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Stocks Finding Support?Stocks have retraced, hitting our exact target of 4068 and finding support. Recall that this was the head of the inverse head and shoulders pattern that failed mid May. Failed inverse H&S patterns are usually bearish omens and stocks were in the doldrums for basically the rest of May. However toward the end of the month, we were able to break out, but 4068 remains a strong level. We were able to make a run for 4200, but met resistance and retraced. Currently we are ranging in the vacuum zone between 4068 and 4122. The S&P 500 may attempt to establish here. If we retrace further watch the vacuum zone below to 4009. The high just below 4214 should serve as a ceiling for now.
FX:SPX500Long
by quantguy
SPX/USD Daily TA Neutral BearishSPX/USD Daily neutral with a bearish bias. *Janet, Jerome and Joe all got together yesterday and it's fair to say they all agree they want more pain before more gain ("do anything it takes to bring down inflation"), and they want it mainly to be done through monetary policy (Fed). Fed also started rolling off TS and MBS today.* Recommended ratio: 40% SPX, 60% Cash. Price is currently trending down at $4100 after being rejected by $4175 resistance on the first test. Volume remains moderate and is on track to favor sellers for two consecutive sessions. Parabolic SAR flips bearish at $3869, this margin is neutral at the moment. RSI is currently trending down at 50.24 after getting rejected on a retest of 52.68 resistance. Stochastic is currently crossing over bearish at 91. MACD is currently testing the uptrend line from March 2020 at -44 after breaking out above -76.22 minor resistance. ADX is currently trending down at 23 as Price is attempting to continue rallying, this is mildly bullish at the moment. If Price is able to bounce here then it will likely retest $4175 resistance before attempting to test the upper trendline of the descending channel from November 2021 at ~$4400. However, if Price continues to break down here then it will likely retest the lower trendline of the descending channel at $4000 before potentially falling lower. Mental Stop Loss: (two consecutive closes above) $4175.
SP:SPX
by dailytaguy
Momentum Fades for StocksStocks appear to have topped out for now just under our level at 4214. We've since retraced, finding support at 4122, just above the vacuum zone to 4068. We are seeing several green triangles on the KRI which confirm the support. It seems that stocks are ranging and establishing value between 4122 and 4178. Optimistically, we might be forming a bull flag pattern, however the Kovach OBV has slumped, suggesting we will need more momentum to come through to break out of it. If so, we must break through 4214 before we can hit our next target of 4306. If support does not hold, watch the vacuum zone below to 4068.
FX:SPX500
by quantguy
Stocks Surge as China ReopensThe S&P 500 has broken out of the malaise it has held all of last week. China seems to be reopening which has investors breathing a sigh of relief. After the inverse head and shoulders breakdown, we saw tremendous resistance and stocks were in the doldrums, hovering in the 3800-3900 range with 4K a hard upper bound. The neckline of our failed inverse H&S pattern provided strong resistance as we had predicted all of last week. Finally, we were able to break out from this level, smashing through our previous targets at 4122 and 4144, and reaching a new relative high just above 4200. We are starting to face resistance from a congestion zone from the end of April, confirmed by a red triangle on the KRI just below 4214. We are finding support at 4144, and should see continued support from 4122, but if not, we are set to cross the vacuum zone to 4068, the neckline of our failed inverse H&S pattern. The next target is 4306, a relative high from the very beginning of May.
FX:SPX500Long
by quantguy
Explaining the moves on the S&P500So far this correction on the S&P has been extremely orderly and makes a lot of sense. A lot of things are very similar to the 2018 correction, especially when it comes to how the market has moved. The key differences in the current environment are that the Fed hasn't raised rates as much, inflation is a lot higher, debt is a lower higher, the economy is in a worse shape, energy is a lot more expensive and markets are still a lot higher than they were back then. Yet volatility hasn't gotten out of control and the market is moving in an orderly fashion. Now the key reasons as to why stocks have fallen so much are: 1) Future earnings have been revised downwards due to bad economic conditions and deglobalization, 2) Inflation is hurting a lot of companies as their expenses keep going up, 3) Inflation has caused markets and the Fed to raise rates, something that has put a lot of pressure on everyone that wants to borrow or has borrowed money ( funds, governments, corporates, retail), 4) Markets were significantly elevated and the valuations of many companies were unreasonable. At the moment the market is bouncing as many investors got extremely bearish. The sentiment everywhere was so bearish, and although I personally don't think the bottom is in, I believed a relief rally was going to come. Why? Well, let's start with some fundamental and technical analysis and see how we got here... Since Mar 2021 inflation started getting hot, while certain sectors of the market started getting hit. In November inflation became too hot and the Fed made clear that it would fight inflation by raising rates and stopping QE. In December and January the market had an ordinary dip down to the May-June 2021 highs, swept some key lows and bounced. In February as inflation wasn't going down and Russia was positioning to invade Ukraine, markets started becoming fearful and fell enough to fill a double gap on SPY, and bottomed soon after Russia invaded Ukraine. Fear had reached a peak at that time, but the bounce wasn't all that strong as the Fed was still planning to do its first rate hike. Soon the market rolled over again without making a new low. Once the market swept a low on SPX but not on SPY it bounced hard just a few days before the Fed meeting. After the Fed meeting it rallied hard and went up to the Jan-Feb triple top, swept the highs, hit resistance and partially filled an open gap. The same way the market went for the highs and the gap in its reach for liquidity (hunting stops), then went for the lows and the gaps lower, as there were several of them. The drop begun before the next Fed meeting, and on the second Fed meeting they raised rates by 0.5%. They also made clear that they didn't plan any hikes larger than 0.5%, something that initially caused the market to spike higher, as it interpreted the news as bullish, while also expecting the second meeting to play out like the first one. However that wasn't the case and the market crumbled lower soon after. Investors had the wrong expectations and the market was still heavy. Once the market fell by 20%, it paused, but as it had formed a cheeky triple bottom, it made a final push lower before bouncing higher. It also hit the Monthly S3 which is a great place to bottom, consolidated a bit and then bounced hard. It has now reclaimed key support levels and could go up to 430-440 (4300-4400) in order to take out the triple top and retest the key breakdown zone, along with the Yearly Pivot. What could come after this is unclear. In my opinion inflation has peaked and although it will probably be positive YoY, as bonds yields have started coming down and the terminal rate seems to be around 2-3%, the Fed might slow down a bit. They might start being more dovish in their next meetings as they don't want to push things too much. Inflation is already coming down in the US due to a strong dollar, equities collapsing, a much lower growth in the money supply and with QT starting in June. At the same time however, the energy and food shortages could become so extreme, something that the bond market probably already knows that and that's why it looks shaky. Things are so bad for ordinary people, that if the Fed & government don't start to support everyone in need, things could get very ugly. Therefore bond yields coming down along with inflation could simply be a short term pause and nothing more than that. Maybe in a few months they could resume higher, putting additional pressure on stocks. In my opinion stocks could rally by another 5-6% before rolling over again, although I am not sure whether the bottom is in or not. I tend to believe it isn't, and that stocks would need to fall 5-15% from their recent low, but wouldn't be surprised if they go up 5%, drop 7% and then go higher again.
AMEX:SPY
by BitcoinMacro
1
Stocks Meet Resistance EXACTLY at Our Level!!The S&P 500 has broken out from the upper 3000's and made a run for higher levels. We faced pretty steep resistance from 3978, about the midpoint of our failed inverse head and shoulders pattern. We noted that failed inverse H&S patterns are usually a bearish sign, and we have been in the doldrums all week. We also noted several times that the neckline of the failed pattern would provide significant and prohibitive resistance. This is exactly what we are seeing. Though the S&P 500 has broken out, it is currently facing resistance exactly at the neckline at 4068, confirmed by two red triangles on the KRI. The Kovach OBV has trended up, but tapered and flattened with the resistance. We will need more momentum to break through. If so, the next targets are 4122 and 4144. If we retrace, then 3978 should provide support again.
FX:SPX500Short
by quantguy
Stock local bottom in for a while?All 3 major US indices hit major key levels and bounced nicely. The S&P500 swept several lows and formed a nice bottom. It also hit the S3 Monthly pivot and has now reclaimed the S1 Yearly pivot, and is looking fairly strong. The Nasdaq 100 swept the November low, right before the huge rally begun, and partially filled a large gap on NDX/QQQ. The Russell 2000 hit the 2018-2020 highs, and like the Nasdaq, it essentially retraced the entire election/vaccine trade. Based on all the above, the bottom could be in, especially as the SPX corrected by 21% and the other two by more than 30%. However there are many key resistances levels above, and it doesn't feel like we've seen capitulation yet. Not only that, but not all key areas have been hit. I could see the SPX getting to the Sep-Nov 2021 highs, while the NDX and RUT would fully fill the gap from the vaccine/election trade. Essentially I'd like to see the SPX get properly oversold as so far it is simply as oversold as it was in Dec 2018, yet valuations are way more extreme and charts look a lot worse, as well as seeing the NDX & RUT hit their S3 Yearly Pivots and sweep a few more lows. For example the RUT has formed a double bottom right above the gap, and that's why I think we have at least one more push. Doesn't mean the market is going to melt down and that we'll get a huge bear market, but as the typical bear market for the S&P is about 30%, I'd like to see it at least get down there. Until then though, I do believe the SPX could get up to 4300-4400. I believe a local bottom could be in and a 10% bear market rally is possible here. My target is the key breakdown zone at 4360 that was never retested, along with the triple top at 4300. Getting up the Yearly pivot before getting smacked down again is more likely in my opinion than going straight down from here. In my opinion people got extremely bearish, while the market got extremely oversold, hit major targets and at the same time inflation seems to have peaked.
FX:SPX500
by BitcoinMacro
PLTR/USD Daily TA Cautiously BullishPLTR/USD Daily cautiously bullish. *It's become rather apparent that even after an 85% drop from its ATH, investors still aren't done selling . Taking a closer look at their financials and it's clear that they are a tech growth company that intends to be here for a while but face the reality that they may be operating in a high interest rate environment for a year or more. Financials summary: negative income since going public due to arguably egregious spending on Selling/General/Admin Expenses (that exceed Gross Profit which is $1.20b); Shareholder Equity is at $3.32b as of Q1 2022 and they have maintained minimal debt since IPO; lastly, they started producing Free Cash Flow last year in their fourth year being publicly traded and continued to do so in Q1 2022. So even though they have a healthy balance sheet and are generating positive cash flow, growth companies are often faded in favor of value companies in rising/higher interest rate environments, which helps to explain a lot of the negative sentiment.* Recommended ratio: 65% PLTR, 35% cash. Price is currently retesting $8.52 minor resistance after bouncing from the lower trendline of the descending channel from November 2020. Volume remains moderate (low) and fairly balanced between buyers and sellers as of late but is currently favoring buyers for two consecutive sessions. Parabolic SAR flips bearish at $7.13, this margin is neutral at the moment. RSI is currently trending up at 42.48 but is still technically testing the uptrend line from 01/27/22 as resistance at ~40; if it can continue surging, the next resistance is at 46.81. Stochastic crossed over bullish in today's session and is currently trending up slightly at 93 as it tests 89.92 resistance; the next resistance is max top. MACD remains bullish and is currently trending up at -0.90 as it quickly approaches -0.81 resistance. ADX is currently trending down slightly at 39 as Price is attempting to establish a short term bottom, this is mildly bullish. If Price is able to break out above $8.52 minor resistance, the next likely target is a test of $10.44 minor resistance. However, if it gets rejected here then it will likely retest the lower trendline of the descending channel from November 2020 as support at ~$7.31 before potentially heading lower. Mental Stop Loss: (two consecutive closes below) $7.39.
P
by dailytaguy
SPX/USD Daily TA Cautiously BullishSPX/USD Daily cautiously bullish. *The VIX is heading down, USDX down, Gold down and for the first week in years, crypto is decoupling from equities as it has gone down while equities have gone up. Risk-on investing is starting to lose favor in crypto due to a multitude of reasons but mainly because most market speculation was concentrated in crypto. What is shaping up to be a Bear Market Rally, that may very well run into next month, will face a big challenge when the Fed begins to reduce their balance sheet of security holdings (treasury and mortgage-backed securities) on June 1st and the FOMC releases a statement after they regroup on June 14-15 regarding another funds rate hike (Fed is committed to at least a 50 bp rate hike in both June and July).* Recommended ratio: 70% SPY, 30% cash . Price bounced off of $3939 (second time in eight sessions) and is currently on the verge of testing the lower trendline of the descending channel from August 2021 as resistance at ~$4090 (also for the second time in eight sessions). Volume remains high (moderate) and is on track to favor buyers for a second consecutive session. Parabolic SAR flips bearish at $3813; this margin is neutral at the moment. RSI is currently trending vertically at 48 as it quickly approaches a formal retest of 52.68 resistance. Stochastic remains bullish and is currently trending up at 83 but is still technically testing 76.29 resistance. RSI remains bullish for a second consecutive day and is currently trending up at -84.13 as it quickly approaches -76.22 minor resistance. ADX is currently trending down at 28.42 as Price is surging, this is mildly bullish at the moment. If Price is able to breakout above the lower trendline of the descending channel from August 2021 at ~$4090, then the next likely target is a test of $4175 resistance before potentially moving higher. However, if Price is rejected at ~$4090, it will likely retest $3938 minor support before potentially falling lower to $3706 minor support. Mental Stop Loss: (one close below) $3938.
SP:SPX
by dailytaguy
Stocks Tepidly Pull HigherStocks have drifted upwards, testing the upper bound at 3978. This is roughly the midpoint of the failed inverse head and shoulders pattern that we have been referencing the past few reports. Recall that such a failure in this pattern is a bearish sign for stocks, and what we are witnessing is to be expected. The S&P 500 has been in the doldrums and can barely muster the strength to test the midpoint of the pattern, let alone the neckline of the inverse H&S at 4068, which will continue to be a barrier even if we can muster a rally. On the downside, 3825 should remain a lower bound for now.
FX:SPX500Short
by quantguy
S&P 500 Unable to Clear 4000Stocks have been wavering at lower levels and just can't seem to break 3978. This is a technical level, about midway through our inverse head and shoulders pattern. This lackluster behavior is to be expected as the break down from the inverse H&S pattern is a very bearish sign, and portends strong resistance if we do try to inch back up and test highs. The neckline at 4068 will be an incredibly difficult barrier, as we are clearly seeing. We should see support from around the level corresponding to the 'head' in the low 3800's. If not, we are clear to test the 3700's.
FX:SPX500Short
by quantguy
Stocks Still WobblyStocks have made an attempt to recover from Friday's selloff, but we have met strong resistance at 3978, about midway through the failed inverse head and shoulders pattern. We noted that this is a very ominous sign for stocks and in the past, from which it will be difficult to recover. It also suggests that 4068 (the necline of the inverse H&S) will be a very tough level to break, and currently, the S&P 500 does not seem to have the momentum to even test this. The Kovach OBV is extremely bearish, suggesting we are due for a relief rally. However if the selloff continues, expect support at 3810 again.
FX:SPX500Short
by quantguy
SPX/USD Daily TA Neutral BearishSPX/USD Daily neutral with a bearish bias. *St. Louis Fed President James Bullard said he remains committed to a 3.5% fed funds rates at the end of 2022 with potential for rate decreases in 2023; Fed Chair Jerome Powell also said Fed would not hesitate to raise rates beyond what is considered "neutral" until inflation comes back down; unemployment remains low but economic growth is slowing and inflation is rising, so the case for stagflation isn't necessarily getting weaker.* Recommended ratio: 45% SPY, 55% cash. Price is currently testing $3938 minor support-turned-resistance after briefly touching $3800. Volume remains moderately high and has been fairly balanced between buyers and sellers for the past six sessions. Parabolic SAR flips bullish at $4035, this margin is mildly bullish. RSI is currently trending up at 40.68 and is still technically testing 38.06 resistance; it should be noted that RSI recently defended support at both uptrend lines from August 2015 and January 2022, this is bullish. Stochastic remains bearish and is currently on the verge of crossing over bullish at 36.31. MACD remains bearish and is currently trending up at -107, if it can break above -103 then it would be a bullish crossover; the next resistance is at -76.22 while the next support is far below at -226. ADX is trending up slightly at 30 as Price is currently avoiding a breakdown to $3706, this is neutral at the moment. If Price is able to reclaim minor support at $3938 then the next likely target is a retest of the lower trendline of the descending channel from July 2021 at ~$4100 as resistance. However, if Price breaks down here, it will likely test $3706 minor support before potentially heading lower to $3508 minor support. Mental Stop Loss: (two consecutive closes above) $3938.
SP:SPX
by dailytaguy
TWLO/USD Daily TA Neutral BullishTWLO/USD Daily neutral with a bullish bias. *Twilio has fallen 81% from its ATH ($457.65) and is approaching the end of a massive Falling Wedge from March 2021.* Recommended ratio: 55% TWILIO, 45% cash. Price is currently testing the lower trendline of the Falling Wedge from March 2021 at $100.65 support. Volume has been shrinking since early May as Price trades within the second largest supply/demand zone on the chart; this is mildly bullish as it is indicative of an incoming breakout (due to it being a Falling Wedge the bias is to the upside). Parabolic SAR flips bullish at $105, this is mildly bullish. RSI is currently trending down slightly at 40 as it continues testing 37.47 support for the sixth consecutive session. Stochastic remains bullish and is currently trending up at 85; the next resistance is at max top. MACD remains bullish and is currently trending up slightly at -10; the next likely target is a test of the descending trendline from May 2020 at -4.57 resistance. ADX is currently trending sideways at 33 as Price is attempting to establish support at $100, this is neutral at the moment. If Price is able to defend $100.65 support then the next likely target is a test of the upper trendline of the Falling Wedge at $120-$125 (this is also the largest supply/demand zone on the chart) before potentially breaking out of the formation to the upside. However, if Price breaks down below the lower trendline of the Falling Wedge at $92.60, the next likely target is a test of $70 support. Mental Stop Loss: (two consecutive closes below) $95.50.
NYSE:TWLO
by dailytaguy
Can Stocks Recover from Lows?Stocks have recovered from Friday's selloff. Though we have fully retraced from that dip, we remain under 4000, and well below the neckline of that failed head and shoulders pattern discussed last week. The fact that we broke down from the inverse H&S is foreboding and that we broke lower than the head (relative low) of this pattern is even worse. The Kovach OBV is extremely sold off, so we may have some hopes of a relief rally. If so, 4068 will be a formidable barrier to the upside. We should find support again at 3810 if we sell off further, but the next support level after that is in the 3700's.
FX:SPX500Short
by quantguy
Zoom out for a clearer picturethe stock market has finally reversed some of its amazing gains from the previous years of free fed money. The couple of lines i have drawn are crucial to watch because 1 st line. They were the highs which market breached before the rally 2 nd line those are the lows of the 2020 covid dump. These are 2 areas where there was buying pressure. Technically bollinger bands are indicating volatility in the markets - the last 2 recessions - during the dot com bubble markets fell about 50%, and again ~50% during the 2008 recession. How much this time? no one knows. its already down 20% from previous high, As traders, we can only manage the risk we take. Without taking risk you can't make profits. Good luck all. Be careful!
AMEX:SPY
by one-two
QQQ Bear FlagIn a normal less volatile market (ie; a full on bull market) double bottoms are a nice spot to re enter or scale bigger long. In this market after yesterday's big down day (flag pole) and today's sideways chop with real indecision you lean into the larger pattern on cash only session charts (bear flag). Fully expecting SQQQ to attempt to hit the last remaining VWAP (century @ $80) and TQQQ to possibly go much much lower. Without a freak bounce tomorrow consider not longing the Q's for some time it may be even more painful after bulls officially give up this area. Be careful folks. For reference $TQQQ's last century vwap is I believe all the way down at $14-$15...crazy right? Maybe not and time will tell.
CME_MINI:NQ1!Short
by Todoubled23
23
Stocks Looking WeakAs predicted here, stocks have fallen from a failed inverse head and shoulders breakout. We were able to predict this due to the incredibly weak 'breakout' from the neckline at 4068. We also noted that this was a very bearish omen, and called out the exact level of support at the head of the inverse H&S at 3887 or so. Currently, we are seeing a bit of support here, but the brief rally is nothing compared to the magnitute of the previous selloff, and this is confirmed quantitatively by the Kovach OBV, which is still incredibly bearish. If we fall further, its uncharted territory, but we should have support at the base of the 3800's. If we somehow muster the strength for a rally, then we must break 4068 before testing higher levels, which is a barrier for now.
FX:SPX500Short
by quantguy
2
VIX Daily TA Neutral BearishVIX Daily neutral with a bearish bias. *VIX (Volatility Index for SP500) has gradually been rising since November 2021 for a variety of reasons but mainly having to do with supply chain reorganization (due to Covid and geopolitics) and the Federal Reserve transitioning from QE to QT.* Recommended ratio: 45% VIX, 55% cash. Price continues to trend within the ascending channel from October 2021 and is currently testing 30.98 minor resistance after bouncing from the 50 MA at 26.60 support. Volume has been picking up and is the highest it's been since 03/29/22 . Parabolic SAR flips bullish at 34.31 (which currently coincides with the upper trendline of the ascending channel from October 2021). RSI is currently trending down at 51 after being rejected by both the uptrend line from 03/28/22 and the descending trendline from 04/26/22; the next support is at 35.65. Stochastic remains bullish for a second consecutive session after bouncing from 10.96 support and is currently trending up at 27; the next resistance is at 54.24. MACD remains bearish and is currently trending sideways testing 1.20 support for a fourth consecutive session as it attempts to break above 1.65 to form a bullish crossover. ADX is currently trending down slightly at 21 as Price is attempting to break back above 30.98 minor resistance; if Price can reclaim 30.98 and ADX bounces, this would be bullish. If Price is able to close above 30.98 minor resistance one more session, the next likely target is a retest of the upper trendline of the ascending channel from October 2021 at around 34.50. However, if Price is rejected here then it will likely retest 26.60 support. Mental Stop Loss: (one more close above) 30.98. *Price refers to Index value when it comes to VIX seeing that it's just a gauge of volatility... to trade VIX you would need to trade VIX futures like VIXY or VXX*
CBOE:VIX
by dailytaguy