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US 10y2y yield curve and the S&P500. What's next?I see many people expecting a massive crash because the yield curve has inverted, but they forget that stocks fell as the yield curve was inverting, something that didn't happen in the previous times. Before the earlier crashes, stocks rose before the inversion and kept growing for a bit after the inversion. In 1989 stocks didn't even fall after the 10y2y curve fell below 0. That inversion happened two years after the 1987 crash, and we have a similar situation this time. We had an inversion before the Covid crash, and now, two years after the Covid crash, we are having another. However, this time, we've already had a 25% correction on the S&P500. Although I believe we will have a recession and used to think it would be gruesome, I am starting to feel things won't be as bad as many think. It would be very odd to have a second crash after the March 2020 crash, as many investors still expect a similar correction, making it less likely. Everyone also knows the Fed will eventually be forced to cut rates and return to QE, creating a market crash less likely. The market is like a junky that wants more QE and low rates, even if that would come at the cost of short-term pain, as the market is forward-looking and is already anticipating that Central banks will support demands. They will have to, as governments won't be able to fund themselves in any other way. At the same time, we must not forget many structural forces other than the Fed, like stock buybacks, indexation, passive investing, cheap & easy access, bank money/credit creation, and foreign investment inflows in the US. Of course, we definitely shouldn't forget how strong the US economy is, having some of the best companies worldwide. It feels like 2000-2013 was like getting out of the 1968-1982 period: massive consolidation and considerable changes in the structure of markets. From 1982 until 2000, the market rallied by 1275%, with very few significant corrections. None was more prominent than 40%, and the largest was similar to the Covid crash. We are nine years into this expansion and have rallied only 200% from the previous highs. Therefore I don't see why we should expect another massive correction soon, right after we've had a 20%, a 35%, and a 25% correction over the last 3.5 years. I think the only reason for a crash would be the Fed raising rates above 3.5%, which I see as nearly impossible. Of course, I am not saying another dip is impossible. If the SPX tops around 4350-4400, I can see us making another low, only to scare longs and trap shorts and send it much higher. This idea is more about not getting stuck in some doom porn and seeing that markets can go up even when things are not expected to go well or aren't going well.
SP:SPX
by BitcoinMacro
Stocks Face Resistance at HighsStocks are still contending with relative highs. The S&P 500 has been wavering between highs at 4009 and 3963 or so. The strong buying spike from CPI last Thursday has leveled off in a sickle pattern. From here, we will see if stocks continue to range or if they retrace. The Kovach OBV is still bullish, but does appear to be losing steam. We could be forming a bull consolidation in pattern in preparation for another breakout. If so, 4068 is the next target. If we retrace, we should see support from 3963 or 3937.
FX:SPX500
by quantguy
2
Bitcoin update!For months I have been saying on here that the bottom is in for Bitcoin we will not see lower than 17.5k, the whole year I had been on point with every macro move until this week. I still believe that the bottom would have still been in if it wasn't for FTX black swan ,below you can have a look at that TA , which is now invalided . Everything was going perfectly like last cycles , with price , timing and movements until this black swan , Bitcoin would have rallied past 20k with the stock market no doubt. Its almost like were repeating the same thing that happened at the top , at the bottom. Cycle Top - A lot of indicators signaled the top here for the Bitcoin bull market and then we had the big crash , one of the main ones was the pi cycle. TA above shows how this was right on clue 3days before the top it signaled and crossed and 3 days later bang , it was the top for a while at least . Technical Top (Bull Trap) This move higher was weird from the start , we had only half of the Bitcoin addresses active during this period and then my whale manipulation alert flashed on that monthly . This indicator shows me that price is being pushed up by whales , which is not a good thing for price because its a setup for a top or crash after. In the TA above I speak about this , using on chain metrics you can see how price was pushed up by the few whales , there was no hype , no retail. Now fast forward a year and we find our selfs in the same situation at the bottom. Cycle Bottom - There so many indicators and signals that flashed the bottom you can check it out in the TA which I first linked. Technical Bottom (Bear Trap) - Using this model you can see we now at the green area that bottomed last cycle and we still above the white support which Bitcoin historically creates every cycle. The bottom of the green channel in this model currently sits at 11k , anything is possible at this moment so a move down to this area can happen but what i expect to happen is a close above this white line so hammer wick down to 11k and weekly close above 15k. So bottom line is at this moment I have no idea where this is going for the first time this year , prepare for impact is what im doing , orders set at 11.5k already on a exchange that hopefully is not going under lol , coinbase and we shall soon find out if the big players in the space are pulling off the same stunt as last November.
INDEX:BTCUSD
by Sporia
3
S&P 500 Testing 4000?Stocks have benefited immensely from the CPI print on Thursday which showed that inflation is cooling slightly and therefore may signal a dovish pivot soon in Fed rhetoric. Stock indexes have all rallied accordingly. The S&P 500 is currently at the door of the 4000's. We are testing one level below 4009 at 3978. A red triangle on the KRI does seem to suggest that we will be facing resistance here, but we have not seen a significant retracement. If we do, we should find support at 3937 with 3909 a likely floor. If momentum can continue, then 4009 is the next target.
FX:SPX500
by quantguy
2
Cooling Inflation Sends Stocks SoaringThe S&P 500 has rocketed after October's data suggests that inflation is weakening. CPI came in at 7.7% against an expected 7.9%. The markets are looking for any excuse to anticipate a weaker Fed policy, and a tapering in rate hike trajectory. Yields have fallen dramatically and risk on assets are flying. The S&P 500 blasted off from 3749, through our relative high at 3848. We still have some room to go before 3909 but that is the next target. It might be the case that stocks equilibrate around these higher levels as the data gets priced in. If we retrace, expect support at 3825.
FX:SPX500
by quantguy
2
Stocks Showing Signs of WeaknessStocks have edged higher, but appear to be leveling off. Election uncertainty will be lifted as results of the 2022 midterms keeps pouring in. The markets are not as concerned in election results as most think, but we may see a small rally now that they're over. The Kovach OBV has flatlined, which could suggest that stocks will hold their course. We have seen a very weak rally with the S&P 500 inching gains for the past week. The price action appears to be rounding off, which could suggest a selloff soon. Additionally, more warnings of a global recession keep pouring in, so it is difficult to imagine this wave of euphoria can sustain. If we fall, we should have support at 3758 or 3714. If we rally, we must break 3909 before considering higher prices.
FX:SPX500Short
by quantguy
Stocks Edge Higher but Face ResistanceStocks are edging higher, currently testing 3782, a level we have mentioned several times before. This follows a precipitous selloff, as the reality quashed hopes (as it so often does) of a dovish pivot in Fed policy. We collapsed from the 3900's almost 200 points, and found support at 3694 or so. We are currently seeing a tepid rally that is running into a lot of resistance at 3792, confirmed by red triangles on the KRI. If we reject current levels than 3694 should provide support. If we are able to break out then 3848 is a good intermediary target before the 3900's.
FX:SPX500
by quantguy
Yesterday's FOMC: Reality Sets in for StocksReality crashed the party with stocks yesterday, as we have been predicting here. The FOMC event was still quite hawkish despite the market's anticipation that we would see some softening in rhetoric. This caused stocks to tank yesterday, with the S&P 500 falling through multiple levels to find support at 3758. European equities have softened which could portend another dump for the NAM session today. Additionally, eyes are on the BoE and we will see if their outlook matches that of the Fed. If we fall further, we could find support in the upper 3600's, with 3645 a likely floor. A rally will have to claw back through multiple levels. We don't see a rally strong enough to break through 3909 any time soon. The Kovach OBV is still very bearish, and it will likely take a few days for the market to price in the Fed's decision.
FX:SPX500Short
by quantguy
Stocks Retrace From HighsStock indexes have pulled back from highs with stronger than expected construction and PMI data putting a damper on the markets' hopes that the Fed will taper their hawkish stance. These hopes were never really justified in the first place, so it was only a matter of time before reality set in. The S&P 500 inched above our level at 3909 and then fell back to support around 3848. We anticipate further support at 3792. The Kovach OBV has slumped so it is possible we may see some ranging here as stocks seek direction. If we can break out the next target is 3963.
FX:SPX500Short
by quantguy
3
Stocks Edge Higher, Looking WeakStocks have crept up, after rejecting highs at 3909. We had a brief retracement yesterday, which quickly found support and the S&P 500 was able to tick up past 3909, making a new relative high albeit barely. Several red triangles on the KRI suggest that we are running into stiff resistance at these levels. The Kovach OBV has slumped, so we will see if we have enough momentum to break out. If so, 3963 is the next target. If not, then 3792 should be considered a floor price.
FX:SPX500Short
by quantguy
1
Stocks Continue to GainThe S&P 500 has edged higher, after a brief retracement from 3887. We seemed to reject this level but found support just above our level at 3758. Dedicated readers will remember that we anticipated support here in previous reports. From there we pivoted nicely and broke through the previous high of 3887 to reach our target of 3909. The Kovach OBV is climbing steadily so we will see if this rally can continue. If we can break through 3909 the next target is 3963. If we retrace, then 3758 should hold as a floor.
FX:SPX500Short
by quantguy
2
NAS100 next 6monthsThis is a potential scenario unfolding for the NAS100 in the next 6 to 10 months. I think it would be too easy just to short the white resistance line . What is more likely to happen is price breaking that area and triggering a fomo rally to 0.5 or 0.618 before starting its next leg down. If this does happen then we could see a 44% drop from all time high down to 9300 points which would be pre-covid levels. The TA below shows what would happen to Bitcoin if this did unfold in the stock market.
OANDA:NAS100USD
by Sporia
S&P 500 RalliesThe S&P 500 has shrugged off Amazon losses, pivoting just above our level at 3758. Amazon has given up $trillion status as weak holiday spending as forecasts project the weakest holiday sales growth quarter ever. We will see if stocks can continue to rally, as a red triangle on the KRI is confirming resistance at current levels. The price action is rounding off and the Kovach OBV has slumped. If we continue to rally, we will face resistance from 3887, and 3909, the latter corresponding to a relative high. If we retrace, anticipate support at 3758 again.
FX:SPX500Short
by quantguy
Stocks Edge Higher Despite Earnings MalaiseStocks have rounded off, but still edge higher despite disappointing Microsoft guidance , Meta malaise, and general tech sector weakness. Goldman Sachs is bullish on a recovery for Microsoft, and it is one of the only AAA rated companies on the planet. These facts have weighed on the indexes, but have not contributed to much of a sell off yet. If earnings continue to come in weak, then it is difficult to image that this rally will continue. Technically, we are very close to our next target of 3909 where we will likely face resistance as it is a relative high. The Kovach OBV is still edging up, but does appear to be showing signs of leveling off. Expect support at 3792 if so. We should see further support at 3758.
FX:SPX500Short
by quantguy
Stocks Rally! Is this Just Exhuberance?The S&P 500 has rallied off increased expecatations of a Fed tapering after housing price data came in negative. Additionally, Coca-Cola and GM posted earnings results yesterday suggesting that there is hope for some companies feared to be hit by inflation. Be careful trading this, as the markets have been fooled before, and we will need to wait for forward guidance from Fed speakers before any rally is confirmed. The Kovach OBV is climbing steadily, and we have reached our target of 3849, with 3909 the next major level and next target. If we reject current levels, 3792 or 3758 could provide support.
FX:SPX500Long
by quantguy
Stocks Attempt Hihger LevelsStocks have continued to edge higher, though they are looking quite weak. We were able to break past 3792, but the very next level at 3810 is providing significant resistance. The price action rounding off, and red triangles on the KRI are confirming resistance. Additionally, the news sentiment remains bearish, so at some point we are likely to face a swift rejection of current levels. However, the Kovach OBV is still strong. If we are able to break out, then 3849 is a reasonable target with 3909 a likely ceiling. We should start to see some support at 3758 if we retrace.
FX:SPX500Short
by quantguy
Stocks Face HeadwindsDespite plenty of negative sentiment in the news and a week packed with data, including the Fed's redbook and housing price indexes on Tuesday, GDP on Thursday and PCE on Friday. We hit a high of 3792. We tweeted on Sunday night that this small rally was likely to be short lived and sure enough we are seeing a pull back. The APAC markets are selling dramatically , as investors are worried about Asia's economic future. This is likely to bleed into the US markets as well. If so, we could see support at 3645 again. We expect resistance at 3792 to hold but if not, 3909 is the next target.
FX:SPX500Short
by quantguy
Major Earnings Weigh Heavy On StocksThe S&P 500 has taken an unfortunate turn as abysmal Snapchat profits have taken a turn for the worse and the stock has plummeted naerly 25%. This took down other social media stocks with it, some of which form a formidable component of the S&P 500. We were seeing support at our level at 3676, but the selling momentum has taking us down to 3645, where we are seeing some support. If the bear momentum continues, we could retrace the entire move back to 3584 or so. If we are able to pivot from here, look for a ceiling at 3758, and a likely intermediary target at 3714.
FX:SPX500Short
by quantguy