Get started

Recession

S&P 500 Are we about to drop it like it's hot?Tracking our wave count for the S&P 500 we could be about to drop hard this week, with CPI reports due out on Tuesday and the Fed due to deliver another hawkish statement on Wednesday we could be entering into the wave 3 of C which will be a very sharp move and will demolish a lot of wealth in a very short space of time. We will move away from the narrative of inflation peaking and into a new narrative of inflation not dissapating as quickly as hoped. In turn the Fed will have to keep interest rates higher for longer than anticipated (which they have signalled in the past few meetings). This is likely to scare investors out of stocks and into cash, namely the dollar. The 'bullish' move up that topped on the 1st of December was just a counter trend rally (completing wave 2 of C) and was designed as such to convice traders/investors that the bottom is in and we are heading to new highs, drawing in the bulls only to swing rapidly to lows not seen since the covid crash. We feel a conservative target for this wave 3 of C would be circa 3200, a very nice 750 points of profit from current prices.
CME_MINI:ES1!Short
by RAA_Trading
A Recession vs a Bearish Correction The bitter memory from 2008 still persists in our minds, or at least in the minds of those who witnessed first hand what a Great Recession is. In 2008 many variables were set and many gears were in motion. Long story short, even though the media has attempted to call a recession, or to spread the fear of the bear among the people, which technically yes, it is a bear market by definition, it is not a recession, just yet. We’re in a hiking rate environment, and still the major indexes have managed to find support on the long term moving averages. Comparing the levels and the moving average crosses today and in 2008, the main difference we find is the levels did cross down and the trend was officially bear. Afterwards a capitulation took place and the macroeconomic variables changed to provide the environment for a rebound and a reversal which gave birth to this secular bull market. We’re not at the capitulation level, the volume has been steady and we’re on the bullish side of the trend. What did we just witness? A bear leg, basically a painful correction. The indexes are turning to the upside, the market took profits and the VIX scratched above the 20 level. We’ll probably see more selling because we’re in the take profit part of the short term cycle. We’ll see how deep the market is willing to dive, but the positive momentum divergence and the back to the green of the indicators show the intent to go for a bullish leg. The target area is at the 4500-4600 level.
SP:SPXLong
by Madrid
2
SPY Uncertainty High as Trends CollidePrimary Chart: S&P 500 (SPX) as represented by SPDR S&P 500 ETF (SPY) 1. SPX and Recession A recession is exceedingly likely in the near future. It could officially begin next month or in 4 months. But does that mean bears should be rewarded by a straight-line decline to new lows? Sadly not. Unfortunately for market participants, the S&P 500 S&P 500 ( SP:SPX / AMEX:SPY ) has confounded bulls and bears alike in recent months. Since June 2022 lows, SPX has traded substantially within the 3800-4000 range (380-400 SPY). After last year's lows on October 13, 2022, SPX rallied hard into mid-December 2022, only to be rejected at its down TL from its all-time highs. Down trendlines are one way of gauging a trend, especially the more times that price touches the trendline and reverses, showing it is a valid and effective dynamic boundary for market prices. When price was rejected from the mid-December 2022 highs (on December 13, the date of that month's FOMC presser), it fell rapidly into the 3800 SPX / 380 SPY range. Then it spent over two weeks within that range doing price discovery before breaking out and retesting the downward trendline (from all-time highs) this week. Many bulls called for 4100 SPX / 410 SPY saying the lows are in. Bears furiously covered shorts. Then bears were rewarded late this week as bad macro data started to be respected by the markets. But will bears continue to be rewarded? Just because a recession looms does not mean prices must go straight to new lows. Yes, they might, and they could very well do so, especially with the Fed not backing off much at all. But price could also find a reason to squeeze shorts one last time before heading to new lows. Be prepared for anything. 2. VIX Signals VIX told us earlier this week that the S&P 500 ( SP:SPX / AMEX:SPY ) was in a precarious spot. A multi-year trendline on VIX lies just below where it closed Friday, January 13, 2023. This trendline provides major support at approximately 16.80 to 17.00 on VIX, and VIX closed at 18.34, its lowest level in a year (specifically, the lowest level since January 2022 when SPX had just finished making its all-time highs). However, VIX remains within a downtrend, subject to a trendline that has contained VIX levels since they made their most recent peak at mid-October 2022 lows. Until this downtrend is broken, clarity on the next trend leg in SPX will be difficult to find. In the VIX chart below, notice the yellow downward trendline containing VIX peaks more or less. And the pink line is the long-term upward TL that has provided long-term support. Some say TA cannot be applied to VIX. Strong opinions exist on both sides of this issue. Some of the best technical analysts serving institutions apply TA to VIX, and others do not. Supplementary Chart A.1 To those who are skeptical, SquishTrade would ask whether you would bet against the long-term upward TL each time VIX levels have reached it. In other words, would you sell vol when VIX fell to its very long-term uptrend line? Each time it has done so, it has moved back higher off that line. See Supplementary Chart A.2. Supplementary Chart A.2 3. SPX Triangle A triangle is a consolidation pattern. The Primary Chart above shows the current triangle that has formed. It is essentially a collision between a 3-month uptrend and a 13-month downtrend (lasting over a year since January 2022 highs). So long as price remains in this triangle, uncertainty about the intermediate term direction will likely remain high. Many triangles have arisen this year, and each one has led to new lows. This one may as well, as the yield curves and macro data support this outcome. But price could whipsaw out the top of the triangle for a month or two before heading to lows. All possibilities remain on the table. Expert Elliotticians have continued to change their wave counts as the year has progressed. This does not mean they are bad at their craft—it simply may point to the challenging nature of the price action. In the intermediate term, direction remains murky given the collision between these two uptrends. Ultimately new lows should be formed. But will a powerful rally rip higher to trap bears first? Will price action whipsaw around after a triangle breakout before figuring out a recession is coming and the Fed won't come to the rescue as quickly and spectacularly as in the past? These are the questions that many are trying to answer. This post contains no short-term directional bias—it's too close to call. So despite the powerful rally off October 2022 lows, and despite the powerful rally off late December 2022 lows, and the rapid decline this week, price remains stuck in a very large triangle on the daily chart. See Primary Chart. Notice how the edges of this triangle align in early February (right around the FOMC meeting) at key Fibonacci levels. See Supplementary Chart B.1 The smaller blue circles point to key pivot levels at 3800 SPX / 380 SPY and 4000 / 400 SPY. The larger blue circle shows the apex of the triangle and the (compressing) range it covers from 388 to 396 / 3890-3970 SPX, where price may remain for a bit longer. Supplementary Chart B.1 Here is an additional chart showing the Fibonacci levels a little more clearly. The key .618 retracement of the August-October 2022 decline lies at 399.79 SPY / 4000 SPX. Above that, a .786 retracement lies at 402.85 SPY. These now are both outside the downward trendline. If the downward trendline is adjusted for the whipsaws in mid-December 2022 (yellow downtrend line chart below), these key Fibonacci levels could be tagged within the "adjusted" down trendline. To the downside, notice how multiple Fibonacci levels come in right at 380 / 3800 SPX. This seems to be a line in the sand, also from a support perspective. When 3800 is decisively broken, watch out below for a new low. Supplementary Chart B.2 Note the 200-day SMA which has been widely discussed in financial media over the past week as it was tested yet again. This 200-day SMA is the magenta EMA in Supplementary Chart B.2. 4. Anchored VWAPs The anchored VWAPs—anchored to key swing highs and lows since June 2022—align quite well with the lower boundary of the consolidation triangle discussed, especially as more time passes and that lower boundary (an uptrend line from October 2022 lows) rises. See Supplementary Chart C.1. The VWAPs show a support range of 3870 to 3900 SPX / 836-388 SPY. If these are broken decisively, watch out for the upward trendline as it may break too. If these are held, as they have been so far this week, uncertainty remains high. Supplementary Chart C.1 VWAPs also show confluence with two key Fibonacci retracements, the .50 retracement and the .618 retracement of the recent rally from December 22, 2022 to January 17, 2023. Supplementary Chart C.2
AMEX:SPY
by SquishTrade
8
$ZN_F: Bonds have bottomedI think we have a low risk trade here, buying bonds until March 17th or so. Weekly trend is up, until said date, and could after that form a new consolidation and new continuation pattern over time if my view here is correct. Definitely a good idea to have some exposure to bonds, I personally opted for buying OTM calls to ride this signal, but you could use futures or ETFs as well (or just buy the actual bonds). Best of luck! Cheers, Ivan Labrie.
CBOT:ZN1!Long
by IvanLabrie
1
Bitcoin long term outlookFirst outlook on previous analysis turned out to be wrong, but the overall idea is very much valid: BTC is now hanging around supply area/886 retracement level and losing momentum, RSI showing heavy divergence. I wouldnt't expect prices to go balistic in 2023 with recession coming and goverments doing all kinds of crazy stuff. This could very well be the top of the "bull trap", "fake out" or however you wanna call it. In case we break 25k, 30k would be pretty much guaranteed, but i still excpect a sub 10k Btc within the year. Remember the market will always gear towards the maximum amount of loss for the max amount of people, I would argue that a sub 10k BTC would be almost a sure thing if we get to 30k as the top of the fake out, just cause it would be such a loss for most people. Always working level by level and taking action based on what the market tells me and not my feelisngs. I would only enetertain the possibility of the bottom having been 15k if we break above 30k, until then this is the plan.
KRAKEN:BTCUSD
by Filipe_forner
Can Dow Jones Rise Above Falling Trend Line?It's FOMC day! The markets have already priced in the 25bps rate hike so Powell's speech will be the most important thing today. A dovish Fed can help Dow Jones break the falling trend line and finally see acceptance above the resistance level of 34000. While I'm expecting a dovish speech from Powell today, the inflation fears are slowly fading away and recession fears are taking over, so in this environment, it's best to trade with minimized risk on stocks.
TVC:DJI
by egegonulcan
Copper is Screaming! Are you listening?Why is Copper so important to track and what can we learn from studying its price action. Copper simply put is the most used base metal in the world and really powers every aspect of world. Doctor Copper is telling us something. Copper has had an impeccable rally of the lows, this has been confirmed with the major rally in copper mining stocks. In this chart we have overlayed the inflation rate in orange with the price action in copper. The inflation rate has a delayed reaction based off of the price action in Copper. What we can observe recently is the price of copper topping 112 days before the inflation rate. Copper had a significant decline which was followed by a decline in peak inflation. Over the last 148 days, Copper has rallied 38%. Could this mean that we are about to see a delayed spike in the inflation reading?
CAPITALCOM:COPPER
by Trading-Capital
2023-2024 Forecast - from Dow Jones 2000-2002 dot com RoadmapThis is a chart of the Dow Jones 2000-2002 dot com bubble market overlaid on the Australian share price index, but really, this Dow Jones market could be laid upon a number of U.S. indices and you would still find a high level of correlation. The forecast dates are unlikely to align. The overlaid will need to be pushed and pulled forwards a backwards by a number of months to achieve 1, 2 or possibly 3 'best-fit' potential outcomes. The major low is generally more likely to aligning with a secondary low (a low just before or after the major low), or possibly one of the highs between the lows.
OANDA:AU200AUDShort
by U2Rinfinite
Making Hay in the Land of the Rising SunLong Japan; Short US. Market conditions exist for Nikkei-225 index (“Nikkei”) to remain resilient over the next quarter relative to S&P 500 (“S&P”). BoJ's unflinching commitment to negative rates benefits Japanese firms with a weak Yen. Meanwhile, worsening economic conditions in the US with feeble growth outlook and likely recession could send S&P lower. This case study illustrates a spread trade between Nikkei and S&P to extract positive yield with compelling upside and limited downside. Entry at 7.011 with target at 7.402 and stop-loss at 6.787. TAILWINDS SUPPORTING NIKKEI In a year of crumbling global markets, Nikkei has shown remarkable resilience. YTD Nikkei is down 6% relative to 18% decline in the S&P. Three reasons why: 1. Consistent low interest rates in Japan: Loose monetary policies inflate asset prices. Thanks to a benign monetary stance from the Bank of Japan (BoJ), Nikkei has been and continues to benefit. The BoJ has set its short-term rates at -0.1% and long-term rates at 0%. 2. Weak and weakening Yen: YTD 2022, the Yen is down 20% relative to USD. This helps boost profits for Japanese firms. While most central banks have gone hawkish, the BoJ is resolute in keeping its monetary policy loose. A weak yen makes Japanese assets cheaper. Rising demand for real estate, and a policy framework that incentivises foreign investment boost capital inflow into Japan (e.g.: TSMC new plant in Japan). 3. Pent-up tourism demand boosting travel industry and local spending: Easing pandemic restrictions and opening of borders unlocking pent-up tourism demand is turning the outlook of tourism industry bright. NIKKEI TECHNICALS Since October, Nikkei has rallied 11% to its peak on November 25th and 6.5% to its current levels post correction. The index sits gently above its 200-day moving average which perhaps serves as a support. The stochastic indicator is at 7.4 suggesting that Nikkei may be oversold and positioning for an upward correction. HEADWINDS FACING S&P 500 While Nikkei sets to soar, S&P appears feeble. US outlook is bleak with structural shifts pointing to slowing demand and job losses. Hawkish Fed with its stance on raising rates to fend off still hot inflation is likely to tip US economy into recession. a. Growing Recession Fears Recession looks likely after FOMC rate hike last week. As Chair Powell remarked, while a soft landing was still possible (skirting a recession), the runway for that was becoming shorter. Fed's stance remains firm and rightfully so. In the last eight (8) rate hike cycles, not once has the Fed eased until inflation print came lower to Fed funds rate. Expecting more rate hikes in 2023 creates downward pressure on the broader economy and the S&P. US growth outlook for the next year is a mere 0.5%. About 1.6m more could go jobless. In a sign of growing weakness, last Friday, Goldman announced 8,000 staff retrenchment comprising 8% of its workforce. b. Shrinking Consumer Spending Uncertain outlook makes consumers wary. Wary consumers spend less. Forecast by Walmart point to structural weaknesses. Weak retail sales are starting to show with no relief signs in sight. c. While King Dollar has lost some shine, it remains strong The US Dollar is enjoying a solid performance in decades. Flight to safety amid a world faced with poly-crisis and compounded by a hawkish fed committed to controlling inflation, the dollar remains king. A strong dollar is not necessarily good news. Rapid dollar ascent has made US goods & services less attractive hurting offshore earnings for the US firms. TECHNICALS FAVOR NIKKEI OVER S&P Notwithstanding the above, S&P is up since October rising nearly 20% to its peak on December 13th and 11% to current levels. However, unlike the Nikkei, the S&P is trading below its 200-day moving average which seemingly is impeding as resistance. S&P fell below its ascending channel suggesting that the rally might have lost steam. INSIGHTS FROM COMMITMENT OF TRADERS REPORT As seen in the CME Commitment of Traders Report, Hedge Fund positions vindicates our outlook for Nikkei and S&P. Over the last 12 weeks, hedge funds have increased their net short positions by 34% in the CME's E-mini Futures and Micro E-mini futures . In sharp contrast, during the same period, these participants have increased their net long positions by 18% in CME Nikkei USD and Yen Futures combined. TRADE CONSTRUCTION Spread trades using futures require equal notional exposures across both legs. With S&P at $3,852, one lot of CME's Micro E-Mini contract provides $19,260 in notional exposure while each CME's Nikkei USD futures contract gives $136,160 exposure. At current levels, equalising notional value requires 7 lots of Micro E-Mini S&P futures for each lot of CME Nikkei Dollar Index Futures . One (1) lot of long Nikkei 225 futures is required to offset against Seven (7) lots of short Micro E-Mini S&P500 futures . Entry: 7.013 Target: 7.402, Potential Profit: $7,783 Stop Loss: 6.776, Potential Loss: $4,177 Reward/Risk Ratio: 1.86 When Nikkei outperforms S&P500, the spread trade delivers positive returns. Outperformance could manifest in one of three ways: (a) Nikkei rises while S&P falls, or (b) Both Nikkei and S&P rise but Nikkei rises more than S&P, or (c) Both Nikkei and S&P fall but Nikkei falls lesser than S&P. If the reverse of these three scenarios occurs, then the spread trade loses money. MARKET DATA CME Real-time Market Data help identify trading set-ups and express market views better. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com DISCLAIMER Trade ideas cited above are for illustration only, as an integral part of a case study to demonstrate the fundamental concepts in risk management under the market scenarios being discussed. They shall not be construed as investment recommendations or advice. Nor are they used to promote any specific products, or services. This material has been published for general education and circulation only. It does not offer or solicit to buy or sell and does not address specific investment or risk management objectives, financial situation, or particular needs of any person. Advice should be sought from a financial advisor regarding the suitability of any investment or risk management product before investing or adopting any investment or hedging strategies. Past performance is not indicative of the future performance. All examples used in this workshop are hypothetical and are used for explanation purposes only. Contents in this material is not investment advice and/or may or may not be the results of actual market experience. Mint Finance does not endorse or shall not be liable for the content of information provided by third parties. Use of and/or reliance on such information is entirely at the reader’s own risk. These materials are not intended for distribution to, or for use by or to be acted on by any person or entity located in any jurisdiction where such distribution, use or action would be contrary to applicable laws or regulations or would subject Mint Finance to any registration or licensing requirement.
CME:NKD1!Long
by mintdotfinance
Echoes of the great recession of 2008An echo of the great recession of 2008 would look easy on this chart and fits nicely with the percentage distance from the 3-year moving average. I think this downturn will be even greater in magnitude and worse in different ways. QQQ at $187 by mid-summer is what I see likely. The Fed and US Treasury need folks begging to justify their next blunder. The weight of reality will be more than can be absolved by fairy tales. Also, chart colors.
NASDAQ:QQQShort
by Scorpions99
BTC accumulation phase spring or a massive bear rally ?Hello, It will be a quick one as the chart says it all. Basically, I think the current setup looks a lot similar to the price action we saw at the end of 2018 and the beginning of 2018. 1. BTC made three consecutive lower lows on the 1-week chart, consolidated for a bit then made a new low which was the final one. We saw the same think happening the 15 months. 2. The RSI hit an oversold area around the same level as the one from 2018 while also printing a bullish divergence for the first time ever for BTC (or at least I could not find any older). 3. Volumes increased above the average between the 3rd and 4rd low on both occasions. 4. The price of BTC hit the long-term diagonal support and used it to rebound on both occasions. 5. BTC broke above the 21-period EMA with a solid green candle back then and now. The time of the green candle that broke above the short-term EMA found the RSI in the exact same state and place on its chart as back in 2019 I think it is quite possible we see a significant rally at least up to the first downtrend correction near $46,800 before a significant pullback. This will be in line with the 2018/2019 rally, also relatively similar in terms of percentage growth. Such a move will be normal in the state of disbelief, but it does not exclude a new low afterwards just like it was the case back in 2019/2020. So the "recession" and "long bear market" scenarios can still come to live. Let me know what you think in the comments
Long
by FutureBlockchain
3
CDSP peaks are a possible lagging indicator of recession startsThe new CDSP numbers are in for the previous quarter (consumer debt as percentage of household disposable income) . Large spike up in consumer debt loads as people are burning through their last cash and borrowing to keep up their life style before the crash. Goldman-Sachs claims that retail has unloaded their positions from the bull run. Thanks to @FXEvolution for the article. DotCom and GFC also had similar spikes. If a recession has already started, then earnings season will be bad. This fact is what can put us on the path to SPX ~3300-3500 What to do: If the CDSP in the future starts to spike down, it may be an indicator that a recession has already started. Check back in 3+ months.
FRED:CDSP
by MayaUndefined
Is the Recession Already Priced in?Hi everyone! 👋 Here’s my video reply to one of the questions asked in my prior video. I wanted to reply to everyone who asked questions, but my video ran way too long. TradingView has a time limit for videos. In this video, I answer the question that @Alt-B asked: How much of the coming recession has the market already priced in? I also show the Mortgage Rate Premium chart. This chart shows how much higher the average 30-year U.S. mortgage rate is than the 30-year U.S. Treasury bond. By comparing mortgage rates to the risk-free rate, we get an idea of how much risk the market is placing on mortgages being issued today. The premium is the highest ever, looking back about 35 years -- even higher now than during the subprime mortgage crisis. I hope you enjoy this video. Feel free to leave a comment below with your own thoughts about the current market. Also, feel free to ask any questions that you’d like me to answer in a future video. I will try my best to answer as many questions as I can. Finally, if you enjoy my videos and want to get updates, be sure to follow my ideas, (I will post reply videos as an update to prior videos). Thank you for your time in watching!
NASDAQ:TSLA
by SpyMasterTrades
39
Here's Why We're Probably Already in a RecessionHi everyone! 👋 This is my first ever video on TradingView . In this video, I explain how a deep dive into the continuing U.S. jobless claims (USCJC) could reveal that a recession is actually already underway. Later in the video, I explain my thoughts about the future direction of the market and why I believe we're entering into a period of stagflation . In this video, I also explain how you can use several tools on TradingView including the Polyline tool, and the Export Data tool (which is accessible by Pro+ and Premium subscribers). Let me know if you find this video to be helpful! Leave a comment below with ideas about what you'd like me to discuss in the future!
AMEX:SPY
by SpyMasterTrades
68