The Three Main Things That Happen at 86 Fibs.As some of you may know, I have a bit of an interest in how trend moves have historically formed and failed.
I am interested in the subject generally, with me having put a fair amount of time into just understanding the basic timeline of historic events, reading the different studies on market hypothesis' and checking how these perform or fail in the fat tail events, but when it comes to trading I have a few main interests.
--How can we approximate what zone a top would generally come if we're topping.
--How do we survive being early on that.
--How do we know it's wrong and we should flip long.
--The typical break/capitulation level for bear trends.
--Where we tend to bull trap from.
--Styles bull traps and market recoveries.
--How markets generally bottom after extreme events.
The answer all of those questions is an optimistic endeavour but these are the main things you have to understand to make it viable to be able to bet on the major turning points in these fat tail events and to be able to take exposure without going broke if you get it wrong. Be that trying to buy lows or fade highs.
During the last bear move we posted short analysis at the top, throughout and then posted the different possible bull traps while we were at the low. To this point, the general norms of the historic analysis have held up. Now, we're into the 86 fib which has tended to be a critical area for the trend decision.
In this piece I'm going to go through the main types of reactions we get here and how one can aim to make a plan that will be profitable in all types of scenarios.
Many of the things I'll be discussing are generic retracement rules and if you follow my work you'll know them from my 76/86 theories that I discuss regularly, but all of what I am about to cover here also checks out on the SPX chart. I have manually went through every single drop of over 10% in the SPX and then modelled the different rallies from there. Be them recoveries or crashes - these rules tended to be useful in most of them.
Let me start by giving a very brief history of my use of the 76/86 fibs. The original rules I had for this was a reversal should come just a little bit before the 76 fib. I'd buy/sell close to the 76 fib and use a 76 hit as my stop loss. These were great times. It would work a lot and it'd pay over 1:10 RR sometimes when it did.
Over time this became a little harder and I had to increase my tolerance zone for spikes above the 76. My rules then became to trade close to the 76 and if the 86 hit then I'd stop out because I think it'll go higher. Most of the time we pullback first, but the 86 hitting I used to class as a failure of the reversal.
This worked well (Albeit with reduced RR) for a long time but during the 2022 bear market this theory has significant failures with us tending to trade to the 86 and then put in full reversals. Given my bias is trade the reversal on the 76 and expect continuation if the 86 hits, this was a problem. My default rules would pick up losing signals on both sides. So I had make some further amendments to the idea in 2022.
I've used the general idea for about a decade in total now, with some minor adjustments along the way.
This framing is important because the general default rule I'd have here is now we 86 has hit we probably pullback a bit but it's a net bull bias- however, that strategy has weakened and I have to be a bit more agnostic now. Before, by this point I only have bull plans and ideas of how to stop out if I am wrong. With the new tendency for 86 hits, I need a bear plan also.
First we'll deal with the outcome that I find happens least often, the clean 86 break.
I hate this move. Be it on the upside or the downside I always find it easer to make money when something happens at the 86. I don't even care what. When it trends through I don't expect it because it only happens about 20% of the time and I can end up in a tricky situation where the market jumps from one resistance level to the next and I never want to buy and generally am bias towards fading the move - which can go really bad if the reversal thesis is wrong.
When this clean break is made it's usually built in a trending way. Higher lows in an uptrend. I've found the best way to deal with this risk is if there's any credible risk of the 86 breaking I start to buy all the dips when they're at deep retracement levels. What I "Think" will happen doesn't matter. I know if we head into the type of break I dislike I'll do poorly if I do not start to fade the 86 early. I'd rather lose one or two small trades trying this than end up in a situation where I find it hard to know what to do for months.
If we get back above the 86, this is the plan. Just buy all the dips until it fails. If it fails early I'll probably lose 2-3% over a few trades. If one trade works and I lose after I'll end up even. If they all work I'll end up with over 30% for my 3% risk. Although I do not "Think" this move is likely, when you can risk 3% to make 30% and cover yourself from the things that are tough to deal with - that's a good deal.
The most typical result in SPX history (and in general 86 theory) is we make a crash like move off it but this only goes to the 50 fib.
Very common. You'll find this in SPX recoveries from as early as 1920. Obvious ones after the 2008 crash etc.
This is a net super bullish setup but we'd be in for a drop of about 10% first. It's the most common outcome and if it was not for the need to edit rules due to stop hunting this would be the only main plan I had right now. The plan would be to trade this and everything else would be planning how to not lose too much if something else happened.
If the 5o fib breaks, we tend to capitulate to the 23 fib.
From here is a bit of a tricky spot because a lot of different types of things can happen but inside the context of the overall move we have, this could foreshadow a massive break. If and when we get there I'll discuss more about the tactical trading decisions one can make in this area.
I think for the bear thesis to have a chance we need to the monthly candle to close with a wick on the top. A drop of several 100 points into the end of the month.
Giving the size and speed I'd expect this move to be, it'd almost certainly be a news related move.
If that marker hits, then we'll discuss the decisions to be made into the support levels.
If we uptrend above the 86, then it's buy all dips until it stops working, review after.
But one thing is for sure, this is historically the riskiest spot to be short term bullish. Even in a bull setup, you're wrong 3/4 times on long entries here. In a bear setup, things get really nasty.
Bulls should be super careful if the 86 can not break. Bears should be careful if it does.
The historical analysis clearly shows if you make mistakes here on either side you can take crippling losses. No one should be overconfident at these prices (most people are though).
The bears have the edge for the next 10% under the 86 but if they are wrong there are so many different ways it can end up terribly.
Bulls are at the point where they should be most careful, but as it generally is - this is when they feel bulletproof.
Interesting spot.
For my part, I plan for everything and trade what happens.
Being profitable is more important than making bold and clever predictions if you do this for a living.
SPX trade ideas
SPX The market selloff today was driven by a sharp rise in Treasury yields following weak demand at a 20-year bond auction, signaling investor concerns about U.S. debt and fiscal policy. Moody's recent downgrade of the U.S. credit rating, fears over unsustainable government spending.
If we don't hold around 5866, there's a risk of deeper selling pressure pushing us toward 5774
Super-cycle top in? I was considering that we had an extended wave 1 from march 2009 to feb 2020, the wave 2 bottom was march 2020, then wave 3 top was jan 2022, wave 4 bottom was oct 2022 and now we are on wave 5. This would be an extended wave 1 instead of wave 3 and that means wave 3 & 5 should be equal and with the current top that would put them within 1.1% of each other. This also fits with the alternating pattern with wave 2 being quick and simple and wave 4 being long and complex. Thoughts?
Wick Tricks at Highs Based on conventional wisdom the SPX monthly chart looks super bullish with the big wick.
I want to explain how this can be misleading. For some "Creds" on the idea, I've attached a post made at almost exactly the low where I forecast the wick and spikes while stating this could be inside of a bearish setup. In the bearish setup, we'd often get bad news around this price.
These candles can be bullish, of course - I don't think I need to insult your intelligence by explaining the bullish read on these candles. You know them.
But did you know you also see one of these in almost every major top in history?
I just posted almost every notable drop from 2008 to 1966.
Here's a recent one.
I could go and start posting examples from the 1910s, but I hope I've made my point.
If it's a wick trap at a top, we generally will see a capitulation month within 3 months.
Usually, it'd be next month with this month closing weak to make a wick on top.
Spx500usd up? 1min chart at 23h London time?As it is , all I hope is that spx 500usd starts here at that blue line, after all, if it starts at the blue line the stock as might be up again, I'm not into the fundamentals by this time, I'm just making some Elliot and indicators-some mine, others don't, and trend analysis
Hope u guys all in profit
After all we all looking for the same
Keep Ur trades safe
And Do Always Your Own Research
DAYOR
Keep it safe
This my my graph at 1min candles, returned to 15min chart
Keep it safe.
And keep cool.
Is Trump Triggering a Mini Market Crack to Drive Capital into Tr📉 Is Trump Triggering a Mini Market Crack to Drive Capital into Treasuries?
Recent remarks by former President Donald Trump — including threats of 50% tariffs on EU goods and pressure on Apple to manufacture domestically — have sparked sharp red moves across the U.S. markets.
Which leads to a serious question:
👉 Could this be a deliberate strategy to induce fear in the stock market and push both institutional and retail money toward U.S. Treasury bonds?
In a context where the U.S. government needs to issue and absorb massive debt, and where yields are rising to attract buyers, a sell-off in equities might:
💰 Boost demand for Treasuries
🔥 Justify aggressive fiscal or monetary actions
🎯 Reposition political actors as “economic saviors”
I’m not making claims — just thinking out loud...
Are we witnessing a calculated move to reroute capital from equities into U.S. debt, using fear as the vehicle?
What do you think — coincidence… or strategy?
SPY ready to continue its up-trend?!?Now that price has pulled back, we’ve seen a reaction from the daily 20 EMA, forming what resembles a hammer candlestick. This could signal that the uptrend may be ready to resume.
That said, Monday will be key. If the market continues to show strength, it may confirm a continuation to the upside. But if price drops instead, we could be in for a deeper pullback.
⚠️ Remember: just because we’re in an uptrend doesn’t mean the market can’t reverse. The market is unpredictable, and that’s why reacting to price behavior at each point of interest (POI) is so important.
Stay flexible, manage your risk, and trade what the market shows you, not what you expect.
SPX500 Quick Market Outlook – May 23, 2025 | 15m ChartPosted by Wavervanir_International_LLC
Today's session shows bearish continuation patterns despite a temporary bounce. We're currently trading just below the equilibrium level, with price rejecting from the 0.5 and 0.618 retracement zone. The bearish OB (Order Block) above continues to act as a ceiling.
🔍 Key Observations:
Price action is forming lower highs under resistance.
Volume profile and Smart Money Concepts (SMC) suggest distribution near the 5787–5794 zone.
Break below 5766.41 (daily ORB low) could open the path to 5721.75 – 1.618 extension.
Bullish invalidation only above 5793.80, where price would regain control above the mid-FVG and EMA cluster.
⚠️ Watch List:
Key levels: 5787.44 (pivot), 5761.17 (support), 5721.75 (target)
Bias: Bearish unless price reclaims 5795+ with volume
Trigger: Confirmation via 15m candle close below 5766 and breakdown in volume structure
Stay adaptive. The market structure is still forming, and liquidity sweeps can occur.
The Bullish view under ELLIOT WAVE top of 3 6181/6235Based On what has been happening in the structure in The SP 500 I tend to think the sp cash sees a retest at 6417 or extend the rally to 6181 alt 6230 for the top of #wave 3 or Wave B . both should see a 350 point decline back to 5830/ If 5 is equal to One a 646 point rally should be seen in wave 5
Risk-Off Mode: Indices Under Pressure, VIX Breakout in Play!🌍 Indices Under Pressure as Volatility Spikes – Market Analysis (May 22, 2025) 🚨
My TradingView multi-chart workspace is tracking major global indices alongside the VIX (bottom right). The visual tells the story: broad-based selling is hitting equities, and the VIX is on the rise, signaling a clear risk-off environment.
Key Observations:
Indices in the Red:
All major indices in my workspace are under pressure, with sharp declines across the S&P 500, NASDAQ, Dow, DAX, and others. This aligns with today’s global heatmaps, which are flashing red across sectors and regions. The selling is broad, not just isolated to tech or cyclicals.
VIX Volatility Index Elevated:
The VIX (CBOE Volatility Index) is spiking, up over 15% today and holding above the 20 level (FXEmpire). This “fear gauge” confirms that traders are hedging aggressively and bracing for more turbulence. Historically, a rising VIX alongside falling indices is a classic sign of heightened uncertainty and potential for further downside.
Macro & Geopolitical Backdrop:
The selling pressure is fueled by persistent US-China trade tensions, new tariffs, and a lack of clear central bank support. The White House remains firm on its trade stance, while the Fed is not signaling imminent rate cuts (VT Markets). This policy vacuum is amplifying volatility and risk aversion.
Global Sentiment:
Asian and European markets are also deep in the red, with historic single-day losses in some indices. The “Magnificent Seven” US tech stocks have entered bear market territory, and even traditional safe havens like gold are seeing some liquidation as investors scramble for cash.
What’s Next?
Short-Term Outlook:
With the VIX elevated and indices breaking key support levels, expect continued choppiness and possible further downside. Macro data releases and any shift in trade rhetoric will be key catalysts. Defensive positioning and risk management are crucial in this environment.
Potential for Rebound:
If we see a de-escalation in trade tensions or dovish signals from central banks, a relief rally is possible. But for now, the path of least resistance appears lower, with volatility likely to remain high.
Summary:
The charts don’t lie – indices are under heavy selling pressure, and the VIX is confirming a risk-off mood. Stay nimble, watch for headline risks, and be prepared for more volatility in the days ahead. 📉🟥⚡
Index Reversal in PlayThe index has started a decent move downward. Right now, a solid short entry setup is forming. The price is near strong resistance, reversal patterns are emerging, and the overall market context supports a short position.
The first target is 5675.
In an optimistic scenario, we could reach 5400.
$SPX Weekly – 2025 Trendline Bounce Confirmed Again📈 The S&P 500 ( VANTAGE:SP500 ) just bounced cleanly off the long-term trendline that has defined this bull market since the COVID low in 2020.
🟢 Touchpoints:
March 2020 🦠
June 2022 (inflation bottom)
October 2023 (Fed pause)
Now again in 2025
That’s four successful tests in five years. Price action suggests that this trendline remains the key support for bulls — as long as it holds, the trend remains intact.
But if it breaks in the future… buckle up.
US500: Bullish Trend Holds Despite Moody’s DowngradeUS500: Bullish Trend Holds Despite Moody’s Downgrade
On Sunday, Moody’s downgraded U.S. debt to AA1, citing rising interest costs and unsustainable debt growth. They noted that U.S. debt funding costs are much higher compared to similar economies, with interest payments significantly exceeding those of similarly rated countries.
At the market open on Monday, US500 dropped from 5959 to 5874, losing nearly 1.40%. While this downgrade was expected to have a bigger impact, the index quickly recovered, reaching a new high of 5972 after the U.S. market opened.
Despite the initial dip, US500 remains in a strong bullish trend. Unless a major event shifts market sentiment, the index is likely to continue rising. Even if small corrections occur, the overall trend is still intact.
You may find more details in the chart!
Thank you and Good Luck!
❤️PS: Please support with a like or comment if you find this analysis useful for your trading day❤️
Temporary euphoria fades, a sharp correction is likelyThe current index surge appears increasingly disconnected from core fundamentals. Markets have been brushing aside key economic data, rallying instead on short-term sentiment and speculative flows.
⚠️ Once this temporary momentum fades, I expect a pullback to 4800, with a possible extension toward 3900 if macro headwinds intensify. This setup reflects a growing divergence between price action and economic reality—something that rarely lasts.
If We Break Here, Trend Decision is Likely Around 5500.I've recently posted various different bullish considerations for breakouts because given the macro context of where we are, if these are made they could be extremely strong.
However, at the exact moment in time we're still trading right at a major resistance level. We trade at the 86 fib. Historically, SPX pulls back from here about 80% of the time. Usually a correction, some have become crashes.
If we uptrend above the 86 - this is extremely bullish bias and the plan is buy all dips betting on the local trend structure to hold. Getting out as soon as there's not flawless higher lows on the dumps.
We have traded a tiny bit above the 86 recently but if we do not break it again then the chances of a 10% drop are strong.
At this point SPX could easily drop to around 5900 in the bullish move. That'd be expected at this point I'd say. Part of a simple trend development- but if the 5900 level breaks, then we're likely heading down close to 5500.
The 5500 forecast is the bullish forecast.
In the event of us seeing this month closing down with a big wick candle above it and then us making a bear break - next month could be a huge bearish engulfing candle.
We really are at a very interesting spot.
Sized up on various different types of bear bets here at 5940.
If we continue to see local uptrend I plan to buy all dips and trail stops and hopefully this could build into what may become a sensational breakout. But if supports start to fail - I do not think this is going to be a drop to be buying. I'll be extremely bear bias on the breaking of 5870 or so = and in terms of the RR on the move, the bear bet now is optimal.
Big decisions to be made in this area. We must be close to them.
Why You Shouldn't "Hope" for Bear Markets.A lot of the underlying TA analysis to support this is contained in my other post about the 4.23. It's recommended you read that first to understand context.
Click below;
This isn't an analysis post. In this post we won't be dealing at all with the idea of if you should expect, plan for or take steps to protect yourself against bear markets. We're going to focus solely on the fact some people really want it. They want it bad. You can tell by how extremely excited they get whenever there's even a mild hint it will happen.
Some people think I want this. They say the funniest of things. The amount of times I've had someone say something like, "Don't worry there will be a crash (some variation of "But when I say so" usually goes here) - which silly concept. The idea I "Worry" there will not be a crash. That I have a thesis in which millions of people get hurt, but at least my idea was right.
If you understand the scope of things that happen in a true bear market, to think this way is very shallow and selfish. People are liable to lose everything they worked their whole life for. Families losing security. Kids can end up on the streets. It's a dire tale - and to hope for this to happen just so you can say "Told you so" is a terrible way to be.
There are two good reasons as a trader you may want the market to go down.
1: Volatility. Markets get faster on the downside and if you're good, that means more money.
2: Benchmark beating. Unleveraged it's hard to beat SPX in an uptrend. Pullbacks help, a lot.
Both of these are now what I'd consider largely invalid reasons. They were good ones to have before but now we have massive volatility on both sides. We're inside an expansion of volatility which will likely continue whether we go up or down.
On benchmarking, it's important if you're in the asset management game but at this point you should be so far ahead of the benchmark that it's irrelevant. Good active traders at this point should be streets ahead of passive investors and passive investors should not even know it because we're back at highs and they think that means they have optimal performance. What they think doesn't matter, you can show people with money your results and being so far ahead of the benchmark greatly benefits you.
At this point in time you can be suitable ahead of the benchmark on a risk adjusted basis and have the prospect of heading into hyper volatile markets where you can make a fortune on either side. And if you're not in this sort of situation, you're not going to make a lot of money in a bear market - anyway. You probably have too strong a leading bias on the bear side which has led to you round tripping gains and even in a sustained bear market this same thing will happen in the bear market rallies.
A prominent reason some people hope for a bear market is simply want to see bulls fail. It seemingly annoys them no end to see other people doing well by doing something they think they should be punished for. While they often won't outright admit this, it's clear in the tone of how they speak. The way they celebrate any time someone bullish might have maybe lost some money - and they are eager to tell you how they are going to go broke in the next leg.
This is a bad way to be. In life. You should not be too bothered about what other people are doing. How they get on with that. And you should not expressly hope people fail and suffer just because they have a different idea of market analysis from you. It's not a healthy way to be. It's bitter and caustic - and that isn't stuff you want to cultivate as personality traits.
You can spot people who are like this easily. They'll generally dress it up as "Warning people" but it's not warning people when you cheer and jeer if the bad thing happens to them. That's called "Gloating" and if you were really interested in the helping of people, you'd not gloat. Indeed, the bad thing happening to them would be consider a failure on your part. Your warning sucked and no one listened.
When it becomes stupidly obvious what motivates these people is when the market goes up and they get mad. If this happens, you're not "Trying to help". You are hoping they will fail so it validates yourself in some way. Which is bad ... You want to address that and find a way to validate yourself without needing others to suffer for you to have "Told them so".
If the 4.23 thesis is correct them whatever way to market resolves there's liable to be a mega trend. If you're in the game to make money - which way is better. Up or down?
It's up. Clearly. Because when the market goes up your risk is contained to things like fraud and malpractice with your counter parts. You bank and broker are only going to go under if something extremely shocking is unearthed. In a downside market, it only takes one thing to have a problem and through the magic on contagion all of your banks and brokerages now have a problem.
You know what problems with banks and brokerages mean? They mean you put effort into making money you might not get. It's not the thing to be "Hoping" for. Is it?
It's really dump, to be blunt about it.
When you drill down into it the two main reasons people want a bear market are they don't like seeing bulls succeed and they want to be able to say they got it right. That's the bottom line with most bear forecasts. And you can always tell because they'll be upset if the market goes up.
The other is basic ideology of how markets "Should act" but this is basically just hoping the bulls fail and also generally totally detached from the reality of how markets have always acted. Markets have never acted "As they should". Never in 200 years. Why show up now and moan about it?
These things are all entirely non important. When you weigh them against the known outcomes of bear markets. Millions of people suffering. Risk to financial structures. Increased chance of slippage and gap events in the market making it hard to understand and control risk. Just so you can "Be right". Or just so people you don't know can suffer because they did something you didn't do and you're not happy that went well for them.
At the risk of repeating myself ... not a good way to be.
There used to be a bit of a good reason when it comes to social media because sites like this have become increasingly less useful/interesting as the uppy markets continue. More and more we have the future knowers that will insist you use their ideas. You may not even discuss your ideas. If you do, you should be mocked and branded as .
While a solid bear market would bring an end to this we'd run into a couple problems. One - the bears would take their place. We seen this at the April lows. When I posted bull analysis at the April lows bears showed up with all the same tone and noise of bulls when you post into resistance. Like the bulls, if they're right they come back to tell you how stupid you were and if they're wrong you'll just not see them again until they're right. Where they'll come back to remind you how stupid you were, even if you've already banked profits on all your ideas at this point.
This is mildly annoying but it's not the sort of thing that you should pick global disaster over. All you have to do is just not read the comments. Granted .... the fact you have to post analysis that's the popular idea here or you should not bother reading the comments because it's be full of childish nonsense isn't ideal for social networking. It doens't make these kinda place "Fun" places to be. But it's better than the wipe out event.
And now even the wipe out event will not significantly improve the content one should expect. It used to be the case if there was a wipe out event then most of the people posting would be -people who have some deep experience trading either side of the market and can offer insightful ideas.
In the previous drop we seen how this will play out now. People will not know what they're talking about but rather than let that slow them, they'll just get ChatGPT to write the post for them. And it will be entirely standard and predictable posts. Most of the "Bear market analysis" I seen in April can be duplicated by putting about 6 words into ChatGPT.
If I can prompt ChatGPT and read your post - why would I read your post? I can ask ChatGPT the same thing. Can ask for more detail. Give more context. Chat back and forth about different outcomes. Or I can come to social media and read the same 5 bulletpoints over and over again. It's not hard to see which is more interesting.
So even the idea that we'll have more interesting content from more objective traders is largely out the window now. We'll probably just have generic ChatGPT posts.
"Hey ChatGPT, write me an essay on tips to trade a bear market".
That's how most of the bear analysis in April was written.
All in all, the only two reasons people hope for bear markets at this point is ideology and ego. Both are things you should leave at the door when you enter the market.
Whether it will happen or not is something yet to be determined, but it's not something to hope for.
Although I will say this, if the 4.23 breakout comes I think sites like this will become essentially unusable for people interested in discussing strategy, odds and contingency planning in markets. It kinda already is and it would get much worse. Unless you want to post, "I too agree with the popular idea" you may as well not post.
And if everyone is posting the same thing, you may as well not post.
But these are small prices to pay to know your broker is probably going to stay in business.
S&P500 Steady Channel Up to 6100The S&P500 index (SPX) has been trading within a Channel Up pattern from the moment (April 22) it broke above the 4H MA50 (blue trend-line). For that 1 month period, it has held the 4H MA50 and that maintains the bullish trend, generating Bullish Legs to High after High.
The last two Bullish Legs have increased by +4.92%, so as long as the 4H MA50 holds, we expect the current Leg to be completed at 6100.
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US500 | Potential Wyckoff Reaccumulation UnfoldingThe US500 appears to be working through a classic Wyckoff reaccumulation phase following a strong rally during price mark-up. After a swift move upward, price formed what looks like a Buying Climax , followed by an Automatic Reaction (AR) and now an Upthrust at the recent highs.
So far, volume and delta behavior are aligning well with this. During the upthrust , we saw increased volume, but delta turned negative, indicating selling pressure into strength. This was also accompanied by a CVD divergence, showing that although price pushed to new highs, the underlying buying wasn't supporting the move just yet. That often hints distribution by strong hands as late buyers step, likely fuel by the good ol' Trump Pump.
With that in mind, a pullback into the lower range is expected to create the Secondary Test (ST) . This could lead to a possible Spring , a shakeout below recent support (around the 5700–5720 zone) meant to trap sellers. Ideally, this would be followed by a Test , where price returns to the Spring zone on lower volume and stronger delta/CVD confirmation, signaling demand returning and absorption of supply. But this is all to be determined.
This doesn't have to play out exactly as I mapped. But if we see something similar play out, it would lead to higher prices and confirmation of the mark-up phase. Until then, patience is key, this phase of the structure is about traps and tests, not breakouts.