S&P500 resist 5600An area of interest for bears to start selling. Economic data seems to be turning south.
SPX500 trade ideas
S&P 500: New ATH? 59% Chance!Economic Resilience: The U.S. economy continues to show strength, with robust job growth and consumer spending supporting overall market performance.
Technological Advancements: Ongoing innovations in AI and other tech sectors are driving productivity gains and creating new growth opportunities for many S&P 500 companies.
Corporate Earnings: Many companies are reporting better-than-expected earnings, indicating strong business performance and potential for further market gains.
Global Recovery: As international markets stabilize, U.S. multinationals within the S&P 500 are benefiting from increased global demand and improved supply chains.
Monetary Policy: While the Federal Reserve remains vigilant, there are indications that the interest rate hiking cycle may be nearing its end, potentially providing a more favorable environment for equities.
Using the X1X2 strategy, I'll be looking for optimal entry points for long positions.
Let's dive into the comprehensive top-down analysis together.
12M:
2W:
3H:
Please feel free to share your thoughts and suggestions!
S&P 500 Bearish Trade Plan 3-4 weeks
Overview:
The S&P 500 is showing a potential bearish setup over the next 3-4 weeks based on fundamental economic data, seasonal trends, and market positioning. Combined with technical analysis, this trade plan outlines a short bias, with key profit targets at significant market levels.
Fundamentals:
Several key factors suggest potential downward pressure on the S&P 500 in the near term:
Inflation Concerns:
Inflation continues to remain above central bank targets, which could force the Federal Reserve to maintain a hawkish stance.Rising interest rates and reduced liquidity in the markets have traditionally led to reduced corporate profitability and weaker stock market performance.
US Consumer Spending:
Recent data has shown signs of slowing consumer demand as rising interest rates and inflation weigh on disposable incomes. This weakening consumer sentiment could negatively impact corporate earnings, leading to selling pressure in the equity markets.
Global Macro Factors:
Global supply chain issues, geopolitical tensions, and the potential for further economic slowdowns in Europe and China could exacerbate downside risk in equities. The S&P 500’s exposure to global markets could act as a drag on performance.
Earnings Season:
Many companies are adjusting their forward earnings estimates lower due to weaker demand and increased costs. This negative earnings guidance could contribute to further downside in the index.
Seasonality:
Historically, September is one of the weakest months for the S&P 500, and this trend has been amplified in recent years. Here’s a closer look at the data:
5-Year Performance: Over the last five years, September has seen an average decline of -49.9788 points in the S&P 500. This is a significant drop compared to other months.
2-Year Performance: The two-year average shows a massive decline of -180.7979 points in September, reflecting the market's extreme vulnerability during this period.
These seasonal trends suggest that traders tend to adopt a risk-off sentiment during September, likely due to various macroeconomic concerns, earnings reports, and upcoming policy announcements.
The historical performance implies that we should expect a bearish bias for the rest of September, with potential for recovery in October and November, which are typically stronger months for the S&P 500.
COT Data (Commitment of Traders Report):
The latest Commitment of Traders (COT) report supports the bearish outlook, as market participants are positioning for potential downside:
Commercial Traders (Smart Money):
Net Short Position: Commercial traders, typically hedgers and large institutions, are heavily net short with a -29,163 net position. This indicates they expect downside risk and are hedging against a drop in the market.
Large Speculators:
Speculators, often trend-following hedge funds, hold a significant short position as well, with a net short of -81,908. This reflects an alignment with commercial traders and suggests that sentiment among speculative traders is also bearish.
The combination of commercial hedgers and speculative traders holding bearish positions is a strong confirmation of the downside risk.
Technical Analysis:
Key Levels & Market Structure:
Weak High:
The recent price action shows the S&P 500 forming a weak high near the 5,700 zone. This failure to create a higher high suggests that the bullish momentum is losing strength, indicating a potential reversal.
Premium Zone (Resistance):
The price has rejected the premium zone between 5,650 - 5,700, signaling that the market may struggle to break higher. The rejection suggests that sellers have stepped in, adding further pressure to the downside.
Break of Structure (BOS):
The Break of Structure (BOS) earlier in the chart confirms a shift from a bullish to a bearish trend. This structure break strengthens the case for continued downside momentum.
Equilibrium (Fair Value):
The equilibrium level around 4,935 represents a natural profit target for short positions. This level is key as it reflects the balance between buyers and sellers and is where the price could consolidate or rebound after a bearish move.
Discount Zone (Support):
The discount zone between 4,164 and 4,701 acts as a strong support level. Should the bearish trend accelerate, this area would be an ideal target for taking profits or watching for potential bullish reversal signals.
Trade Setup:
Entry:
Short the S&P 500 around the current price level (5,650 - 5,700), as the price has rejected the premium zone and formed a weak high, signaling the potential for further downside.
Stop Loss:
Place a stop-loss above the premium zone at 5,700 to protect against a breakout higher.
Target 1:
Equilibrium zone around 4,935.9 for the first profit target.
Target 2:
If bearish pressure continues, hold the position towards the discount zone between 4,164 - 4,701, where stronger buying interest is likely to emerge.
Risk Management:
Risk/Reward Ratio: Aim for a 1:6 risk-to-reward ratio, given the significant downside potential.
Position Size: Limit risk per trade to 2-3% of your account balance to manage potential volatility.
S&P 500 - Fan Reversal Setting UpThe S&P 500 is forming a Base below the Supply Zone.
A Fan is apparent from the origin of the Rally. Three ascending trendlines connect to price action within the base.
The Fan reversal begins to set up once price crosses/breaks the 3rd trendline. Price action will be contained within the consolidation, with a possible false break
If you look to Volume and Momentum, both show a progressive divergence is in play and are bearish signs.
The trigger to short is a clear break of the Support Level at 5560.
The bias is for a small correction only (.382 fib), before a break to a new ATH.
S&P500 INDEX (US500): Important Bearish Signal
US500 was consolidating for quite a long period of time around
the level of a current all-time high and formed a range.
After the release of the yesterday's US fundamentals, the Index dropped
and formed a high momentum bearish candle.
A daily candle closed below a support of the range, confirming its violation.
We can expect a bearish continuation lower now.
Next support - 5432
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Market 101:From the Drama King VIX to the Steady Eddie UtilitiesVolatility Index (VIX) - The Drama King
Let’s kick things off with the Volatility Index, aka the market’s drama king. It’s like that one friend who always makes a big deal out of nothing—spiking dramatically whenever the market so much as sneezes. Recently, it shot up faster than a caffeine-fueled trader on Monday morning, but now it’s calming down a bit, hovering around 20.73. Keep an eye on this guy—he’s always a sign of market anxiety like I said, the the fear gauge. If he starts climbing again, it might be time to batten down the hatches.
Utilities Sector (XLU) - The Steady Eddie
Moving on to the Utilities sector, which is the market’s equivalent of your reliable, always-on-time friend. XLU has been climbing steadily, but just like every other reliable person, it needs a break sometimes. It’s currently chilling around 76.20, looking like it’s taking a well-deserved breather. Nothing too exciting here, but that’s exactly what you want from Utilities—slow and steady wins the race.
ARK Innovation ETF (ARKK) - The Wild Child
Now, let’s talk about ARKK—Cathie Wood’s wild child. This chart is like a rollercoaster at an amusement park: up, down, up, down, and sometimes you’re not sure if you should scream or cheer. After some wild moves, ARKK is sitting around 42.98, but don’t be surprised if it decides to take another loop-de-loop soon. Just remember to strap in and hold on tight.
Technology Sector (XLK) - The Overachiever
Next up, the Technology sector, which has been the market’s overachiever for quite some time. XLK had been climbing like it’s trying to win the market’s gold star, but recently it’s hit a bit of a speed bump, pulling back to 210.28. No worries though—this sector is like that student who’s always doing extra credit. It’ll likely bounce back in no time, probably while giving the rest of the market a lesson in resilience.
Consumer Discretionary Sector (XLY) - The Big Spender
Finally, we’ve got the Consumer Discretionary sector, which is the market’s big spender. XLY has been on a shopping spree, but it looks like it might be hitting the credit limit soon. The chart shows some clear support around 184.61, but if it breaks below this, we might see some belt-tightening ahead. Keep an eye on it—everyone loves a spender until the bill comes due.
Summary: From the dramatic spikes of the VIX to the steady climb of Utilities, each of these charts has its own personality. Whether you’re dealing with the rollercoaster that is ARKK or the disciplined overachiever in Technology, there’s always something to learn from the market’s diverse cast of characters. Stay sharp, keep your sense of humour and energy, and remember: in the markets, as in life, it’s all about balance.
Likely Route For SPX Good day and or evening my fellow traders and followers!
Hope you all have been on the right side of the tracks with your trades so far and are well into profits $$$
I want to share with you what I believe is the continued route for SPX on the Oanda platform.
Once price breaks 5493 area, we need to see if we break through 5435.1 area. Next route on hit list brings us down to the beginning of a wide buy zone starting at 5299.5 to 5177.8. This would be the area we could see bulls step up and buy into. As time will tell how that plays out and if there would be enough bull participation to stop the selling.
Let the higher TF charts guide away any confusion regarding direction to take , just stick to trend if you use trading to pay your bills. Trickle out profits in percentages of at least 25 or higher at each resistance area to ensure cashflow.
Until next time, best of luck in all your trades $$$.
S&P outlook Using channel and fib extension to estimate the market top
- Idea - Not financial advice
US500 bullish analysisBull analysis for US500.
Curious to see if this expanding triangle wave (4) plays out. This count envisions a move above 5673.5 to the final wave to complete bull run off October 2022 low.
Count invalid below 5329.5.
Friday’s SPX Options Chain Already Priced in Today’s DropToday’s sharp 2.2% SPX decline wasn’t a surprise for those who looked closely at the options metrics after Friday’s spot price fakeout . Ahead of the long weekend, market participants priced in the downside with both short- and long-term options .
BEFORE TODAY OPEN
Put options were nearly twice as expensive as calls at equivalent Expected Move distances before Tuesday's open!
BEFORE TODAY CLOSE
While today’s drop has led to some call skew on weekly options, suggesting a short-term rebound , the long-term bearish sentiment remains intact.
Key unemployment data this week will be crucial for the market’s next move.
If you'd like to see the option chain metrics in your charts, be sure to check out our free demo script here:
Most ATH Occur in SeptemberBeen a rough ride for stonks. Gone oversold. Retest of lows in progress. Buy the double bottom.
After a correction, the rise in price is often twice the drop. Statistically, most ATH occur in early September.
Fed cuts rates, we could see ATH come out of this dump like phoenix from ashes.
Went down ~500 pips; might rise 1K. Might not. Might get half back and rollover again. Let's find out.
Ambushed !September has often been a cruel month for the US stock market.
Traders returning from the 3 day Labor Day holiday weekend,
were "ambushed" by September selling as soon as the opening bell rang today.
Nvidia led the market lower, losing 10 %,
279 billion dollars of market value "poofed"..lost in a single day,
and the VIX soared back above 20 again.
The ambush occurred
after a last hour of August run up, just a few days ago,
as money managers clamored to get into the market paying up for the privilege.
Performance metrics do not suit those money managers left behind.
The drop on the chart, has the early look of a "potential" bullish cup and handle pattern.
So the game of chicken will now begin for those who think they can outsmart this market.
SPX Last 5528.92 9/3/24
THE_UNWIND
WOODS OF CONNECTICUT
US500 - SHORT IDEAIn Monday (start of the new week) price swept previous week high liquidity (orange line) and show willingness to go lower by breaking the 4H structure.
So the following week I would expect to see price trades lower, potentially even to opposing liquidity pool like previous week low (orange line)
Thanks you and have a nice trading week! LFG!
SPX nearing 50dmaIntraday Update: The SPX has hit the 127% ext (4points away) and the 50dma is here as well. This will be a do/die level for the market in the day(s) ahead.
SPX adjusted to M2 money supplyThe value of stock market indices is highly correlated with the amount of existing money. That is why to measure the economic cycles, I weight the value of the stock market with that of the money supply (M2), obtaining this chart.
We see how after 2008, business cycles of about 4 years have been established and that, in addition, we are now in an already mature bullish phase. This bullish phase will conclude with the distribution phase mentioned above, with the first resistances at the maximum value of 2007, and the maximum value trend line that continues since 2011 that has recently broken to the upside.
It strikes me that we are not better off now than in 2007 or in 2000, despite all the debt created and the amount of money printed along the way.
Take into account that Business cycles and the value of Bitcoin are highly correlated
SPx / Correction to 5620 then uptrend...S&P 500 Technical Analysis:
The price recently tried to reach its ATH
The current price will correct to 5620 and again will push up to get their ATH if can break 5643
otherwise should stabilize under 5620 to get 5584 and 5548
Key Levels:
Pivot Line: 5643
Resistance Levels: 5675, 5709
Support Levels: 5620, 5584, 5525
Expected Trading Range for Today: The price will fluctuate between 5675 and 5585.
Trend: Downward correction then uptrend
S&P500 SP500price moving upward in a channel where suddenly breaks the channel head down toward the support area (1).
SPX Might Turn DownwardsSince the S&P500 is showing bearish divergences, we expect a return to the thin structures on the downside. A first potential TP is located at 5,530.50 points and a second TP results from the still open gap (TP @ 5,464.50).
Long trade
Trade Details:
Date: Tuesday, 3rd September 2024
Pair: SPX/USD
Time: 3:45 PM during the LND to NY Session
Trade Type: Buyside trade
Entry Level: 5563.6
Profit Level: 5614.9 (0.92%)
Stop Level: 5558.7 (0.09%)
Risk-Reward Ratio (RR): 10.47
US500 Analysis by Mallicast TeamAfter the release of the PMI data, the US500 index experienced a downward trend on the 4-hour time frame. The analytical team at Mallicast has identified this bearish movement considering the economic data and market reactions. Based on technical analysis and observed patterns, it is anticipated that after this downward move, the US500 index may potentially resume its upward trend. This potential rebound depends on various factors, including changes in economic conditions, fiscal policies, and market sentiment. It is crucial for investors and traders to closely monitor the upcoming developments to capitalize on new market opportunities.
S&P500This is the demand zone where I expect the price to hit the ceiling. After it touches this area and confirms, I will enter.
Short trade
Trade Details:
Date: Tuesday, 2nd September 2024
Time: 00:00 AM during the NY to Tokyo Session AM
Pair: SPX/USD
Trade Type: Sellside trade idea
Time Frame: (15min TF)
Entry Level: 5644.7
Profit Level: 5594.8 (a 0.88%)
Stop Level: 5653.3 (a 0.15%)
Risk-Reward Ratio (RR): 2.4
The eye of Sauron, or just another level to be broken?We've seen this kind of setup before. Usually these can be rather good topping patterns. Should the US500 fail to break above the black line indicated and go on to print a new all-time high, we would target the black trend line that coincides with the purple support/resistance level. Wait and see... but our call is that we get a proper correction here.
