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R.I.P. The S&PAs you can see, History repeats itself. To my technical eye, The S&P is loosing momentum at a price of major resistance AND(+) a Major trend line where price has previously ended its bull rally to return to its overall bear market downtrend. Second possibility attached. I see The S&P returning to the 350's if not much much lower. Its divergent sister, the VIX is showing similar confluence because it is also at a price area of major lows where it has previously reversed overall direction longterm. I see The VIX returning to 34.32.
BLACKBULL:SPX500Short
by CJITM
SPY Analysis (November)This is an analysis of the S&P 500 ETF ( SPY ) for November 2022. Overview The S&P 500 remains in a downtrend. While price bounced off of the 200-week moving average, there is a significant amount of overhead resistance. There has not yet been full backwardation in the VIX term structure that could lend credibility to the idea that a cycle low has been achieved. Cycle lows typically do not occur until after interest rates begin to decline. Therefore, so long as the Federal Reserve continues to raise interest rates, which reduces the supply of money, it is unlikely that the stock market can create new all-time highs. The yield curve has inverted to an extreme degree. A yield curve inversion reflects a contraction in the credit market. Since credit is the main driver of the money supply and economic activity, an inverted yield curve is a warning sign of future economic decline. As the unemployment rate rises and corporate earnings decline, the stock market is likely to face a prolonged period of headwinds. Due to persistent supply issues in a deglobalizing world, commodity inflation is likely to persist even as demand cools, thus creating a difficult situation whereby, for the first time in a half-century, central banks' ability to increase the money supply to stimulate the economy is substantially limited. The global economy is likely entering into a new supercycle where interest rates remain elevated or increase over the long term. This stagflationary environment is likely to stunt the S&P 500's growth prospects for the long term. Companies with negative cash flow and no pathway to profitability are likely to be severely affected. In the worst-case scenario, commodity hyperinflation, debt crises, and a monetary crisis are all possible in the years ahead. Nonetheless, despite deteriorating macroeconomic conditions, plenty of great investment opportunities abound. Bullish post-election seasonality may carry the entire U.S. stock market higher, especially as market participants perceive a pivot in monetary policy. Overnight repo action hint that the Federal Reserve may have already stopped draining liquidity out of the banking system. As the world transitions to sustainable energy, companies that invest in sustainable infrastructure are likely to move substantially higher. Emerging markets, especially India and Latin America, are likely to be beneficiaries of flaring tensions between superpowers. It is during market turmoil that well-planned, risk-managed investments can prove most lucrative in the long term. Market bottoms form when all market participants become bearish and no sellers are left. Quarterly Expected Move There is a 68% chance that SPX will close the year within this price range. High price: 4047 Low price: 3125 For those who do not already know, the quarterly expected move is the predicted range within which price is expected to remain at the close of the current quarter (3-month period). It is calculated using the implied volatility from the asset's options chain after the close of the prior quarter but before the market opens for the current quarter. For more information on how to calculate these values, please see the link at the bottom of this post. Volatility & Seasonality As noted above, there has not yet been complete VIX term structure backwardation. VIX term structure backwardation reflects that the market is pricing in decreasing volatility in the future. The VIX term structure usually goes into complete backwardation at cycle bottoms, as this structure reflects the type of capitulation that major stock market bottoms typically exhibit. The VIX term structure currently shows that the market believes that higher volatility is to come (in 2023). Fibonacci Levels On the daily chart, price bounced at the 50% retracement level (Fibonacci levels drawn from the bottom in October to the most recent high on November 1st). If price can hold the 50% retracement level this shows relative bullishness. Price also continues to cluster around the 3rd Fibonacci spiral that I discussed in my prior posts (see links to related ideas below). Regression Channel Regression simply refers to the idea that price tends to revert back (or regress) to its mean for a given timeframe. Regression channels can help us identify which trend is governing price action. These channels can give insight into trend reversals. Since the start of 2022, the daily regression channel has been downsloping. Price has recently bounced off the mean, despite downward oscillator momentum. This reflects bullishness. Weekly Chart In the below weekly chart, we can see the EMA ribbon has completely inverted. The EMA ribbon is a collection of exponential moving averages that act as resistance when price reaches it from below and support when price reaches it from above. The last time the EMA ribbon completely inverted was during the Great Recession. In general, the farther the S&P 500 falls, the wider the EMA ribbon will get. The wider the EMA ribbon gets, the harder it will be for price to pierce the ribbon and break out to the upside. The significance of this is that a wide and inverted EMA ribbon on the weekly chart makes a sharp V-shaped recovery less likely. This is because when the EMA ribbon is wide, each moving average will individually pose a challenge to price action more so than if all the moving averages are converged at nearly the same level. Although the current situation differs in many ways from the Great Recession. Look below at how similar the weekly charts appear. Another chart that has me concerned about a potential capitulation event is the weekly chart for the tech short derivative chart (SQQQ). As many of you know, when the price of tech stocks in the Nasdaq 100 ETF (QQQ) moves down, SQQQ moves up. SQQQ is an important chart to consider because it reflects the extent to which retail traders are bearish on tech stocks. Right now, SQQQ's chart is particularly precarious and primed for a capitulation event because price fell to then bounced off of converged moving averages. If we zoom out to view the entire price history of SQQQ we can see that its price rarely rises above the weekly EMA ribbon except during capitulation events, thus indicating that we are dealing with unprecedented bearishness of interest-rate-sensitive tech stocks. For the tech bulls to prevail, SQQQ's price must fall below the EMA ribbon. Whereas if a capitulation event occurs, the Nasdaq 100 stocks can experience a rapid and significant decline back down to their pre-pandemic highs, as shown below. This could mean that as a ratio to the money supply, the Nasdaq 100 goes all the way back to the March 2020 bottom, thereby wiping out all the wealth that investing in tech stocks created since the pandemic began. To see why the money supply can be used in this manner, you can check out my post here: Stage of the Economic Cycle Since the 10Y/2Y yield curve remains inverted we are in the late stage of an economic cycle. Below is a chart of how each sector typically performs during this stage. Credit: Fidelity Investments We are most likely in Stage 6 of the economic cycle as shown below because stock, bonds, and commodities have all been declining to some degree in the past several months and because the yield curve is inverted. Once the yield curve inverts, economic contraction will subsequently occur. Although the general trend of all assets is down during Stage 6 there can still be rallies before contraction takes hold. Credit: StockCharts.com Yearly Chart When analyzed on the yearly chart, the S&P 500's current price action looks analogous to the Early 2000s Recession, as shown below. Following the Early 2000s recession, it took over 12 years for the stock market to sustain new all-time highs. Although anything is possible, unfortunately the current situation is looking similar. Bonds This chart is a ratio of the S&P 500 (SPX) relative to the price of iShares 20 Plus Year Treasury Bond ETF (TLT). The regression channel gives us a very interesting piece of insight. It could suggest that the S&P 500 is nowhere near its bottom yet. Since TLT's price drops when bond yields go up, this ratio chart suggests that for the current yield on risk-free long-dated government bonds, the S&P 500 could be way overpriced still. The higher the yields on government bonds rise, the more likely it is that capital will flow out of the stock market and into bonds. As shown below, the higher timeframe oscillators suggest this may be the case. Yield Curve Inversion The current yield curve inversion (as measured as a ratio between the 10-year vs. 2-year U.S. Treasuries) is the most extreme on record. This inversion is flashing a major recession warning. Emerging Markets Here's one investment idea that always works... Please leave a comment if you find an error in my analysis above or if you'd otherwise like to share your thoughts. Thank you. If you'd like to plot the weekly and daily expected moves for SPY on your chart, try the indicator "SPY Expected Move by VIX", which is calculated from the VIX rather than from the implied volatility of the options chain. The quarterly expected moves that I've posted above were calculated using options chain data. If you'd like to learn how to calculate the expected move yourself, this video can help: www.youtube.com
SP:SPX
by SpyMasterTrades
38
SPY Analysis (Mid-to-Late October)Below is an analysis of the S&P 500 ETF ( SPY ) for the period of mid-to-late October 2022. Weekly Expected Move There is a 68% chance that SPY will close the week within this price range. High price: 375.64 Low price: 349.95 There is a 95% chance that SPY will close the week within this price range. High price: 388.48 Low price: 337.10 For those who do not already know, the weekly expected move is the amount that an asset is predicted to increase or decrease from its current price within the current week. It is calculated using the implied volatility from the asset's options chain after the close of the prior week but before the market opens for the current week. For more information on how to calculate these values, please see the link at the bottom of this post. Volatility & Seasonality From a seasonality perspective, October usually opens relatively strong and can continue to be strong until about the middle of the month, then prices typically decline toward the end of the month. See the chart below. There may be increased volatility if the CPI report that comes out before the market opens on Thursday, October 13th surprises again to the upside. My inflation predictors show that inflation moderated in September (year-over-year) and that the inflation figure will be less than the August figure. However, there are early signs that inflation (particularly commodity price inflation) may not decline at the level needed for central banks to pivot away from tightening for some time to come. Until commodity prices stop accelerating higher, there cannot reasonably be a Fed Pivot. If the Fed were to pivot while commodities price inflation was accelerating it could lead to a hyperinflationary outcome. The recent volatility spike put the VIX term structure into partial backwardation. VIX term structure backwardation simply means that the market is pricing in decreasing volatility in the future. The VIX term structure usually goes into complete backwardation at major stock market bottoms, as this structure reflects the type of capitulation that all major stock market bottoms typically exhibit. In late September, the VIX broke the downward-sloping trendline. It's quite possible that there will be a capitulation event in mid- or late-October that causes the VIX to rise back above this downward-sloping trendline and which causes the VIX term structure to go into complete backwardation. If such a capitulation event occurs then it will likely mark the bottom for 2022. Fibonacci Levels Price continues to cluster around the 3rd Fibonacci spiral that I discussed in my prior posts (see links to related ideas below). It is my prediction that a capitulation event will form a lower wick below this line on the yearly candle but that prices will tend to revert back around this level by the year's end such that the yearly candle appears to sit on this line. See below for an illustration. If there is a major capitulation event whereby volatility breaks out and prices break down, I would expect major buyers to come in around the 0.5 level (shown below). The 0.618 level is another support level to watch. Regression Channel Regression simply refers to the idea that price tends to revert back (or regress) to its mean for a given timeframe. Regression channels can help us identify which trend is governing price action. These channels can give insight into trend reversals. Since mid-August, the regression channel on the 1-hour chart has been governing price action (as inferred by such a high Pearson score). Please see below. You can see below that on Friday (October 7th), the price bounced off the mean (red line). Unless we get a highly favorable CPI report this week, I would expect that this channel could continue to govern price action all the way until the start of November. Here's a general sense of what that could look like. Please see below. Weekly Chart In my last SPY Analysis, I noted that my indicators on the weekly chart were suggesting that we could drop back below 388. That definitely happened in the midst of the end-of-September volatility. This time I am seeing something interesting on the 2-week chart... I noticed that the Madrid Ribbon has turned completely red twice. This is very rare in S&P 500 history. To put into perspective how rare this is, there have been recessions where not even this occurs. Therefore, in this regard, the extent and duration of stock market declines that we have already seen have been worse than some past recessions. Unfortunately, though, when this signal presents itself, there is usually more pain ahead. We are in a precarious circumstance with price now below the entire ribbon. Another chart that has me concerned about a potential capitulation event is the 2-day chart for the tech short derivative chart (SQQQ). As many of you well know, when tech stocks fall in price, the price of SQQQ goes up. As the chart above shows, the moving averages on the 2-day chart are nearing a complete crossover. This has never happened before in SQQQ's 12-year history. While only a possibility, this could set the stage for a capitulation event whereby Nasdaq 100 ( QQQ) stocks nosedive back down to their pre-pandemic highs. Without getting too deep into the analysis, this could also mean that as a ratio to the money supply, the Nasdaq 100 goes all the way back to the March 2020 bottom. In future posts, I'll discuss more about the money supply and why it can be used in this manner. Monthly Chart In terms of the monthly chart, as noted above, I do not see the S&P 500 realistically getting much below the 0.5 level in the chart below without some kind of a major price recovery. While anything can happen, if the Fed pivots before the Fed Funds rate has risen above the rate at which commodity prices are inflating, I do believe we can end up in a difficult situation with high inflation again in the future. Yearly Chart When put into the perspective of the entire history of the stock market (going back in 1871), look how high the stock market is currently valued relative to its mean and past price action. In terms of the post-Great Recession bull run, we are hanging on by our fingertips. See below. Below is a closer view. At the close of 2021, the stock market was so overbought (in terms of the Shiller PE ratio) that despite nearly 10 months of selling, stock valuation is still nearly as high as the peak before the Great Depression. The stock market is extremely overvalued because of monetary easing. Monetary easing is a central bank experiment that began in recent decades and was normalized in the years following the Great Recession. The monetary easing experiment has created tremendous reliance on its continuity. Only time will tell how the experiment ends... Please leave a comment if you find an error in my analysis above or if you'd otherwise like to share your constructive thoughts. Thank you. If you'd like to plot the weekly and daily expected moves for SPY on your chart, try the indicator "SPY Expected Move by VIX", which is calculated from the VIX rather than from the implied volatility of the options chain. The expected moves that I've posted above were manually calculated by me using SPY options chain data. If you'd like to learn how to calculate the weekly expected move yourself, this video can help: www.youtube.com
SP:SPX
by SpyMasterTrades
48
Will the market go down or up tommrow ?Will the market go up or down tommrow. What do you think based on chart I cover various stocks which can be profitable based on the stock charts and technical indicators. I try my best to explain as detailed as possible but your feedback is also appreciated Before you enter a trade , one must learn how to master the charts as Stock charts play a big role in deciding when to buy or when not to buy. Technical Trading help in predicting price movements and have a risk management. Stock trading is like any other business and must be taken seriously. Lot of people lose money because they don't educate themselves and end up placing trades blindly which results in big losses Stock charts is the major component day traders, swing traders, core traders use. Times and technology has changed and if you cannot adapt to the new methods , there is a high chance you will be left behind Millions of shares are traded now using desktop , laptop or gadgets and stock charts is what majority of traders look at. So , if you want to be a daytrader , swingtrader or coretrader learn how to read and interpret charts. There are lot of great books out there like Thomas Bulkowski's Encyclopedia of chart patterns and Steve Nison Japanese Candlesticks interpretation Having someone experienced can also cut the learning curve time for a new trader. Trading does take time and with discipline , hardwork , dedication and most importantly Passion for this needs to be there.
AMEX:SPYShort
by Composed_Trader
$SPY Can we go higher?Hi Traders - It's been a while since my last post and I figured I share this one with you guys. In the chart, I lay out the two most likely scenarios on each side of the trade. Personally, I believe there will be upward pressure here, because of the sheer amount of upside. However , we will have to see the overnight price action and pre-market before making an accurate judgement on which way we will move. Sincerely, Mike (UPRIGHT Trading) **PLEASE NOTE: the indicators at the bottom are for analysis**
AMEX:SPY
by UPRIGHTTrading
5
SPY: Very bearish! What could make it bounce?• So far, SPY is heading to the next support at $360.69, indicating we have a few more bucks to drop, and there’s no technical evidence pointing to a reversal. In the daily chart, at least, there’s not a single bullish pattern yet; • We see some open gaps (yellow squares), and they will become targets, in the future, if (and only if) SPY triggers a reaction; • In the 1h chart we see a possible bullish structure, a Double Bottom chart pattern. Keep in mind, this pattern wasn’t triggered yet, and maybe SPY won’t trigger it at all, but it is important to keep in mind a scenario where it’ll break the $370.21; • By triggering this Double Bottom, SPY would bounce back up to the $388 (its next target); • In my view, I would prefer to see it bouncing after a retest of the $360, but this could work too; • This wouldn’t be a true bullish reversal sign, and maybe would be just a Dead Cat Bounce, but could be the beginning of a true mid-term reversal. I’ll keep you guys posted on this. Remember to follow me for more analysis like this! Keep in touch.
AMEX:SPY
by Nathan_The_Finance_Hydra
10
SPY S&P 500 September is historically the worst month for stocksTwo months have delivered an average negative return for stocks since 1945: February and September, the latter being the worst. Economic context: Russia will not restart gas supplies to Europe through a key pipeline until western sanctions are lifted. OPEC+ unexpectedly decided to cut output in October by 100,000 barrels a day. August 2022 CPI data are scheduled to be released on September 13, 2022. Fed’s next scheduled monetary policy meeting takes place on September 20-21. Depending on how inflation is trending and how the jobs markets and overall economy is looking we expect a Fed Rate Decisions of 50bps or 75bps hike. The crypto market context is not good either. Ethereum network’s security and performance could be negatively impacted by the upcoming Merge. Taking into consideration the information above, my price target for the SPY ETF is $374. Looking forward to read your opinion about it.
AMEX:SPYShort
by TopgOptions
4