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SPY: Don’t “Guess” the Top.We can learn a very interesting lesson by looking at the SPY chart. Anyone who tries to guess the next top or bottom is a gambler, not a trader, and as someone who has gambled a lot in the past, this rally brings back some memories. It's very easy for someone to see such an explosive movement and think: "It's already gone up a lot, it's going to have to come down soon". It's very easy to look for clues in other indicators, for example, and get excited when you see the RSI exploding close to 70. Looking for clues that reinforce a pre-existing belief is common among individuals corrupted by the "confirmation bias", which is something else, and would be content for a future article. Still talking about the RSI, it's important to mention that the RSI was already at 70 when the price was at $450. Since then it has risen by more than $20 (approximately 5%), and there is no sign of a top yet. Far from being a criticism of such an efficient indicator, this is just evidence that the use of indicators should be aligned with what we see on the chart. Top or bottom signals are confirmed when we see a clear breakout from a notorious reversal pattern. As we can see from the SPY chart below, just one or two bearish patterns, even when appears close to clear resistance, is not enough. There needs to be confirmation of a good breakout. Perhaps this is one of the reasons why so many are rushing to sell a possible top, even without confirmation. By waiting for confirmation, you sacrifice part of your profits, and amateurs hate that. To feel like a pro, you have to feel the satisfaction of buying the bottom and selling the top, all the time. Which is ironic, because that's not the focus of a professional. A real trader seeks long-term consistency. Speaking for myself, as far as I can see it's a strong rally in the SPY, and the next resistance is the all-time high at $479.98. So far, there is no clear reversal pattern for me, although I personally would like to see a correction to a support point. What if the SPY made a bearish candlestick pattern today? Just as we see on November 9, 15 and 29, and on December 6, a top signal is plausible, but we need to wait for confirmation via a breakout. Otherwise, it would just be another bear trap. Another thing I like to do is wait for a clear bearish reversal structure to appear on shorter time frames, such as the hourly chart. Uptrends are characterized by rising tops and bottoms, and the reverse applies to downtrends. When a stock is in a clear uptrend, but the hourly chart suddenly makes a lower top and bottom, it's a warning sign. If such a reversal occurs near a resistance area, all the better, as was the case with NVDA at the end of last month. One of the most overlooked principles of Dow Theory is the number 6: "Trends Persist Until a Clear Reversal Occurs". When Charles Dow, founder of the Dow Jones index and the Wall Street Journal, began working on the principles more than a century ago, he never imagined that in the 21st century there would still be traders who anticipate and don't wait for confirmation (again, I was among these gamblers in the past). Therefore, trading reversals is interesting and can be very profitable, but you need to base your decisions on technical reasons. I shared how I like to trade reversals, but there are more strategies that you can use. Feel free to share yours. That's the difference between a gambler and a trader. Moreover, remember to follow me for more content like this, and support this idea if you liked it! All the best, Nathan.
AMEX:SPYEducation
by Nathan_The_Finance_Hydra
9
SPX: Dangerous Correction - What's Next?• The SPX has been correcting since it hit our target, the technical resistance around 4,170, but it seems it is stabilizing above the 21 ema; • We set this target on my previous analysis (the link to my previous public analysis is below this post, as usual), before the SPX confirmed its bottom, when it was still below the 21 ema in the daily chart; • Now we see a bullish reaction above the 21 ema, which is a bullish sign, however, the 1h chart suggests that a bullish reversal won’t be that easy: • The SPX is struggling to break the 21 ema, which is working as a resistance level, short-term speaking; • If this resistance works, and we see a top sign confirmed, the index could correct to lower levels, like the 4,049, the next support line in the 1h chart; • In order to see a bullish continuation to the 4,200 it would be good to see the SPX breaking the 21 ema in the 1h chart, and doing a clear bottom signal in the daily chart as well; • For now, there’s no clear bullish reaction, so let’s wait for more confirmation. I’ll keep you updated on this. Remember to follow me to keep in touch with my daily analysis.
SP:SPX
by Nathan_The_Finance_Hydra
TSLA: About to Explode (again).• TSLA finally hit our target at $200, and it seems it wants to break it today; • In this scenario, the trend will remain bullish, and it’ll seek higher levels, until we see a top / reversal sign. Either way, the next resistance is $237 - that's our next technical target; • A pullback would be good, but TSLA isn’t giving any sign that it’ll correct right now. If it does a clear top sign under the $200, then we might think about a correction; • Even if it corrects, there’s a support at $182.50 (red line), and wouldn’t be easy for TSLA to lose it; • Eventually, TSLA will correct – but not today, it seems. I’ll keep you updated on this. Remember to follow me to keep in touch with my daily analyses!
NASDAQ:TSLA
by Nathan_The_Finance_Hydra
13
TSLA: Big Move Ahead.• TSLA is struggling under the resistance at $200; • This doesn’t mean that TSLA is poised to correct or reverse, as there’s no top sign on it yet; • Right now, TSLA is in a “no man’s land” between the $182 - $200; • Only if TSLA loses the $182 we might see a sharper correction to lower levels – remember, since it is a bull trend, corrections might be opportunities to buy/add position. As long as TSLA remains above $182, no correction will occur; • On the other hand, if TSLA breaks the $200, then the bullish bias will persist, and the next technical target is the $237; • Either way, if TSLA corrects, now would be a good time to see a top sign, since we are under a clear resistance. Let’s see how it’ll react today. Remember to follow me to keep in touch with my daily analyses!
NASDAQ:TSLA
by Nathan_The_Finance_Hydra
5
SPX: Hit a Key Resistance! What's next?• The SPX hit its key resistance at 3,900 and it failed in breaking it; • This is a sign of weakness, and by confirming a top sign under its resistance, a pullback is very likely to occur; • The next support area on SPX is around 3,780 – 3,760, around the 21 ema and the previous top level seen on Oct 18 (red line); • For now, let’s keep these support and resistance levels in mind. The index must react as soon as possible in order to avoid a correction, and if it breaks the resistance, the next target would be the 4,100 area. Remember to follow me to keep in touch with my analyses!
SP:SPX
by Nathan_The_Finance_Hydra
2
UBER: A top signal under a resistance? Post-Earnings analysis.• UBER is doing some interesting technical movements, even with the increased volatility after earnings; • UBER went up just to hit the previous resistance at $30.24, a previous support from Oct 06; • While I’m writing this, UBER is trying to do a Shooting Star candlestick pattern, a top sign; • If UBER confirms a top sign, just under a resistance area, then we might expect a correction; • Therefore, if UBER corrects to its 21 ema around $27 - $28, it won’t be a huge surprise; • In order to avoid this, UBER has to react as soon as possible and break the $30.24; • If UBER breaks its resistance, the next target would be at $33.38 (green line). Remember to follow me to keep in touch with my analyses!
NYSE:UBER
by Nathan_The_Finance_Hydra
3
$BTC and #ALT coins idea: Identifying the end of the bull marketI've been getting questions from a few friends and people about when the "top" will be in and what my plans are to try and be part of the "smart money" that sells the top and buys the bottom. Now first let me be clear, if anyone knew when the top and bottom were going to be? They'd be the richest person in the history of time... but that's the point; No one knows when the top or bottom will happen, so we have to go off of what we know! One great way to look for the changing winds in the market cycles is to look at history and see some patterns that might have shown themselves. In these two charts, we're looking at the weekly $BTC price action, and the historical XLM cap. The point is so that we can see when the TRUE #altSeason actually happened, and to notice something interesting about it. In the weeks of Dec 18th, and 25th, 2017, and Jan 1st 2018 bitcoin had reached its all time high of $19,891.99, and subsequently corrected in the following week to $10,400.00, and then pumped back to $17178. During that three week period XLM's market cap increased from 2.5 billion to 17.5 billion dollars. IN 3 WEEKS!!!! THAT my friends was the first real #Altseason! and one of the greatest opportunities ever to sell the top. However, a TON of people didn't pay attention, and in their euphoric state thought to themselves "this will keep going up forever!!! Everyone is going to get rich!!!" The point I'm trying to make here, is that history doesn't always repeat itself... but it often rhymes. I personally am committed to NOT holding a bunch of bags of prospective alt coins, and I will be looking for this blow off top, and the following couple weeks as real opportunities to cash out of my bags and sell into the euphoria. I'll be holding on to most of my $LINK for staking, as I don't care what price it goes to in the next 5 years. I'm hyper bullish on the need for decentralized oracle networks and Chainlink is the solo mover in that market and they've also built a fantastic network to boot. I think their partnerships alone speak the truth of that. I will also be holding ALL of my $BTC. I'm never selling that, as I would like to avoid the tax consequences of that, as well as avoiding getting stuck holding a hyper inflating USD. Plan ahead, do your research and don't be consumed by greed, and you'll make it fam. We're all gonna make it :).
CRYPTOCAP:XLM
by its_maxbro
11
5.24 to 1 Risk/Reward Euphoric topping formation (short) + PutsBuy low sell high, but don't forget to sell high. Its expensive. This one should be more straight forward, its the final version of this but I may have to edit comments $10,000 of risk for $55,000 of reward. The put options intended for this trade are spread between the strike prices below 260 but we will have more details to follow. I have been waiting to publish this as it would seem too dangerous to short or buy put options in a stock that trades in 4 to 5 point ranges and consistently raises the ceiling nearly every day leading up to and past earnings. The average true range of this stock has been way out of proportion and even though the news has been better than expected it technically looks like one of its prior blow-off tops. There may not be the right day for this currently, but as of Thursday we might get confirmation of the early signs of a turn-around - that is a bearish reversal signal that is confirmed. Here is the logic, for a 4-week put option trade it would make sense to get long puts and scatter them through different strike prices from 260 to 240 and hold them into December and January. We declared this trade at 1000 shares, so that we would first preserve capital by risking at most $10,000 and possibly receive a reward of $55,000. There are no references for past resistance or overhead supply, but we'll take it at 275 being the last possible price point at which someone would be willing to buy this. The hardest thing is calling the top or calling the bottom, hopefully our patience has paid off and these will be the juiciest puts of maybe even a decade.
NASDAQ:AAPLShort
by DamianRichardson