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Stocks Try to Regain FootingStocks have found support around 4214, just a few levels above our anticipated floor of 4144 or 4122. We still have shed over 400 points in just three days, but we have seen a nice pivot from lows. There does appear to be volume behind the rally, as the Kovach OBV has picked up notably. However, we met immediate resistance at 4306, one level away from 4327 which we suggested as the first major level where we could anticipate resistance. From here, it is likely that stocks will range to establish value in this new territory, with 4144 and 4327 as lower and upper bounds respectively. If momentum continues off of this pivot and we break 4327, then 4364 is the next target.
FX:SPX500
by quantguy
How Low Can Stocks Go??Stocks plummeted as global recession fears mount. The strict lockdown in China has rippled through the markets, and additionlly PMI was a huge miss on Friday. We have smashed through our anticipated level of support at 4327, which we have been calling out for weeks now. We are currently finding support nearly 100 points below at 4228. We are seeing a green triangle form on the KRI to confirm support. The Kovach OBV has taken a nosedive, confirming the bear momentum. If the rout continues, then 4144 or 4122 are likely targets for support, and potential long positions. If we are able to muster the strength for a relief rally, then 4327 should provide resistance, then 4364.
FX:SPX500Short
by quantguy
Stock markets in the era of high inflation part 2In my previous analysis I went deep into a lot of the fundamentals of what is going in stock markets in the current environment. At the moment the main theme is that the Fed will keep on hiking until the market crashes or something else breaks in the financial system. It is unknown how much time will it take for something to break, but it is probably going to happen in 2022. The current inflationary pressures seem extremely strong as they mostly have to do with issues on the supply side, however the Fed can only affect the demand side and they are determined to crush it. At least that’s their goal and it is unknown whether they will be able to do so. The problem is that inflation regardless of high or low interest rates, does a lot of damage on a lot of companies, as it affects both the consumers and the expenses a company has. Therefore, a lot of stocks started coming under significant pressure many months ago, something that wasn’t really visible when someone was looking at an index. The major US indices looked fairly strong up until recently, however by looking at ARKK it is clear that many of the more speculative stuff that don’t make money right now started going down since Feb 2021. That was exactly the point where inflation started going up. As inflation was going higher and higher, more and more companies/indices started peaking in 2021. Some in April-May 2021, others in September 2021 and others in November 2021, while many are now down more than 40-50%. For example, Meta (Facebook) is down 50%, and its current situation looks similar to late 2018 (major gap down and then continued lower), but worse. Another example is Netflix which is down 70% and looks like it could go a lot lower. What is interesting is how Tesla had a huge move up in October – early November, a move that was incredibly abnormal and all indicators were flashing extremely overbought conditions, and Elon Musk managed to sell right at the top while making his move public. This was pretty similar to when Charlie Lee, the founder of Litecoin, made public the fact that he was going to sell his Litecoin position, and his selling marked the top for Litecoin, which occurred a few weeks before the crypto market topped in 2018. What is even more interesting is how Tesla has done so well when many other tech companies have done so poorly, something that could be explained by the fact that finally Tesla is becoming more and more profitable, and on the 20th it announced its earnings which had a big positive surprise. However now these earnings could mark the top for the stock, as its chart is starting to look like a proper top. First an extraordinary blow off top, then failure to push higher or even fill the gap at the top. Then filled the gap at the top while also forming an SFP, and then fell a lot lower. Since then, the market recovered and several exhaustion gaps have occurred up until now, with the most important one being the one that occurred post earnings. When the market opened the day after the announcement, it immediately filled a little gap higher and got quickly slammed back down. These are not good signs for a bull market. Now I’d like to get into the 4 major US indices, with the S&P500 being the main focus. Here I will go deep into the TA in order to get a better idea of where we are and what is going on. The first one is an uncommon one, but one I really like, and that is the Russell 3000 (top 3000 US stocks). Both the topping and the bottoming processes were pretty clean, as at first the top occurred with a nice distribution pattern after the market had been slowing down. Then the bottom came after a 15% correction from its ATHs, and as the market retested its Feb-March 2021 highs which turned into support and right after it swept the May lows. Initially there was strong bounce, then retested the May lows which held and then it pushed higher. However once the market retested the September highs and swept the Feb 2022 highs, it got badly rejected and yesterday it had an awful close. So far this chart could have been the perfect guide for someone trading the US stock market, however it isn’t enough from now on. The next one we are going to look at is the Russell 2000, which had an insane rally in 2020 and early 2021, but since March of 2021 it entered a huge distribution phase. In September the distribution phase was confirmed as the market had a huge breakout that quickly failed and the index quickly retested its range lows. When the range lows broke, they then turned into resistance and have rejected the market twice. Currently the market is retesting the lows once again, which makes me think that they will be broken after being tested so many times. This area could be seen as a double/triple bottom that hasn’t been swept and therefore it is acting like a magnet. In my opinion the market will break the lows, and at best it will have a little bounce after sweeping them, as this pattern looks extremely bearish. After a year of distribution and multiple confirmations of it, it is pretty hard for the market to bottom quickly and therefore after breaking the lows it could collapse further. It looks like the minimum target from here is the 2018 ATH, while fully reversing the vaccine/election trade is pretty likely and means that the Russell could get to 1700 this year. The third index we’ll look into is the Nasdaq 100, and we will look at the spot ETF, not the futures. The reason why I want to look at the spot ETF and not the futures, is that the ETF has some major areas which are of interest, that don’t exist on the futures. In terms of the topping and the bottoming processes, there isn’t much to be said here that differs from what was said above or the futures, other than the fact Nasdaq had two major gaps down that haven’t been filled. This is clearly an indication that tech is being sold a lot harder than the rest of the stock market and that in the future these areas could act as resistance. Now the key area I am looking at, is the triple bottom in the first green zone which like the Russell 2000 bottom will probably be broken even it’s just to sweep the lows and then move higher. The second area is the second green zone which was major resistance in the past and has turned into support, and the third one is that major gap at 276 which could be filled. Another similar chart is that of the S&P500 spot ETF, which has two double bottoms waiting to be broken, and one of the double bottoms is right above a major gap. Like with all the areas mentioned above, these could simply be local bottoms and the market might just have weak bounces or no bounces there. However, I expect the test of 390-400 on the SPY to give a major bounce as it looks a lot like when the Russell 3000 retested its Feb-Mar 2021 highs, swept the lows and filled the gap. Before I zoom out to get better perspective of what is going on the SPX, I’d like to zoom in on the SPY and see how important these gaps and double tops/bottoms are. For example, the two most recent local tops occurred with a gap and by filling a gap, with the first one also sweeping a triple top. The major bottom at 410 occurred after filling a double gap (two unfilled gaps in the same area) and the second bottom around 415 occurred with an SFP. Therefore, you can see how important these patterns are. By zooming out again and using the major Moving Averages, we can see that they are giving us clear signals of whether the market is in an uptrend or downtrend, as well as clear signals of where major support or resistance levels lie. For example, the market bottomed at the 400 DMA, and recently topped at an area where the 100 & 200 DMAs were about to cross. Usually when a major MA is tested so many times, it eventually breaks (400 DMA about to be broken). So at the moment the market is in downtrend which might accelerate below the 400 DMA, which looks like it will get broken fairly soon. Then until it gets reclaimed, I assume the trend is bearish and we need to be cautious. By zooming out even more, the two other major MAs I am paying attention to are the 200 and 400 WMAs. At the moment, getting to the 400 WMA seems a bit far-fetched as by that time the Fed will have probably stepped in to save the day. Many are comparing the current hiking cycle with that of 2018, as the Fed kept raising rates until the market collapse and then it quickly stopped hiking rates, and in my opinion this is a decent comparison. Clearly not a perfect one as inflation is much higher, the Fed Funds Rate much lower, the Fed is about to start hiking by 0.5%, markets are more elevated and the global economy in a worse position than back then. The reason why I think this is a decent one and I want to compare it to 2018, is because I think the Fed is in a similar or probably worse position that back then, and therefore they will have to reverse course. Back then the market bottomed after a 20% from its ATHs and at the 200 WMA, which is currently 28% below the ATHs. On the chart below you can see what these corrections would look like when zooming out. I’ve also added what it would look like if we had a mega crash and the market retested the 2000-2008 highs, something I think is extremely unlikely at the moment. As our fiat system is crumbling, the Fed and the US government will be forced to print a lot of money, and therefore the stock market will keep going higher and higher, regardless of how bad the financial conditions are and how many deep corrections will it have.
NASDAQ:TSLA
by BitcoinMacro
1
The S&P 500 Tanks, Will it Find Support??Stocks got hammered after testing resistance at 4504, just one level down from 4521, a relative high and the exact level that we predicted would provide resistance yesterday. We completely retraced the progress stocks have made from relative lows at 4364. The Kovach OBV has slumped, but does appear to be curving as we are finding support. If we are able to pivot off current levels, then 4521 remains our anticipated ceiling. If we are able to break down further, then 4327, a relative high, seems like a reasonable level to expect support.
FX:SPX500
by quantguy
Stocks Edge UpStocks are edging up, currently testing 4487. We are seeing a red triangle on the KRI indicating some resistance here. If we are able to break through, then 4521 will be the next level where we anticipate resistance as it is a relative high. We anticipate 4580 as a ceiling for now, as this is yet another relative high. The rally looks weak and the Kovach OBV has barely budged. Thus a s selloff is highly probable. If we do see a selloff, then 4364 should hold as it is a relative low.
FX:SPX500Short
by quantguy
Stock markets in the era of high inflation part 1As inflation prints are coming hotter and hotter, and the bond market keeps tumbling lower, there is a lot of debate on whether the stock market remains a good ‘hedge’ or ‘bet’ under these conditions. Well, this isn’t an easy debate and there are no easy answers, but in this analysis, I will try to outline certain important things I am looking at. I will also provide both a short term and long-term outlook by using both fundamental and technical analysis, however I will split the analysis into two pieces. This is part one and you will find part 2 in the links below. First of all, I’d like to look at the big picture and then start zooming in, as it is good to have an idea of where the global economy is right now and how that affects stocks. Well, the global economy is not in a good place as there is too much debt in the world, supply chains have all sorts of issues from the China lockdowns to the war in Ukraine, the population is aging, Covid created a lot of negative imbalances and the underinvestment in commodities has create a lot of shortages. Now all these are occurring after stocks had reached insane valuations in 2020-2021, inflation is at multiyear highs and at the same time the Fed wants to hike rates by 0.5% on every meeting in 2022 in order to fight that inflation. Their goal is to reverse the wealth effect it created in 2020-2021 in order to fight deflation, and they might keep hiking until the stock market collapses. When someone looks at all the above, he must be thinking that shorting stocks is a great idea and that the market will collapse soon. However, the truth is that the US economy is in a much better shape than many others as it produces a lot of the commodities it needs, US companies have been strong and earning prove that, while several companies substantially benefit from the current inflationary circumstances. For example, consumer staples and commodities producers are greatly benefiting from all the shortages and therefore their stocks have gone up. Of course, not all companies are doing well, as many of the more unprofitable/speculative companies are suffering greatly due to their profits being reduced or the debts repayments being increased. Higher inflation is eating away from the profits of some of those companies, while higher bond yields have increased the borrowing costs for others. These in turn have a negative effect on the stock prices at best some of these companies pay less dividends, while many companies might be pushed to bankruptcy if they can’t repay their debts. You might now be thinking: ‘If so many companies are doing poorly and bond yields are going higher, shouldn’t we be worried? If the 60/40 portfolio is getting crushed, couldn’t that create a larger crash? If the Fed is ‘telling us’ that it wants stocks to go lower, shouldn’t we get out?’ Well, during all the previous hiking cycles stocks mostly rose at the beginning and fell towards the end, and in our situation the Fed has barely begun hiking. Bond yields going higher means that bonds are being sold, and some of that capital could redirected into the stock market. Stocks are much more of hard asset than bonds are, as companies can profit from bad situation and investors can dump the losers to buy the winners, while the government usually ends up borrowing more and more, diluting the value of existing bonds. The market might have taken yields to 2.5-3%, but based on my analysis this is close to the point where I believe bond yields are going to top (bonds bottom). The more the Fed is raising rates, the more I believe they will create a recession and this in turn could make inflation come down. Inflation won’t go away, though it could be much closer to 3-4%, than 8-9%. In my opinion getting back into a disinflationary trend would greatly benefit stocks, and therefore in case stocks dip because of the Fed, I am a buyer. My reasoning is that if the Fed keeps raising rates, something will break and they will then be forced to the cut rates and start buying bonds. Essentially based on the current set of circumstances stocks could keep going up for a while, then crash, and then the Fed will be forced to step in to prevent the financial system from melting down. However, one thing is clear and it is very clear. There is so much leverage in the system, there is so much debt, there are so many issues in the economy, that the only way out is by devaluing the dollar, not by making it stronger. Raising rates to crush demand isn’t what ordinary people who can’t pay their rent need. They need cash in order to buy stuff they need, yet can’t afford. Politically this is the only politically acceptable way moving forward, and at the same time is the best outcome for the stock market. It will of course exacerbate the inflation and increase the liquidity in stocks which has been lacking recently. Actually, since Feb 2021 things have started deteriorating for stocks as governments stopped supporting businesses and banks cut down on lending, hence if they resume this would be pretty bullish. Oftentimes we see stocks do well in nominal terms during bad times, as the currency is losing value and people are trying to escape the devaluation. In real terms investors might be underperforming, but it might be better than holding fiat. Hence even if stocks have topped for now, it doesn’t mean the bull market is over, because the devaluation of fiat isn’t over. Another interesting thing to note here is that real rates have gone back to 0, as they were deeply negative before. These deeply negative rates definitely benefited the stock market as investors were trying to escape cash and bonds, but now cash and bonds have become somewhat attractive again. My belief is that inflation will start slowing down in the next few months and that the Fed is already too late, hence real rates will probably increase even more. This could be either seen as a positive if you believe that the Fed will slow down its rate hikes as they realize they don’t need to hike as much or it could be seen as a negative if you believe that they will completely ignore future inflation prints and raise rates until prices go down or something breaks.
FX:SPX500
by BitcoinMacro
BYND is still on my Radar. This is my plan to trade.BYND is a chart I have been following lately. It’s the chart with the less amount of data I have ever worked with. However, I see two consistent situations that happened at current levels in the past. So I plan to develop a setup if I see similar behavior with them (please check the green circles) OR to avoid trading if the price is not following those filters. This is my trading plan : - From current levels, I want to see the price bounce on the current support zone or in the lower trendline of the channel. - If that happens and the current descending trendline is broken, I want to see a correction following the proportions of the previous corrections (Please check the green circles) Finally, I will trade on a new local high if the correction is finished. I will set Stop loss on a new local low and the target at the next resistance level. My Risk-Free zone or break-even level will be at: 130.00, Which means if the price reaches it, I will move my stop loss to the entry-level, and I will have only two possible scenarios (Closing on $0 or Take Profit) What are the Odds I think of being right on this setup? Probably around 50% (random); however, the risk to reward ratio is close to 3. So for every dollar, I risk, I aim to make 3. That’s where you build your edge. Thanks for reading!
NASDAQ:BYNDLong
by ThinkingAntsOk
3
Stocks Continue Their DeclineThe S&P 500 has continued its slow and agonizing decline. We have found support at 4365, but failed to see any sort of pivot that would indicate a reversal. The Kovach OBV is gradually trending downwards. We do appear to have support at current levels, but if we break down further, we should expect support at 4327. Stocks are due for some ranging or a rally, as a corrective phase to the bear trend at worst. If we rally, 4462 and 4521 are good targets and will provide resistance.
FX:SPX500Short
by quantguy
Stocks Continue to SlideStocks keep edging down, consistently making lower lows. We did have a small rally off support from 4389, which immediately sold off to break down further. We are currently finding support at 4364, but the price action is looking very weak. The Kovach OBV has slumped, suggesting that the rout will continue. If we do see bull momentum come through, 4462 and 4521 are still profit targets, but 4389 will provide resistance. If we break down further, watch for support at 4327.
FX:SPX500Short
by quantguy
USDT All Time High Incoming!Have a quick look at the TA below first. This ascending channel is going to be the key to pinpointing the bottom of the bitcoin cycle. What we have is a "W" pattern formation on the daily which if completes has a breakout target to the top of this channel. Now my perspective on the next 60days is that Bitcoin will make a move down to the 200weekly sometime end of May 2022 check out this TA below. August 2022 is the next Fib time zone date , the last two have been fairly good for pivot points but nothing amazing. What is interesting is that 1.618 Fib , 3.618 time fib and the top of ascending channel come together nicely. If Bitcoin does infact make a move to the 200 weekly at about 22-23k then that would mean USDT would make a all time high and hit the top of the ascending channel marking the bottom.
CRYPTOCAP:USDT.D
by Sporia
1
Can Stocks Hold Support?? 😳😦Stocks have retraced to support at 4462, a strong technical level which seems to be holding. We are hanging on by a thread and if we break down further, then 4440 is the next target after crossing the vacuum zone below. The Kovach OBV has slumped, suggesting momentum is nil and needs to pick up in order for us to see a breakout. If we are somehow able to break out, then 4580 is the next target which must be broken before we are able to hit higher levels.
FX:SPX500Short
by quantguy
1
Can Stocks Recover??Stocks have retraced exactly to our level at 4462. Recall that this was the exact level we predicted yesterday. Stocks edged lower as they digested hawkish Fed minutes , and an increasingly Orwellian Covid lockdown situation in China . It does appear that we may be in the final stages of a corrective impulse and might be gearing up for another breakout. Stock futures should price in this news and break out at some point. The Kovach OBV has dropped but may appear to be bottoming out. Anticipate support from 4462 and 4440. The latter is a significant level, and if broken, we will likely test lower levels in the 4400's. If we are able to break out, then 4580 and 4632 are the next targets.
FX:SPX500
by quantguy
What I See For Elon Owning A Share Of TWTRElon --> Moon with rockets literally and with stocks so...bullish on this one. When I explain charts to my mom I say candles doing this(reference chart) is GOOD, bullish, if you're long that's good. I don't know how I feel about Twitter potentially doubling its market cap considering social media company influence in the world... but regardless I think it's a possibility-(eventually)-especially in the monthly charts. Big come back possibility for TWTR having been valued at $80.75 before. I HOPE Twitter is a humble company and Elon passes good influence and inevitably enthuses buyers to find faith in Twitter stock. Twitter at $50 is valuable to me. ]
NYSE:TWTRLong
by TradinBird5
2