SPY long day bearish on dailyAwesome long day bearish with gap and go. Trying to catch a retracement. Probably wave 5 down.
Spyshort
SPY monthly bearish hammerWon't hold long, probably going lover to wave 5 for September. Be ready to exit quick. Love how long day bullish candle lower volume than bearish. Looks like sellers were resting in August.
SPY Analysis: Mid September 2022This is an analysis of the S&P 500 ETF ( SPY ) for the period of September 12th through September 16th.
Weekly Expected Move
There is a 68% chance that SPY will close the week within this price range:
High price: 416.90
Low price: 396.30
There is a 95% chance that SPY will close the week within this price range:
High price: 427.20
Low price: 386.00
For those who do not already know, the weekly expected move is the amount that an asset is expected to move from the close of the prior week until the close of 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 opening of the current week. For more information on how to calculate these values, see the link at the bottom of this post.
Volatility & Seasonality
Historically, volatility typically remains subdued from about the 5th trading day of September until around the 12th trading day of September (September 19th) at which point volatility spikes substantially going into early October, as the chart below shows.
This year, the 12th trading day of September happens to coincide with quadruple witching on Friday, September 16th. There is a particularly high chance that the market will become volatile from around that time into early October.
There may also be increased volatility if the CPI report that comes out before the market opens on Tuesday, September 13th surprises to the upside. Although inflation is subsiding, I will note that the consensus prediction is higher than the Fed's prediction. In my post about the Fed pivot, I noted that we can extrapolate from the overnight reverse repurchase operations that the inflation rate may be around 8.3%, which is higher than consensus. I also note in that post that inflation is likely to continue to subside modestly in the coming months. See the link below to my post to understand how I reached that prediction.
Of note, even though we had one of the worst first 6 months of the year in stock market history, there has still not been backwardation in the VIX term structure. VIX term structure backwardation simply means that the market is pricing in decreasing volatility in the future. This is concerning because VIX term structure backwardation is a characteristic of virtually all major stock market bottoms, as it reflects the type of capitulation that major stock market bottoms typically exhibit.
Fibonacci Levels
Price found support last week almost exactly at the golden ratio (0.618) using the June bottom and the peak in mid-August. This is generally bullish as it reflects a fairly typical retracement. See below chart.
At the close of last week, the 4-hour chart became overextended and printed a bearish reversal candle right at the EMA ribbon. The stochastics are overextended as well. Thus, there is a chance that price may either consolidate or reverse to the downside for the short term.
If SPY overcomes the EMA ribbon on the 4-hour chart, it is likely to face significant resistance at the Fibonacci level around the 415, as shown below. This level also resisted price in late May and early June.
Regression Channel
Regression simply refers to the idea that price tends to revert back to its mean (or average) for a given timeframe. Regression channels can help us identify which trend is governing price action. These channels can give insight into trend reversals.
In my SPY analysis for the end of August, I posted the below regression channel.
I indicated that the June-August rally is no longer governing price movement and that price is regressing to the mean of the larger bear market channel (red line of the longer channel). Indeed, price reverted precisely to that line, as shown below.
What this means is that the larger bear market downtrend is still intact and is governing price action.
As many market participants know, our pathway to breaking this bear market will involve one or both of the following:
(1) CPI reports continue to surprise to the downside;
(2) The market begins to price in a Fed pivot (the Eurodollar Futures will provide insight after quad witching on Friday, September 16th).
Weekly Chart
The weekly chart shows that the bear market continues unabated. In the below weekly chart, I placed the EMA ribbon (yellow and orange lines) on the chart to show that it continues to resist price downward. This is the longest period of time that the S&P 500 has been resisted by the weekly EMA ribbon since the Great Recession.
In the below chart, I added the WaveTrend indicator. Do you notice the two teal/light blue shaded weekly candles?
These represent bearish crossovers. They suggest that further downside is likely.
Based on my research, when two weekly bearish crossovers occur on the WaveTrend indicator while price is consistently being resisted by the weekly EMA ribbon, further downside occurs before a bull run. Specifically, at minimum, price drops below the low of the week in which the second bearish crossover occurred before a sustained bull rally occurs. In other words, we can expect that SPY could drop below 388 before a sustained bull rally occurs. This is not a perfect indicator, but it's quite plausible.
On the flip side, there is a major positive sign in the weekly chart. Specifically, there is a possible formation of a reverse head and shoulders as illustrated below. As you know, a reverse head and shoulders pattern is bullish and the measured move up is generally the distance from the bottom to the neckline.
Monthly Chart
The monthly chart continues to undergo a bottoming process. Price is being supported by the EMA ribbon and the WaveTrend indicator is trying to build a significant bullish crossover (the third most significant bullish crossover on the monthly chart in SPY's history -- the SPY ETF was created in the 1990s). If the Fed pivots by October, then I would expect the close of November will give us a formal bullish crossover. Until then, there's room for caputilation-type candles to continue.
Stage of the Economic Cycle: Late Stage
(Stages are early, mid, late and recession)
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
While the monthly chart suggests a bottoming formation that can lead to a rally in the 4th quarter of 2022 into the 1st quarter of 2023, the yearly chart is much more bearish.
Below is a regression channel that I created of the entire stock market history dating back to 1871. It helps us measure and compare every major market top and bottom in history.
Below is a closer view.
To put things in perspective, the June 2022 bottom was the same standard deviation from the mean as the Great Depression peak. The stock market is so overvalued from a historical perspective, that we had to undergo one of the worst first 6 months in stock market history just to get down to a level that is roughly as overvalued as the Great Depression peak.
The Shiller PE Ratio confirms this scope of overvaluation, as shown below.
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. Today, the amount of assets on central banks' balance sheets due to monetary easing is unprecedented in the past 322 years for which reliable data exist. The monetary easing experiment has created tremendous reliance on its continuity. Under the surface cracks are beginning to appear, as indicated in the chart below, which shows the impending rise in cost to the U.S. federal government to finance its debt in the future.
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 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
GOOG shortGOOG chart not looking so hot.
Likely to make new lows in a nasty sell-off. Bear flag is clear as day. Really hoping to see it play out, so I can buy some really cheap google!
BEST BULLISH SET UP OF THE WEEKStumbled upon the U chart and I see some possible magic. Clearly has gotten obliterated even more than the overall market. What I don't
like about the chart is that the price is currently under IPO price which is always a red flag. I am not sure what kind of BS has been going on since their IPO but I'm looking strictly at technicals. What I love about the chart VOLUME VOLUME VOLUME that's what I want to see as a bull. Appears to be some clear-cut textbook accumulation complete with a nice retest. That green doji to end the week is sexy. If it opens red tomorrow or turns red this is the play of the week IMO especially if the rest of the market is holding up. As always not financial advice just some opinions.
$SPY PutsHmmm does SPY go down that far? I hope not but we shall see starting next week (9-12-22 to 9-16-22)
SPX/SPY Fib Retracement Key Levels I've been watching SPX/SPY very closely to see which direction it decides to go through the rest of the year. We are at a VERY IMPORTANT range. Initially the top trend line acted as resistance and short bias looked to be validated with the reject of the 0.681 golden zone. You can see a bounce off the shorter term long bias 0.681 retracement almost perfectly from this years low. Short term long needs to hold 0.618 for us to see retest of highs trend line. This will be the best entry point for short position into the rest of the year as a retest to break out of channel is going to likely reject. Ultimately SHORT bias long term , potentially LONG bias short term .
Short Term PT $420
Long Term PT $334
$SPY 1D Outlook$SPY 1D is displaying relative weakness after rejecting the 0.5 retracement level at 401.38. If bulls fail to reclaim that level and bears successfully close a daily candle below 389.87 (0.236 weekly retracement) then we would expect to see selling pressure increase and possibly sweep the lows again. Monitoring it closely along with movement in oil prices heading into September's FOMC meeting towards the end of the month.
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.
US500 shortWe are in a recession, although the white house changed the definition of a recession when they released the second negative gdp quarter stats. Is this the key level where we will see a sell off?
I’m going short around 4330/4350
Looking for price to come back down to 3300/3000
Entry pure technical analysis come back to touch top of a channel in a lower time frame down trend.
This is only the beginning.
2X $SPY 2008 FELL ALMOST 55% (HISTORY REPEATS ITSELF!)in 20008, the market crash was a pivotal part of the US economy and History. We see almost the exact same setup occurring now in 2022. Prepare for a recession and it is time for PUT SZN!!!
SPY Analysis: End of AugustThis is a daily chart of the S&P 500 ETF (SPY) with its weekly expected move plotted for August 29th through September 2nd.
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, based on the level of implied volatility as calculated from the asset's options chain after the close of the prior week but before the opening of the current week. Assuming the asset's price is normally distributed from its mean, there is approximately a 68% chance that the asset's price will close the week within the range of the weekly expected move .
With this said here is my latest SPY analysis:
Set Up Score : 1 out of 10
This score measures the likelihood of a bullish breakout. A score of 0 suggests a very low chance of a bullish breakout and a score of 10 suggests an extremely high chance of a bullish breakout. Currently, the score is 1, which is very low. Therefore, the risk-to-reward is against opening new long positions at this time. One should wait for consolidation to enter long positions.
Weekly Expected Move :
As noted above, there is a 68% chance that the week will close within this price range.
High price: 416.23
Low price: 394.39
Volatility :
The potential for increased volatility remains high. As you can see below, the VIX broke above the weekly EMA ribbon and its Stochastic RSI shows that it has only just begun its oscillation upward.
How high is the VIX likely to go? If the resistance trendlines shown in the chart below continue to hold, then the VIX should begin to retreat once it hits the 30s.
If the weekly candle closes well above 30 then it's likely that we will see yet even more volatility and the June bottom will become vulnerable.
With this said, increased volatility is what we expect this time of year from a seasonality perspective.
Seasonality :
The August to October timeframe typically sees increased volatility.
The S&P 500 usually declines into the close of August relative to its peak in mid-August.
Therefore, in the midst of all the selling that may or may not happen this week, keep in mind that selling is typical for this time of year.
Fibonacci levels :
Price is retracing the bull run from the June low to the mid-August high. Last week closed almost exactly at the golden ratio (0.618) of this move.
The next Fibonacci level below is 396.95 and it is not too far from the bottom range of the weekly expected move (394.39). So these levels could act synergistically to potentially support price, should it fall down to this level.
Regression :
Below are two regression channels that I fitted to the data in a manner that maximized the Pearson scores, and in a manner to reflect both the bear market downtrend and the rally from the June bottom. Regression channels simply help us determine where price is moving relative to its mean or average.
It appears that the June rally is no longer governing price movement and that price is regressing to the mean of the larger bear market downtrend. If price falls to the bear market regression channel mean, I would expect it to find some degree of support at that level.
Weekly Chart :
The weekly chart shows that price continues to retrace downward following a bearish inverted hammer that formed when price hit the Ichimoku Cloud.
Subsequently, price fell below the EMA ribbon - this is bearish.
Therefore, both the weekly EMA ribbon and the weekly Ichimoku Cloud continue to act as resistance to SPY.
As you can see above, now price has fallen below the EMA ribbon while the Stochastic RSI is oscillating down. This is also bearish.
A rare event occurred in early August whereby the K value of the Stochastic RSI reached its maximum value of 100 while price was still not above the weekly EMA ribbon. This rare event typically occurs during economic recessions, but has been also been identified during the recovery stage of market crashes outside the context of recessions (e.g. following Black Monday in 1987).
Monthly Chart :
The below monthly chart shows an inverted hammer candle in which price was pushed right back down to the EMA ribbon.
Inverted hammers after significant selling are actually signs of a bullish reversal. They represent the capitulation phase of the bottoming process. Whenever a candlestick forms a long upper wick after there has been a significant sell off but also after the stochastics have started to oscillate back up, this reflects selling into any signs of strength. The market participants who sell or short into any signs of strength need to exit before a sustained bull run ensues. Since this is still occurring in the candlestick for August, this means that more time (more months) must elapse before a major sustained bull rally is likely to emerge.
Yearly Chart :
Although the yearly candle is not completed, the chart shows that we are precariously sitting on the third Fibonacci extension of the Great Depression high. The Stochastic RSI shows a bearish cross of the K line and D line.
For more details about why this concerns me, you can view the below post for my long term projections.
Stage of the Economic Cycle : Late Stage
(Stages are early, mid, late and recession)
Since the 10Y/2Y yield curve is currently 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
For my thoughts on the coming recession you can view my post here:
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.
Adjusted for inflation trendlineIn a philosophical way the money is a measure of value and all its quantity represents the resources from beneath the ground that are constantly being dug each day of our lives. Deluting the quantity of the currency supply does not change the value of every rare earth which came out of the ground to construct our physical world or the nutrients which fuel our productivity as facilitators of the constant digging process. Adjusting for the inflation even though its never 100% accurate gives us an idea where we are and where we are heading from the most fundamental perspective. Inflation can deceive, just like everybody who bought the 2000 bubble top thought they are at breakeven 8 years later.
BOUNCE TIME (CHECK MY HISTORY)SPY has been getting absolutely shellacked as I predicted. Closed a bunch of my shorts now I am adding some short term longs. Now SPY has approached a key support level at 390. You can see in the past couple months 390 has acted as support and resistance. Now its time to do its job as support. As you can see I don't expect much of a rally but am expecting a short lived rally. That is when I will begin adding back to the short side. Not financial advice just my opinion.
Fall wedge, will determine our pathFrom what I’m i’m able to see we are in a falling wedge which hypothetically we could see a bounce off the Fibonacci level and go up from here, however I think there’s an overall Barris sentiment in the economy and I think will break out of this wedge and fall down further. The next buying zone is charted out. In the short term I might expect some bouncing around the wedge. Ultimately I think we’re going to test previous levels. With some hope we will form a double bottom and make our way back up.
2X $SPY TP1 HIT! (SELLS FROM TRENDLINE)ON AUG.17th, I sent out the signal for spy to reject the trendline and fall more than 5%! The move was more than 5% and still running. On the 1HR there is a falling wedge, and it has broken out with a fake breakout, we will look to see if there is a retest then we could see a pullback to the $405 area. However, due to the volatility and speculation I am still heavily bearish!
SPY shedding some points : Target ~$319SPY shedding some points : Target ~$319
Predicting some trend analysis where SPY can test the previous lows and jump from 319 again
New bearish trend while respecting the fib?We might not have enough data to support a new trend line, but we have overall weakness in the economy. I think CPI is going to be about the same or slight beat, best case scenario.
I think the SPY will bounce off the fib come down to this $398/399 level, and either rug bull or begin a new bullish trend. I think we are looking at a bearish trend until $377 where we enter a strong buy zone.
SPY NOT LOOKING GOOD WATCH THIS AREA🔸️Ticker Symbol: SPY🔸️Timeframe: 4 Hour🔸️Investment Strategy: Short
TECHNICAL ANALYSIS: SPY on the daily timeframe is suggesting we could see a further push to the downside. Money is currently flowing out of the market; we have a red sell signal illuminated and our middle band on the bottom dashboard is flashing red meaning bear market momentum. The first major level of support is around $390 followed by $380 if we stay in this bearish trading pattern. Thanks for following!
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$SPX Daily - Rockin' the Casbah 2023$SPX Trade Idea into 2023. Now the king told the boogie men, You have to let that raga drop. Rockin' the Casbah, rock the Casbah.🎶
TP - $3441.04
Longterm Outlook SPYI am taking a more long-term look at where I see the index and at what prices I think would be too good an opportunity to pass up given the future interest rate hikes and unknowns with regards to oil prices & supply chains.
I personally feel the 325-350 range represents a good outlook on the economy overall. It would represent an acknowledgement of the problems caused by the pandemic and its related fallout. It is a humbling but optimistic figure.
I think it is very reasonable to expect buyers to support this valuation and it is a good place to look for long opportunities.
The 297-266 range represents an increasing amount of pessimism. I think it will take at least 3 negative quarters of GDP maybe 4 for us to enter this range. I would look to this range depending on how earnings reports look in the coming months.
Just my humble thoughts.
COSTCO STRONG SELLCostco appears to be forming a huge H&S on weekly. While I hadn't really paid much attention to Costco I did see it mentioned yesterday which caused me to take a look. Want to note that Costco has performed strong relative to the market and that's why I like it for a short. This recent rally over the past couple of months is leaving a lot of meat on the bone for a short IMO. As you can see the past couple years have been quite the run up. Unfortunately if we are going into a bear market even the best performing stocks are liable to pull back significantly. I think we are a long way from ATHs and I expect to Costco to at least hit the first three targets within the coming months. Taking some profits today on some other shorter swing shorts and hopeful Monday Costco opens green so I that I can begin scaling in a position. Thoughts? Disagree? Feedback welcomed and appreciated! NOT FINANCIAL ADVISE ALL MY OPINION
Comparing the S&P500 in the 2008 GFC with 2022Hey friends,
Enjoy this fractal based analysis of the stock market comparing now and 2008. I drew this fractal about a month ago and so far it has been following it perfectly. Let's see how we go.
✌️ Seb
