMATIC DECLINE? Well, maybe it begins with hearing these three words…maybe reading about these three words…or listening to the TV and hearing these three words… ”MOTION TO VACATE” What is a “Motion to Vacate”? Let me get back to that. First, the debt ceiling, what is that? Since the US Congress rarely passes a budget anymore (last budget passed was August 1, 2019) they vote of something called a continuing resolution or (CR). This allows for the government to operate only for a specified period of time provided the debt does not grow past the statutory limit of the CR. During the timeframe of the CR, the government does things like sell US Treasury Bonds, pay Social Security, Medicare, fund the military, etc. normal course of operations stuff. When the statutory limit on what the US debt can be is reached, the debt ceiling needs to obviously be raised. Historically, this has been a perfunctory exercise. Raising the debt limit simply allows the government to continue to pay its bondholders interest, send out SS checks, Pay Medical expenses associated with Medicare, pay the paychecks of service men and women, etc. THIS IS NOT NEW SPENDING, OR FUNDS FOR PET PROJECTS. Not raising the debt ceiling would be similar to your bank freezing your checking account. You have the money, but you are prevented from to having access to it, therefore you cannot pay your bills. Your creditors will not care you have the money, they only care they don't have their payments. Hence, your credit score is negatively impacted, and your future ability to borrow becomes more and more difficult. Eventually you are deemed a credit risk. Now imagine that, but on a far far larger scale. Suffice to say, the implications would be dire. If the US defaults, regardless of technical or actual, the US economy would go into a recession very quickly. Just like when any of us do not pay our bills, to get a loan, we would have to pay much higher interest rates. Therefore, interest rates would go higher in the US. Why? Because why would anyone want to hold treasuries if there is no longer a guarantee to be paid on time. So US treasuries would be sold...thereby driving interest rates higher. That would cause Inflation to also go higher, and this tends to spiral. One negative after another, the economy eventually contracts and the US would enter a recession. To what magnitude? No one knows. This hypothetical scenario has never played out in real life. Ok, now that you know this would be bad...let's get back to "Motion to Vacate". So, what was once perfunctory, is now seen as leverage to negotiate on behalf of a minority party. Unfortunately, this new class of representatives have heard of this tactic, but never seen it used with fruitful outcome to a minority party. The reason is NO US President wants to negotiate something, that has been historically seen as a mere technical expectation of operating the government. Therefore, ALL US presidents refuse to negotiate the Debt Ceiling and simply expect a clean (CR) to raise it and allow the government to pay its CURRENT obligations. Enter the new Speaker of the House. Kevin McCarthy. Kevin McCarthy was voted in as speaker of the US House after an unprecedented 11 rounds of voting in HIS CAUCUS. To achieve those votes, he assured the holdouts he would support using the Debt Ceiling to extract demands from the current President. This new class of representatives made their point of view clear, if you cannot be successful negotiating, we will remove you as speaker and install a new speaker would could be successful negotiating with the current administration. (Like that makes a lot of sense). The removal of the speaker would begin with only one member of the speaker’s caucus making a “Motion to Vacate” the chair, on the floor of the House of Representatives. This would automatically trigger a floor vote to remove Kevin McCarthy from his speakership. The same speakership his caucus had to vote 11 times before they could agree on him as their leader. This unproductive move, knowing the current administration wouldn’t negotiate with the last guy, digs both sides into their respective positions. There is no practical reason why a new speaker would somehow miraculously change the outcome. Hence the probability of a technical default would escalate exponentially. So, I’ll conclude with how I started. In the above chart you can see clearly that if my analysis is correct, and a catalyst shows up in time for validation purposes only, we could soon be in for a decline of minimum (4350-3200) of 26% in a relatively short amount of time. I speculate something would need to change, a new shoe to drop of some magnitude, leading up to that. Additionally, I say minimum because our 2020 Covid-low of approximately 2,200 I believe needs to be revisited to validate a super-cycle event. (See Below Chart) Maybe that area is not visited within this near term decline I am forecasting (4350-3200) we experience by end of this year. However, I do believe we will sub-divide in such a manner that eventually, those levels become realistic to our future selves. Lastly, I'll revisit the fact that aside from the Debt Default possibility becoming more realistic by the day...the banking crisis still looms. This is an issue that will not go away until banks who hold long maturity dated treasuries can substantially reduce those holdings, as that area to store and earn interest on capital has a variance of 2-3% with what banks and money markets are paying their depositors to store capital with them. These unrealized losses on these long dated treasuries will have to be resolved. To sell these holdings would drive bonds prices down, and rates higher....potentially further exacerbating the problem. In addition, over HKEX:1 trillion in commercial real estate loans that need to be paid off or refinanced in the next year as those loans come due. The Banks will have to hoard capital to solve their problems, and who on Wall Street wants to refi commercial buildings with few tenants? Is HKEX:1 trillion in commercial real estate debt about to default? In summary, this post accomplishes one thing for me. It explains to my followers in detail the problems we're currently facing and may soon face. As traders, this is an educational piece. However, in fairness, there's a lot of speculation contained in this post. I want my followers to aware of the potential hazards we face trading this market each and everyday. I'm ready, willing and able to go long this market, provided I am afforded both the analytical basis and the trading set-up. I can manage risk, and having protocols in place will protect me to a large extent in the event any bullish thesis goes bust. Nonetheless, I struggle to find any practical basis to be anything but short this market when set-ups are clear...and choose to remain flat when price action is retracing higher. But I will say, my trading strategy for the foreseeable future becomes crystal clear if in the next three to five months I hear the words, ..."Motion to Vacate" being used in the US Congress. Judging by my chart, whether it's the US debt ceiling, the baking crisis, commercial real estate loans, or some other unknown...A catalyst should be showing up to validate the BIG RED ARROW ON THE RIGHT OF THE CHART ABOVE.
CME_MINI:ES1!
by maikisch
14
ES: Recession/Depression 2023ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 ES: Recession/Depression 2023 THE END IS NEAR.
CME_MINI:ES1!Short
by PivotX
1
How to Day Trade or Swing Trade S&P500 Futures No IndicatorsHey Traders, So over the years I bout alot of courses about trading the markets. In one course I took I learned about a reversal strategy using candlesticks on daily charts. Although in the past I didn't consider myself a Day Trader I found this strategy to be appealing for it using the Stock Index futures. So now I sometimes do day trade the market if I get the right setup. The good thing about his strategy is that you only need to check the market once a day to see if there is a setup. Then you just place your stop orders and limit orders according to your risk management or you can also use options. Enjoy! Trade Well, Clifford
CME_MINI:ESM2023Education
by TradeTheIndex
10
ES Trend Analysis UpdateIt is clear on one thing. ES is basing for either a large move up, or down. Which direction? Who knows. We just have to react when it does. You can see ES is still within this purple main channel but riding the orange trend down. We have already broken out of the main uptrend (white), which usually indicates price would like to retest the highs or make a new high. If ES retests the main purple channel's support around the time it touches the orange downtrend's support at ~4126, ES could see another dip buy with strong momentum. Strong momentum buys or sells usually can be seen when two trend correlate with each other. On the other hand, if we fail 4126, we can probably see 4100-4080.
CME_MINI:ES1!
by AmpedTrading
Weekly Update: Is EVERYTHING about to come down together?Is a rare event when multiple planets are aligned in the night’s sky. It’s rarer still, when their aligned, and visible to the naked eye, and on-lookers do not require the use of a telescope. Let me explain. My crypto currency coverage list (SOL, ETH, BTC and ADA) have been rallying and hitting some of their initial sub-divided targets higher where I would soon expect them to retrace. Financials (XLF) could be completing a minor wave 4 high and now coming down in a wave 5. The SPX and the ES appears to have just completed their D-wave high in what I'm counting as a triangle and should be coming down as early as today. I suspect if I looked at some of the heavily weighted stocks of the SP500 they would show the same pattern and potential conclusion. Is everything aligned? The downside IN EVERYTHING appears clear enough, you don’t require a telescope to see that.
CME_MINI:ES1!
by maikisch
3
ES Measured Move and Running out of Steam?I do believe it's time for a slight cool off for the ES. The swings are getting smaller and we are getting tighter. Currently in a fairly large channel (main channel) but currently still in an uptrend as well. With the swings getting smaller, we will either break to the upside for a push above 4200, or break down for a cool off period back to around 4130-4100. We have also completed two legs up for a measured move. Looking like it's time for some correction. I am currently short at the 77's with profit targets of 65 (targeting the uptrend support) and 50 (targeting a breakdown of the uptrend and a third retest of ~50.
CME_MINI:ES1!Short
by AmpedTrading