Market to suck in die-hard bulls before abrupt reversal?Finally, the SPX rebounded to the level we initially expected it to reach (outlined last Friday). This move was accompanied by a bullish reversal in RSI, MACD, and Stochastic on the daily chart. To support a continuation higher, we want to see these indicators continue to develop bullish structures. However, to support a thesis that this is merely a correction of a prolonged downtrend that began in late July 2023, we would want to see RSI peak below 70 points (which is very common for downtrend corrections). In addition to that, we would like to see MACD fail to break above the midpoint.
As for our stance, we continue to wait on the sidelines (for short re-entry if the situation develops as expected). However, at the moment, we still do not feel comfortable to take action. The SPX might continue higher, potentially to the level where it sucks in bulls who start predicting new all-time highs and soft landing, just before an abrupt reversal. If we were to think of such a level, it would be somewhere near $4,450 (coinciding with the breakout above the sloping resistance). Though this is, of course, only a speculation at this point. It is not warranted the market will rebound as high (especially as yesterday’s candle looks somewhat exhausted). Therefore, for minor clues, we will pay close attention to the price’s ability to hold above the 20-day SMA and Resistance 1; a failure to stay above these levels will raise our suspicion and potentially signal a loss of upside momentum.
Illustration 1.01
Illustration 1.01 displays the daily chart of BTCUSD and two simple moving averages. The 20-day SMA acts as a support. If the price fails to hold above this level, it will be slightly bearish and raise our suspicion.
Technical analysis gauge
Daily time frame = Slightly bullish
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.
Standardandpoor500
S&P500: Bearish as long as the Megaphone holds.Bullish if brokenS&P500 hit the 4,375 target of our last signal (chart at the end) and turned neutral on the 1D technical timeframe (RSI = 54.575, MACD = -15.020, ADX = 40.128). The rise is now approaching the 1D MA50, over which the new top was formed before on the LH of the Bearish Megaphone. We will wait for the top and short, aiming at the 0.5 Fibonacci retracement (TP = 4,325) as it happened with the September 7th pull back. If the price crosses over the LH, we will wait to buy on the first pull back near the 1D MA50 and target July's High (TP = 4,600).
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S&P500 The 4hour MA50 supported, +4000 incoming.S&P500 / US500 opened lower today but managed to hold the 4hour MA50 as its Support and is having a big boost intra day.
It is not impossible to see one final pull back under the 4hour MA50 again as on August 24th but it's confirmed that this new bullish leg of the Bearish Megaphone is in full motion.
Buy and target 4440 (under the 0.786 Fibonacci and top of Megaphone).
Previous chart:
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Prolonged period of selling ahead?Last Thursday, we highlighted a rally in the Chinese stock market, with the Hang Seng Index rising as much as 3%. In addition to that, we speculated about the potential relief in SPX, with emphasis on resistance near $4,335 (which failed to be taken out). Today, we want to draw attention to Chinese stocks again. The Hang Send Index fell approximately 3% overnight, erasing last week’s attempt to move higher. Besides that, we are starting to notice gold and the U.S. dollar behaving similarly to last year during an extended period of selling pressure (when gold was moving lower with stocks and the U.S. dollar was strengthening). In our opinion, the environment is changing, and we could be in for a resumption of a prolonged selling period (potentially transposing to a market crash).
We maintain the view that we have seen one of the most deceitful bear market rallies in stocks and cryptocurrencies over the past year. Interestingly, during that time, many people began to relax their stances in expectation of a soft landing. However, we have been skeptical about the FED’s ability to deliver one for a while. In fact, we have been more inclined toward a scenario with the U.S. economy sliding into recession, which continues to be the case. In the coming weeks, we will pay close attention to unemployment, which will pretty much guarantee recession if it rises another 0.6% (considering the fact that each 1% rise in unemployment coincided with a recession since the 1940s). On top of that, we will observe the situation in the real estate segment and the performance of the manufacturing and services sectors.
As for technicals on the daily chart, we will watch DM+ and DM-, which we want to see diverging, with ADX rising simultaneously (suggesting a bearish trend is growing in strength). Furthermore, we will also look at RSI, MACD, and Stochastic, which we want to see pointing to the downside (their reversal to the upside will be bullish). In regard to price levels, we will pay close attention to support near $4.261 and resistance near $4,335.
Technical analysis gauge
Daily time frame = Bearish
Weekly time frame = 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 Bottom of the Megaphone. Buy over the MA50 (4h).S&P500 is trading inside a Falling Megaphone pattern, having completed 20 days under the MA50 (4h).
That is the buy break out signal, as it was on the previous bullish leg of the Megaphone.
The price hit the MA200 (1d) and bounced. Bullish signal so far.
Trading Plan:
1. Buy when the price closes over the MA50 (4h).
Targets:
1. 4400 (between the 0.786 Fibonacci level and the MA200 (4h)).
Tips:
1. The RSI (4h) is trading inside a Falling Wedge of its own. Take profit if its Falling Resistance gets hit before the 4400 target.
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Notes:
Past trading plan:
S&P500 targeting 5800 based on this overlooked pattern?The S&P500 index / US500 is testing the Rising Support of Higher Lows this week, stemming directly from the bottom of the 2022 correction.
A symmetric Support is just underneath and this pattern has various (dashed or bold) stemming from the Bear Cycle.
What many may fail to see though is a giant Inverse Head and Shoulders pattern that is forming the Right Shoulder.
If that's the case, then S&P can target the Fibonacci 2.0 level at 5800 as early as mid 2025!
Too much to ask??
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S&P500 Will the 1week MA50 and Fib 0.5 hold? 2008 and 2000 show The S&P500 / US500 opened yet another week on red. Last week it closed on a 3 week red streak and is approaching the 1week MA50 and MA100 as well as the Fibonacci 0.5 level.
The Fib 0.5 and 1week MA50 in particular are of high importance as they are what seperated the 2022 stock market correction from the heavy Bear Cycles of 2008 and 2000.
As you can see both the mortgage crisis and dotcom bubble after they crossed under the 1week MA200 and rebounded, they got rejected on the 1week MA50 / Fib 0.5 Resistance cluster and didn't give the extension that we have in 2023 so far.
Often when a Resistance level breaks, the market tends to test it as a Support in order to discover demand momentum. Do you think they will hold?
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Getting closer to support zoneThis market is horrible. Still holding my long position and selling calls but when it looks that bulls are jumping in sellers show up and erase all gains. Fortunately the index is approaching to a strong support zone 415 - 410. I'm hang in there, trusting that support will hold, at least a few weeks. I won't open any long positions for now until I see a couple of big fat weekly green candles.
S&P500: Balance sheet extends drop.Will interest rate peak soon?The S&P500 has been declining for more than two months straight reaching the HL trendline from the market bottom. It is useful to look into the Fed's role on this whole long term price action and what better timeframe to use than the 1W.
As you can see, the Fed's Balance Sheet (orange) is extending a long term decline that started more than one year ago, while the Interest Rate (teal) continues to rise. You don't need to go back any further than the 2018-2019 period, which was marked by the extensive trade wars between the U.S. and China. The key to recovery was when the Interes Rate peaked and flatlined. That was when the stock market bottomed and growth stability returned to the markets.
The recent (almost) two year inflation crisis has the market in an even more advantageous position as it's been one year since it recovered and priced the bottom, despite the fact that the Interest Rate is still rising. Theoretically when the Interest Rate peaks and turns flat, we should see a more stable stock market growth.
With the S&P500 on a HL support and the Balance sheet still dropping, do you think the Fed will pull the trigger and soon announce in one of their next meetings an end to rate hikes?
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S&P500 Do or die moment for the bullish trend.The S&P500 / US500 is approaching the 1day MA200 (intact since March 24th) and its 1day RSI just become oversold for the first time since September 27th 2022 (exactly 1 year ago!).
That time was the begining of the Bear Cycle's bottom formation.
Additionally, we are at the bottom of the Channel Up pattern that started after the September 2022 bottom, so it is easy to understand that it is now or never if the bullish trend is to be sustained.
Buy on the current market price and target 4820, which is the All Time High of January 2022 and slightly under the 1.618 Fibonacci extension (targeted on prior rally).
This approach is negated if the price closes a 1day candle under the MA200.
Previous chart:
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Stock market crash looming over?Last week, the FED meeting resulted in no rate hike. However, Jerome Powell reiterated the central bank’s commitment to fight inflation, with dot plots showing the possibility of one more rate hike this year and interest rates staying elevated for at least another two years. That is no surprise to us as we have been warning for months about interest rates going higher and staying there. In addition to that, since late last year, we have been warning about the most deceitful bear market rally in cryptocurrencies and stocks as well.
Since then, we have seen a very uneven recovery, with the major indices like SPX and Nasdaq being propelled higher by a handful of companies while Russell and small caps were staying far behind in the recovery process. Furthermore, earlier this year, a big case was made out of the Chinese reopening of the economy after the Covid-19 pandemic. Back then, we remarked how much would depend on the performance of the Chinese economy and that its slowdown could inadvertently endanger the U.S. stock market and bring recession to the West. Then, in August 2023, we issued another warning about the Chinese stock market rolling over, signaling trouble for the U.S. markets.
Fast forward to today, and we have seen a failure of the Chinese indices to advance higher despite attempts by regulators to calm down the market, and in the U.S., personal savings declined, credit use soared and inflation reaccelerated. Furthermore, commercial bank deposits resumed a decline, and delinquencies on credit card loans started to soar rapidly. As for the narrative in the media, the widely accepted opinion is still that the U.S. economy is headed for a soft landing. But, we remain very skeptical about the FED’s ability to deliver one. In our view, many signs point to the more harsh scenario, with the environment increasingly favoring a significant market selloff.
Illustration 1.01
Illustration 1.01 shows the chart of the delinquency rate on credit card loans, which doubled in the last year and a half.
Illustration 1.02
The picture above displays the daily chart of SPX. The yellow arrow indicates a bearish breakout, which marked a new low for the index since 27th July 2023.
Technical analysis gauge
Daily time frame = Bearish
Weekly time frame = 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.
Reverse SPYHard to say what will happen next. We could see a false break out of the 430 level, or hit the 415 and then a violent rejection like it did before. But just by seeing the way it closed the past week, at least is going to try to break the 430 level, I expect more volatility that's why I protected my long positions selling covered calls. I'm not sure about a market crash yet, I'm not planning to go too short in the upcoming days.
S&P500 Crazy as it may seem, we may see 9000 by the end of 2026!S&P500 / US100 is having a strong correction these past two months (August-September).
However on the wider scales such as the 1week time frame this is only a minor technical correction.
It is near forming a 1week MA50-100 Bullish Cross. Last time it formed this pattern was in September 2016 and the index never broke under either MA level. It went on to peak near the 3.0 Fibonacci extension.
Similar peak (Fib 3.0) and Channel Up leading to it (of course we can't count the COVID crash into it) on the December 2021 top.
The RSI pattern between now and 2016 is similar as well.
Based on the above and crazy as it may sound, it is a technical possibility to see the Channel Up that started in late 2022, extend into the end of 2026 and price a top near 9,000.
Previous chart:
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S&P Could find support here Following a notable correction, the S&P index may find support at its current level, particularly if the lower boundary of the green box at 4,350 holds. In the event of a successful hold, we could potentially witness a rally towards the initial target of 4,410. Subsequently, after a consolidation phase, a further move towards a level around 4,440 could be in the cards.
However, it's crucial to be aware that should the support within the green box fail, we may witness a decline towards the 4,300 mark.
S&P500: Near the bottom. Recovery should start early October.S&P500 is trading on a descending channel, on a very bearish 1D technical outlook (RSI = 36.220, MACD = -31.420, ADX = 38.889). The 1D RSI is on the same level as the August 17th bottom of this Channel Down. This decline is approaching a Triple Support Band: the 1D MA200 and the 1W MA50 which are headed directly for the bottom of the Channel Up that started exactly a year ago.
We expect the bottom to be formed inside these two weeks and early next month to see the first signs of recovery. A Cup recovery pattern has been the common mode of rise these past 12 months, so we set a R1 target (TP = 4,600) for mid to end of November.
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S&P500 Confirmed sell as it crossed the MA100 (1d).The S&P500 index crossed today under the MA100 (1d) for the first time since March 28th.
Since October 2022, the pattern is a Channel Up and the current decline since the July 27th top still has room to fall before it hits the pattern's bottom.
Trading Plan:
1. Sell on the current market price.
Targets:
1. 4250 (bottom of the Channel Up and potential contact with the MA200 (1d)).
Tips:
1. The bottom's of the long term Channel Up have beem formed when the RSI (1d) completed Lower Lows near or under the 30.00 level. Be ready to book the profit if you see a rebound after the RSI makes a Lower Low.
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Notes:
Past trading plan:
SPX, Major H-S-Formation To Crucial Reversal!Hello,
Welcome to this analysis about the SPX and the daily timeframe perspectives. In recent times many indices within the market already showed up with precarious pullbacks in the structure that should not be underestimated so also the SPX. As when looking at my chart we can watch there how the Index is forming this major decisive head-shoulder-formation with the left shoulder and the head already completed. Now as the right shoulder develops in the structure this is a likely setup for the completion of this whole formation which will happen when the SPX finally breaks down below the neckline as it is shown in my chart. Such a setup will be the finalization of the whole head-shoulder-formation and the SPX is likely to follow up with a bearish continuation till reaching out to the 4.380 zone from where the situation needs to be elevated again. If the SPX in this case does not hold this level and do not shows up with a reversal in the structure the possibility of a continuation-setup increases in which the SPX will form a bear-flag or similar continuation formation. If this completes a continuation will move on within the bearish-continuation-zone marked in my chart in red. Currently we should not keep these determinations from the desk and be prepared on upcoming volatilities, it will be an important journey ahead.
In this manner, thank you for watching the analysis, it will be great when you support it with a like, follow and comment for more upcoming market analysis, all the best!
"The high destiny of the market is to explicate, rather than to speculate."
Information provided is only educational and should not be used to take action in the markets.
S&P500: Channel Down bottom and HL Support cluster. Buy?S&P500 hit today the HL trendline from the August 18th Low, while approaching the bottom of the Channel Down pattern. Despite this short term weakness, the 1D timeframe remains on neutral technicals (RSI = 46.932, MACD = 8.582, ADX = 32.119). This indicates that it may be an opportunity for sideways trading until we see a clear long term trend.
Consequently, we are buyers on this level, expecting a rebound to the top of the Channel Down and the 0.786 Fibonacci level (TP = 4,490).
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S&P 500, Ascending-Wedge-Formation, Crucial Determination!Hello,
Welcome to this analysis about the SPX 500 index and the 2-hour timeframe perspective. In recent times the index moved into a crucial determination as it is already overbought on the higher timeframes I also detected this main formation here that is likely to indicate a decisive reversal in this whole structure. Therefore as when looking at my chart, we can watch there how the Index is building this main ascending-wedge-formation marked with the boundaries in black and the coherent wave-count within. In the ascending-wedge the Index has already completed the waves A to C and is now about to complete the wave-D on which the wave-E follows up, when this wave-E has been completed in the upper resistance-cluster marked in red this will be the setup for this whole wedge-formation to complete which will happen with a pullback and when the Index then finally marked below the lower boundary of the wedge it will be the origin for further bearish continuations to the downside and appointing of the lower target zone between the 4525 and 4540 zones, once this has been reached it has to be elevated if the S&P 500 manages to reverse in the structure or just sets up for further continuations to the downside.
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"The high destiny of the market is to explicate, rather than to speculate."
Information provided is only educational and should not be used to take action in the markets.
The relief fizzles outThis week, we saw SPX move slightly lower. In addition to that, VIX gapped up on Tuesday and continued to move higher without filling the gap. Meanwhile, the relief fizzled out in China, leading to a rollover in the stock market indices like CSI 300 and Hang Seng. Considering American and Chinese markets are highly intertwined, we raise a word of caution over more weakness in the U.S. market.
Illustration 1.01
Illustration 1.01 shows the daily chart of VIX. The yellow arrow indicates an opening gap on Tuesday.
Illustration 1.02
Illustration 1.02 displays the daily chart of CSI 300. The yellow arrow indicates the initial spike after the regulator’s intervention in the market about two weeks ago.
Technical analysis gauge
Daily time frame = Neutral
Weekly time frame = Neutral
*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: Last chance to hold this level and rise.S&P500 has turned neutral on the 1D timeframe (RSI = 46.008, MACD = 1.700, ADX = 33.340) after today's 1D candle crossed under the 1D MA50. To make matters worse, the 1D MACD is reversing and if the price doesn't rise, it will form the first Bearish Cross on such low level since June 10th 2022.
On the brightside, the 0.382 Fibonacci level is still holding, and if it continues to close candle over it, this correction will turn out to be just a minor pullback similar to January 19th. So until the bearish conditions emerge, we will be bullish, targeting the 1.236 Fibonacci extension (TP = 4,670).
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China's relief stagnates. Before the turnaround in SPX in July 2023, we pointed out to the roll over in the Chinese stock market and its implications for the U.S. market. Then more recently, we saw how these markets continue to be intertwined when Chinese regulator stepped in and calmed down the market, resulting in both American and Chinese stocks enjoying a relief (or perhaps even reversing). However, in the past three days, we started to notice that the momentum began to decrease in the Chinese indices. Therefore, we think it would be proper to wait a little bit more time before committing to the bullish outlook.
Illustration 1.01
The picture above shows the daily chart of MACD, which hovers just slightly below the midpoint. If it breaks above this level, it will bolster the bullish case in the short term. However, the failure will be strongly bearish.
Illustration 1.02
Illustration 1.02 shows the daily chart of the Hang Seng Index. The yellow arrows indicates the past three days, with each having a lower low than the prior one.
Illustration 1.03
Illustration 1.03 displays the daily chart of CSI 300. The yellow arrow highlights the initial spike in CSI 300 after the regulator’s intervention.
Technical analysis gauge
Daily time frame = Slightly bullish
Weekly time frame = Neutral
*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:US Economic Indicators Reflect Growing Concerns Amidst...US Economic Indicators Reflect Growing Concerns Amidst Ongoing Challenges
As economic indicators unfold, the US economy grapples with a myriad of challenges, leaving forex traders and market participants in a state of heightened uncertainty. The week ahead presents a series of key data releases that shed light on the current economic landscape.
The latest predictions for the US Initial Jobless Claims for the week ending August 19th point to a figure of 240K, with Continuing Claims for the week ending August 12th anticipated at 1,708K. This comes after Initial Jobless Claims for the previous week were reported at 239K, and Continuing Claims for the week before at 1,716K. These figures provide insights into the ongoing dynamics of the job market, highlighting the impact of the economic challenges faced in recent weeks.
A significant concern is reflected in the forecast for US Preliminary Durable Goods Orders for July, which are expected to plummet by 4.0% on a monthly basis. Additionally, Durables Excluding Transportation are predicted to rise by a modest 0.2% monthly. This is in stark contrast to the strong performance observed in June, where Durable Goods Orders surged by 4.7% monthly, and Durables Excluding Transportation rose by 0.6%. Furthermore, Capital Goods Orders Non-Defense Excluding Aircraft for July are anticipated to inch up by only 0.1%, following a slightly stronger 0.2% increase in June.
The energy sector also remains in focus, with US Natural Gas Inventories for the week ending August 18th expected to stand at 33B cubic feet. This comes after a previous report indicated inventories of 35B cubic feet for the week ending August 11th.
These indicators collectively paint a picture of an economy grappling with challenges on multiple fronts. The US economy has been plagued by disappointing data, coupled with consumer debt levels reaching record highs. Sticky core inflation and positive surprises from other countries only add to the complexity. The US Federal Reserve has acknowledged the possibility of higher rates, even if a pause wouldn't indicate a reversal. Amidst this backdrop, the threat of stagflation looms large, a possibility that the markets may be underestimating.
As the forecast for the SP500 remains cautiously bearish, with consideration of the 38.2% Fibonacci levels, dynamic trendline, and support area, traders and investors find themselves at a critical juncture. Despite recent upward movement, the presence of these technical factors suggests the potential for a rebound in the nexts session, implying that the current phase might be a retracement rather than a complete reversal. The overall sentiment points toward ongoing challenges in the US equity markets, with potential implications for the foreseeable future.
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