S&P500 - ES Next Stop 4000Price even can not hold the Sliding-Parallel of the Center-Line. This tells me, that if it can't jump back above the CL next week, the next target is 4000.
Happy Christmas §8-)
Es1
US500 ~ 4H Intraday (Bearish Capitulation)CAPITALCOM:US500 intraday chart analysis:
4H chart = bearish H&S pattern development + neckline test validation.
Fib retracements:
Straight line/left labels = March 2020 (Covid) low - Jan 2022 high
Dotted line/right labels = Jan 2022 high - Oct 2022 low
1st target (yellow dashed):
~4100 lower parallel channel & May/June lower-range chop confluence
Temporary oversold/bounce target? TBC..
2nd target (white dotted):
~4000 psych level, H&S extrapolation, 38.2% Fib retrace & declining trend-line (Aug 2022 + Feb 2023 peaks/pivot points)
Bullish reversal target:
~4200 (23.6% Fib retrace)
Are we rushing into the possible next Big Short?Is S&P 500 about to “CRASH”?
Are we rushing into the possible next Big Short?
So the S&P 500 futures contracts are depreciating in value, yes. Yet we foresaw this series of events. Has it been a rapid decline?
No.
The Price Action and structure continues sound.
There is no sign yet of panic or rapid selling signaling the Risk Off scenario all are predicting.
Do I expect further downside? Yes
I will go into my reasoning
1. DXY following a Bullish structure. Currently consolidating in a Bullish Flag pattern that could give us a break out of this pattern with a Higher High soon.
1. With a Bullish Dollar we can expect Bearish Equities.
Lets break ES pice action from top down.
- Monthly
- ES offered a Lower Low from June 23 Lows. But I am looking at the Monthly with caution since the month of October is not over yet.
- Weekly
- ES made its third down leg and yet it was unable to create a Lower Low in comparison to the week of October 2nd 23.
- The down closed weekly candle of last week looks strong enough to take out this low on momentum alone.
- So it is possible we will see 4235.5 before any other move.
-
- Daily
- On the Daily we see the last 4 Bearish days in a row, it can be assumed that the Bearish momentum along could carry price further down to establish a new Lower Low on this Bearish trend which will be at 4235.50
- I also like the potential of 4218.75
In conclusion. I do expect to see further downside but I would like to remind all that this will be the last week of October and to top that we are getting very close to establishing a new Lower Low on this Trend.
What does that mean?
Well we have had and extended leg down on this trend throughout the month of October. I would expect a retracement after a new Low is stablished with a subsequent bounce to settle a possible Lower High on this trend.
To accompany this thought it is the end of the Month and expecting a bit of retracemnt from the Monthly direction is healthy.
If you look at the Daily chart you will notice a gap between Thursday Oct 19,23
And Friday oct 20, 23. I am expecting price to target this Gap once the lows are stablished.
Still always follow price it will never steer you wrong.
S&P500: Megaphone buy opportunity.S&P500 is almost technically oversold on the 1D timeframe (RSI = 30.205, MACD = -54.210, ADX = 37.499) with the price reaching the 0.618 Fibonacci level from the March 13th Low. The last time the RSI was at 30.000 was on October 3rd, the previous LL of the Bearish Megaphone pattern. The two bullish sequences of this pattern have been around +4.60%. Since this is a double bottom signal, we expect a rise of equal proportion, targeting the 1D MA50 (TP = 4,315).
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Nasdaq Bank Index: Putting A Bad Hair Day Into PerspectiveElon Musk still sees danger ahead for the US economy if the Fed does not contain the regional banking crisis.
Financial blog Zero Hedge previously tweeted about the critical role of small and medium-sized banks in the US financial system — a hot topic following the sharp collapse this month of Silicon Valley Bank, a technology startup lender and the first bank to be taken over by regulators since the 2008 financial crisis.
Small and medium banks account for 50% of commercial and industrial lending and 60% of residential real estate lending, among other loans, notes Zero Hedge with accompanying charts.
“If the Fed does not contain the collapse of regional banks, there will be another Great Depression,” it wrote, referring to the economic crisis that lasted from 1929 to 1939.
"This is a serious risk," Musk replied to Zero Hedge.
According to the US Department of Labor, in 1933, at the height of the Great Depression, approximately 25% of the 12.8 million people in the US labor force were unemployed.
This wasn't the first time Musk had intervened on his social media about the collapse of the SVB. Last week, he compared the bank failure to the Wall Street crash of the 1920s that preceded the Great Depression.
"There are a lot of similarities this year with 1929," Tesla CEO said in response to a post from Ark Invest' Cathy Wood.
Nasdaq Bank Index BSE:BANK includes securities of companies listed on the NASDAQ that are classified under the industry classification benchmark as banks.
These include banks that provide a wide range of financial services, including retail banking, loans and money transfers.
On February 5, 1971, the underlying NASDAQ Bank Index was 100 points.
Tech stock Vs Energy stocks. The Competition for Decades This is an education-style publication where the main graph is a comparison (ratio) between two ETFs (funds) managed by State Street Global Advisors Corporation, the creator of the world’s first ETF (well-known in nowadays as AMEX:SPY ) and an indexing pioneer.
The first one ETF is The Technology Select Sector SPDR Fund, AMEX:XLK .
👉 AMEX:XLK seeks to provide investment results that provide an effective representation of the Technology sector of the S&P 500 Index SP:SPX .
👉 AMEX:XLK seeks to provide precise exposure to companies from Technology hardware, storage, and peripherals; software; communications equipment; semiconductors and semiconductor equipment; IT services; and electronic equipment, instruments and components.
👉 AMEX:XLK is a place where securities of American World-known Technology companies like Apple Inc. NASDAQ:AAPL and Microsoft Corp. NASDAQ:MSFT , like Nvidia Corp. NASDAQ:NVDA and American Micro Devices NASDAQ:AMD , like Cisco Systems Inc. NASDAQ:CSCO and Adobe Inc. NASDAQ:ADBE meet together.
👉 In contrast with other Technology-related ETFs like NASDAQ:QQQ (Invesco Nasdaq 100 Index ETF) or NASDAQ:ONEQ (Fidelity Nasdaq Composite Index ETF), stocks allocation in AMEX:XLK depends not only on their market capitalization, but also hugely on Technology industry allocation (like software, technology hardware, storage & peripherals, semiconductors & semiconductor equipment, IT services, communications equipment, electronic equipment instruments & components).
That is why allocation of Top 3 holdings in AMEX:XLK ( Microsoft Corp. NASDAQ:MSFT , Apple Inc. NASDAQ:AAPL and Broadcom Inc. NASDAQ:AVGO ) prevails 50 percent of Funds assets under management.
👉 Typically AMEX:XLK holdings are Growth investing stocks.
The second one ETF is The Energy Select Sector SPDR Fund, AMEX:XLE .
👉 AMEX:XLE seeks to provide investment results that provide an effective representation of the energy sector of the S&P 500 Index SP:SPX .
👉 AMEX:XLE seeks to provide precise exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries.
👉 AMEX:XLE allows investors to take strategic or tactical positions at a more targeted level than traditional style based investing.
👉 AMEX:XLE is a place where stocks of American World-known Oil companies like Exxon Mobil Corp. NYSE:XOM and Chevron Corp. NYSE:CVX , like EOG Resources Corp. NYSE:EOG and ConocoPhillips NYSE:COP , like Valero Energy Corp. NYSE:VLO and Phillips 66 NYSE:PSX meet each other.
👉 Weight of Top 3 holdings in AMEX:XLE (Exxon Mobil Corp. NYSE:XOM , Chevron Corp. NYSE:CVX and EOG Resources Corp. NYSE:EOG ) prevails 45 percent of Funds assets under management.
👉 Typically AMEX:XLE holdings are Value investing stocks.
The main graph represents different stock market stages of work
🔁 Early 2000s, or post Dot-com Bubble stage, that can be characterized as Energy Superiority Era. There were no solid Quantitative Easing and Money printing. U.S. Treasury Bond Interest rates TVC:TNX , TVC:TYX as well as U.S. Federal Funds Rate ECONOMICS:USINTR were huge like nowadays. Crude oil prices TVC:UKOIL , TVC:USOIL jumped as much as $150 per barrel.
The ratio between AMEX:XLK and AMEX:XLE funds collapsed more than in 10 times over this stage.
🔁 Late 2000s to early 2010s, or post Housing Bubble stage, that can be characterized as a Beginning of Quantitative Easing and Money printing. U.S. Treasury Bond Interest rates TVC:TNX , TVC:TYX as well as U.S. Federal Funds Rate ECONOMICS:USINTR turned lower. Bitcoin born.
The ratio between AMEX:XLK and AMEX:XLE funds hit the bottom.
🔁 Late 2010s to early 2020s, or post Brexit stage, that can be characterized as a Continuation of Quantitative Easing and Money printing. U.S. Treasury Bond Interest rates TVC:TNX , TVC:TYX as well as U.S. Federal Funds Rate ECONOMICS:USINTR turned to Zero or so. Crude oil turned to Negative prices in April 2020 while Bitcoin hit almost $70,000 per coin in 2021.
Ben Bernanke (14th Chairman of the Federal Reserve In office since Feb 1, 2006 until Jan 31, 2014) was awarded the 2022 Nobel Memorial Prize in Economic Sciences, jointly with Douglas Diamond and Philip H. Dybvig, "for research on banks and financial crises", "for bank failure research" and more specifically for his analysis of the Great Depression.
The ratio between AMEX:XLK and AMEX:XLE funds becomes great and respectively with monetary stimulus hit the all time high.
🔁 Early 2020s, or post Covid-19 Bubble stage, that specifically repeats early 2000s Energy Superiority Era. There is no again Quantitative Easing and Money printing. U.S. Treasury Bond Interest rates TVC:TNX , TVC:TYX as well as U.S. Federal Funds Rate ECONOMICS:USINTR are huge nowadays like many years ago. Commodities prices like Wheat CBOT:ZW1! , Cocoa ICEUS:CC1! , Coffee ICEUS:KC1! , Crude oil prices TVC:UKOIL , TVC:USOIL jump again to historical highs.
The ratio between AMEX:XLK and AMEX:XLE funds is fading to moderate levels that can be seen as 200-Month simple moving average.
💡 In a conclusion.. I wonder, how the history repeats itself.
This is all because markets are cyclical, and lessons of history always still remain unlearned.
💡 Author thanks PineCoders TradingView Community, especially to @disster PineCoder for its excellent and simple script Quantitative Easing Dates .
Based on this script, Easing Dates are highlighted at the graph.
S&P500 - Long; For now ...This naturally rimes with the Nasdaq signals and with the overall global equities outlook.
Here, two opposing forces are the most significant factor;
1) The unfolding (and enduring!) USD strength - Downward pressure ;
2) The massive, continuously inbound (to US) capital flows , primarily from Europe - Upward pressure .
Driven by the rapidly unraveling globalization (driven by a Europe which the US decided to turn into a bonfire that is now clearly visible from Alpha-Centauri, and a China which is dying of old age as the demographic apocalypse is hitting hard this year - 2023), these fundamental forces will likely make this year one for the records - especially when it comes index (equities) trading.
Many, many trading opportunities to be expected, throughout this year, probably far more than in other periods.
Laissez le bon temp roule!! ...
US 100 INDEX. THREE WORDS THAT YOU SHOULD KNOW - LET'S GO DIVINGThere are looming risks that could "break" the US economy and end its current growth cycle.
Third-quarter GDP estimates are tracking above 5% and the US economy has added more than 2 million jobs year-to-date.
But there are three looming risks that could "break" the stock market and economy and end its current growth cycle, according to a Tuesday note from Ned Davis Research. These are the three risks to consider.
1. A resurgence in inflation
Inflation has made progress in trending towards the Federal Reserve's long-term 2% target after CPI peaked at about 9% last June, but any resurgence in rising prices would threaten the trajectory of the Fed's current tightening cycle.
2. The 10-year Treasury yield is around 5.00%
The 10-year US Treasury yield has surged so far this year, hitting a 16-year high of 5.02% on Monday. A further increase in this key benchmark rate would spell trouble for the broader economy, specifically if the yield breaks above the 5.25% level.
The 5.00 - 5.50% yield range TVC:TNX was an important double-top in 2006/2007, and also represented the peak policy rate of that tightening cycle.
So perhaps we wouldn't take a break of that level lightly.
Higher interest rates increase borrowing rates for consumers and businesses and often curtail demand, leading to slower economic growth, if not a contraction in growth. The 10-year US Treasury yield was at 4.86% on Tuesday.
3. Credit conditions deteriorating
So far this year, the bond market has been more concerned about interest rate risks than credit risks.
Technical graph below for US 100 Index NASDAQ:NDX says that main 125-Day SMA support has been broken as well as major upside trend, and technical figure known as "Head and Shoulders" is in progress right now.
Bulls and Bears zone for 10-25-2023Markets ability to rally yesterday afternoon after a late morning sell off is encouraging.
Any test of ETH Low could provide direction for the day.
Level to watch 4262 --- 4260
Reports to watch:
US: New Home Sales
10:00 AM ET
US:EIA Petroleum Status Report
10:30 AM ET
SPX broke daily 233 EMA again. 25/Oct/23SP500 price broke daily 233 EMA again not a good sign for Bull. Short again @ 4400 +/-
S&P500 on its 1week MA50. Expect +4600 Xmas rally if it holds.The S&P500 / US500 hit this week the 1week MA50 after 7 months.
This is a major Support level, considering that it also made contact with the Rising Support of the 2022 market bottom. Also the 1week RSI hit the 12 month Support.
As long as the 1week candles close over this, buy and target 4610 (annual High).
This may be achieved before the end of the year since every rally in the past 2 years, even during the 2022 correction, was very aggressive.
If the index closes a 1week candle under the MA50, we should technically see a test of the MA200. Fair estimate at 4000.
Previous chart:
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Advanced Bull Flag ConceptsHave you ever wondered why price action sometimes forms a bull flag pattern?
Have you ever wondered if there is a way to predict whether a bull flag will break out before it actually does so?
In this post, I will try to address these questions by presenting a couple of theories about the nature of bull flags.
Bull Flag Theories
(1) The flag structure of a bull flag tends to form along Fibonacci levels, with the ideal flag proportion being an approximated golden ratio to the flagpole; and
(2) Fibonacci and regression analyses can provide useful insight into whether price will successfully break out of its bull flag pattern, sometimes long before price even attempts to do so.
I will try my best to clearly explain both theories in detail below.
Note: Although this analysis is also generally true for bull pennants, bear flags, and bear pennants, to keep things simple I will focus solely on bull flags. Additionally, this analysis is generally true across timeframes.
Part I - The Basics of a Bull Flag
First, let's begin with the basics. As shown in the image below, bull flags form when an asset is in a strong uptrend. The uptrend forms the flagpole of the bull flag structure.
The flag structure forms when price consolidates, usually in a falling trend. This consolidation phase is often characterized by price oscillators rotating back down while the price retraces only a small part of its prior upward move.
From a market psychology perspective, bull flags often form when most market participants who bought the asset continue to hold it expecting the uptrend to resume, while only a minority of market participants sell (or short the asset) as its price corrects downward. The bull flag pattern is a continuation pattern because it reflects the market's general expectation that price will eventually resume its upward move.
Once the price definitively breaks above the upper channel of the flag (often with strong momentum and high volume), the bull flag pattern is validated. Upon breakout, the expected move up is equal to the vertical height of the flagpole.
Part II - The flag structure of a bull flag tends to form along Fibonacci levels, with the ideal flag proportion being an approximated golden ratio to the flagpole
Here's where things begin to get interesting. Below is the golden ratio.
Two quantities, a and b (where a > b ), form the golden ratio if their ratio is the same as the ratio of their sum to the larger of the two quantities. (See the equation below)
The equation above shows the Greek letter phi which denotes the golden ratio. Phi is equivalent to a/b when such ratio is also equivalent to (a + b)/a.
Although bull flags can take various forms, it is my hypothesis, based on chart analysis and research, that the most perfectly structured bull flags (ones that also have the highest probability of successful breakouts) occur when the flag forms a golden ratio to the flagpole.
Mathematically, this means that the vertical height of the flagpole is equivalent to (a + b) and the vertical height (i.e. the width) of the flag is equivalent to b. This is also to say that price retraces down to the 0.382 Fibonacci level as measured by applying Fibonacci retracement levels along the flagpole (or to the 0.618 point on the vertical height of the flagpole if one measures from the bottom to top).
I realize that this can be quite confusing, so let’s walk through some visualizations.
Let's first visualize this hypothesis using the golden rectangle. Below is an image of the golden rectangle. A golden rectangle is composed of a square (with sides equal to a) and a smaller golden rectangle (with width equal to b and length equal to a).
Now let's rotate the golden rectangle to better visualize the hypothesized flag pattern.
The bull flag is hypothetically an approximation of the golden rectangle, whereby the width of the flag is in a golden ratio approximation to the length of the flagpole.
In the illustration below, there are multiple bull flags contained within a Fibonacci spiral. The spiral is made up of golden rectangles, with each larger golden rectangle containing a smaller golden rectangle inside it. The smaller golden rectangle is the flag structure, and the length of the larger golden rectangle is the flagpole.
One can think of the Fibonacci spiral and the golden rectangles as a series of bull flags that build on top of each other in a repeating pattern. In this diagram, price is represented by the increasing length of the sides of each golden rectangle. In other words, the price on a chart can be seen as spiraling higher after each bull flag breakout.
Of course, not all bull flags form a structure that approximates the golden ratio, but it is my belief that in forming a bull flag, price action is aspiring to achieve as close of a golden ratio approximation as it can. I believe that the bull flags that best approximate the golden ratio structure also present the highest probability for a successful break out.
To learn more about Fibonacci spirals, including the golden spiral that Fibonacci spirals approximate, you can check out this Wikipedia article: en.wikipedia.org
Part III - Fibonacci and regression analyses can provide useful insight into whether price will successfully break out of its bull flag pattern, sometimes long before price even attempts to do so.
To see how Fibonacci levels and regression analysis can give insight into whether a bull flag will break out or break down before it does so, let's consider an example.
Let’s consider the massive bull flag that the iShares Russell 2000 ETF (IWM) formed in 2021.
In 2021, the monthly chart of IWM formed what appeared to be a bull flag, as shown below.
Now let's see why Fibonacci analysis and regression analysis were warning that this bull flag was not likely to break out successfully.
First, IWM's price did not retrace to a Fibonacci level before attempting a breakout (when using the pole as the Fibonacci retracement reference point). In the chart below, we see that price tried to break out, without even so much as retracing down to the highest Fibonacci retracement level: $196.71. By not undergoing Fibonacci retracement, price did not give its oscillators the opportunity to rotate back down fully. Instead, price remained overextended at the time it attempted to break out.
Now let's look at regression analysis. Below is a log-linear regression channel that contains IWM's entire price history. As noted in my prior posts, a regression channel simply indicates how far above or below the mean (or average) price an asset's current price is trading. In the regression channel above, the red line is the mean price, the upper channel line is 2 standard deviations above the mean, and the lower channel line is 2 standard deviations below the mean.
A successful breakout of the bull flag would have taken IWM's price way above its regression channel, to a level that is too many standard deviations above its mean price for us not to question the probability of the breakout’s success. Achieving the full measured move up would have been extremely unlikely, assuming that the regression channel is valid and that price tends to revert back to its mean over time. What was more likely than a breakout was a breakdown, and a reversion back to the mean, which is what ended up happening with IWM.
Another interesting note about IWM’s bull flag is that it presented a false breakout in November 2021. This false breakout was presenting multiple warnings signs including being a UTAD test of a Wyckoff Distribution. As shown below, however, another important clue that the November 2021 breakout would likely fail was that the breakout was not confirmed when comparing IWM to the money supply (M2SL). See the chart below.
One can interpret this chart to mean that in late 2021, IWM’s price was rising because the central bank was increasing the money supply, but not due to improving strength of the underlying companies that comprise the ETF. Using the money supply as a ratio to an asset elucidates the true inherent strength of the asset's value. To understand more about why the money supply can be used in this manner, you can check out my post below.
Part IV - Additional Comments
I have a few additional comments. I usually use Fibonacci levels on a log-scale chart to identify Fibonacci spirals because Fibonacci spirals are logarithmic spirals. However, when using Fibonacci levels based on log scale, the ratios, percentages and numbers, can seem quite confusing because they are logarithmically adjusted. If you choose to replicate my process, please be mindful of this. While using log-scale charts is critical for higher timeframes (e.g. the monthly chart or higher), I have not identified much benefit to using it on shorter timeframes.
In a prior post, I noted that Plug Power (PLUG) is currently forming one of the best-looking log-scale, golden ratio bull flags I have ever seen. If my above hypotheses are true, I would expect to see PLUG move dramatically higher in the years to come. For more information about PLUG, you can read my post linked below. (This is not a solicitation to buy PLUG. Please do your own research and carefully consider all risks.)
At the risk of making this post too long and too dense, I just want to briefly note that it is also my hypothesis, based on observation and research, that the golden ratio is where many S-curve dilemmas are solved. If you don't know what an S-curve dilemma is and you'd like to read about this you can see my post below about Jumping S-Curves .
In short, an S-curve dilemma is another way of conceptualizing the question of whether a bull flag will break out or break down.
I hope that someone finds value in this post. I spent a lot of time studying, researching, analyzing, and cogitating the mathematical nature of price action to reach many of the conclusions here. Thank you for your valuable time in reading my post.
S&P500 broke for the second time the 200 EMAS&P500 broke for the second time the 200 EMA
This time it seem serious with a VIX index above 20 and moving higher, and the S&P500 index on the right top of a huge double top.
High yield bonds, war risks and recession risk add fuel to this move.
Target for the double top is the area 2630-2525 in the long term.
Bullish scenario only above 4600. Worth to be 100% cash and 0% stocks right now and stay at the windows.
Combined US Indexes BROKE DOWNThe last week proved to be the straw that broke an important support level, to close the week at a recent low. This is very significant as it is the first indication of downward momentum, having bounced off the same support three prior weeks.
MACD appears to be deteriorating again in the past week, and the VolDiv is definitely not improving.
What this is projecting is that there is more downside to follow, and if it breaks the next support levels, there would be a strong downward wave as technicals would have aligned by then.
Heads up... likely going down further...
S&P500: A rare buy opportunity within this MA zone.S&P500 is making contact today with the 1D MA200 for the second time in 2 weeks. The 1D technical outlook is naturally bearish (RSI = 38.503, MACD = -22.450, ADX = 29.479) since the 3 month pattern is a Bearish Megaphone and we are on the third selling sequence. It is not necessary to make a new direct hit on the LL trendline as the utmost technical support level in long term uptrends is the 1W MA50 and is where the second and last buy entry can be attempted. Our target is the 1D MA50 (TP = 4,360).
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S&P500 The most important test for a long-term uptrend is now.The S&P500 had a strong rejection on the 1D MA50 (blue trend-line) and made a 3 day bearish streak that brought it today on the verge of testing the 1D MA200 (orange trend-line) yet again. The last time it made a triple test between 4 days October 03 - 06) and managed to close all candles above it. As a result, if the S&P500 is to recover, it is critical to hold candle closings above or at least near the 1D MA200.
To get a better perspective of the important of the 1D MA200 during uptrends, it is useful to look at previous such corrections that didn't end up in deeper corrections (Bear phases) but instead extended the bullish trend with rebounds on the 1D MA200.
Such recent examples (besides the COVID recovery in 2020) are 2019 and 2018. In 2019 after two 1D candle closings under it (May 31, June 03 2019), the 1D MA200 held multiple times in July and September. Similarly in 2018, only two days (March 23 and April 02 2018) closed marginally below the 1D MA200 in multiple tests.
Bottom-line: the index MUST hold the 1D MA200 in order to overcome the 3 month correction since July and resume the long-term bullish trend it has since the start of the year.
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Country Garden is unable to meet the offshore debt payments The past few days were quite choppy for SPX. However, S&P 500 E-mini Futures have not broken above the 0.5 Fibonacci retracement level. That allows us to maintain a bearish stance and keep the recently introduced setup valid. As a result, there is not much to write about today, except for one noteworthy thing that caught our attention overnight: one of the largest Chinese real estate developers, Country Garden, failed to meet offshore debt payments (already in the grace period), suggesting default proceedings might be next. We will update our thoughts on the asset with the emergence of new developments.
Illustration 1.01
Illustration 1.01 displays the daily chart of ES1! and Fibonacci retracement levels.
Technical analysis gauge
Daily time frame = Neutral
Weekly time frame = Slightly bearish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.
Please feel free to express your ideas and thoughts in the comment section.
DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
S&P500 Bullish Flag calls for a buy.The S&P500 got rejected twice near the MA50 (1d), causing a 7 day decline.
Since the October rise has been stronger so far than this decline, we can consider it as a Bullish Flag.
The price is approaching the MA200 (1d), where the October rally basically started.
Trading Plan:
1. Buy on the current market price.
Targets:
1. 4380 (MA50 1d).
Tips:
1. The RSI (1d) is on the exact symmetrical level as the September 7th Low. An additional bullish signal, at least for the short term.
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Notes:
Past trading plan:
Powell's Speech to Provide Market Direction?S&P 500 INDEX MODEL TRADING PLANS for THU. 10/19
This week marks the beginning of the peak of Q3 earnings season, and a potential inflection points in the geopolitical risks with signs of potential ground operations to begin by Israel in Gaza. Geopolitical risks, high interest rates, sticky inflation, extremely strong jobs market, early signs of consumers beginning to scale back...yet, retail bullish positioning has increased this week again. Powell's speech today may not necessarily provide any clear market direction, yet it could lead to some knee jerk moves.
We have been publishing for the last two weeks: "Our models indicate 4310 as the level to close above for the current bearish bias to be negated". Now, this 4310 is the main support level and a daily close below that is needed for our models to turn bearish. The market tested this level briefly yesterday, Wed. 10/18, but bounced right back up to close a few points above it. This level may come into play again today, and how the price action ends today with respect to this level could give us some indications of near-term market direction.
Aggressive, Intraday Trading Plans:
For today, our aggressive intraday models indicate going long on a break above 4377, 4352, 4322, 4306, or 4285 with a 9-point trailing stop, and going short on a break below 4365, 4345, 4312, 4301, or 4280 with a 9-point trailing stop.
Models indicate explicit long exits on a break below 4370 or 4319, and explicit short exits on a break above 4370 or 4314. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 09:59am EST or later.
By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention).
To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals.
(WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)
NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS:
(i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s).
(ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors.
(iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk.
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ES1! Trade Plan For 10/19/23The bears are currently in control of the market, but in the bigger picture it is a two-way tape. It's important to note that interest rates are rising across the board. The 30-year rate is above 5% and the 10-year rate is approaching 5%. This is not a positive sign for stocks. As I've mentioned before, interest rates dictate market direction. When rates rise, stocks tend to have a bearish bias, overriding short-term technical indicators. Keep an eye on gold and oil as well, as they can indicate any escalation in the Middle East conflict. Currently, both markets are trading within their normal range of volatility.
Here's my plan for today: I'll be looking at my 3-minute chart with VWAPs and standard deviation lines. The bears will face their first challenge in defending the range of 4356-4363 this morning. If the market reaches that level, I'll consider short-selling. If we sustain trade below that range, we could potentially head down to the 4325-4315 area, although it may be a volatile journey. I anticipate some resistance from the bulls around 4341-4335, and the market could be highly volatile today.
If we manage to surpass 4363, there's a possibility of a rally up to 4377-4384. However, I won't be a buyer during that rally unless interest rates start declining. I'll be looking to short-sell again if the market reaches the 4377-4384 range. This is a crucial area for the bulls today, as a failure to break above it will likely lead to more sellers and downward momentum.
It's important to emphasize that this is a highly unpredictable market, so it's wise to trade with caution and keep positions small. Anything can happen in this environment, so avoid becoming too attached to any particular trade.
Bulls and Bears zone for 10-18-2023Last several days S&P 500 has been trading sideways since bouncing off its 200 DMA.
Any test of yesterday's Low could provide direction for the day.
Level to watch: 4382 --- 4384
Report to watch:
US: Beige Book
2:00 PM ET
ES 4HR Bear FlagIt's hard to pick a direction lately, but this 4 hour bear flag into prior support just screams bearish. Will it be a trap though?
ES Bull Flag Break to HigherES has shown great strength lately. We've had a bull flag break, retest of that full flag, into more demand. I think we'll see a measured move.
