SPX500 / ES - It's Still a Bull. Now, Good Luck Riding It
Updated
Before we begin, to substantiate what I'm about to say, I would suggest everyone blow 8 minutes watching this video.
Professional bull riders attempted to ride Asteroid 76 times.
Asteroid bucked off and stomped professional bull riders 71 times.
You should know professional bull riders aren't some Cletus-style hicks. These are professional athletes in very, very good shape, who grew up riding steers as children, often graduated to horses, and then took on the extremely fine and extremely challenging Cosmic manifestation that is encompassed in the word "ox," of which a bull can be seen as a derivative of.
They're like that and they still got wrecked. Wall Street, is, likewise, like an Ox, for they and the Federal Reserve are the guardians of the world's financial heart, whether you like it or not.
No matter how you hear about recession and inflation and rate hikes this and that on TradingView and Twitter and Discord and the news, the reality is, these markets are still bull markets.
I will repeat: You. Are. Still. In. A. Bull. Market.
This is something I had to change my own mind on recently, and sobering it was. Clarity it doth provided.
And no matter how insane it may sound with all those fundamental factors kicking around telling you that the markets should crash, they aren't going to crash. In a time not-too-far-ahead you're going to see a _major_ and violent bull run that may see SPX 5,000 for real, and it may even happen before 2022 concludes.
However, before that happens, you're going to be given a very difficult situation to buy the dip in, and that situation is upon us.
The reality is that last week's colossal CPI dump and the resulting days of downturn really did amount to a shift in market sentiment from bullish to bearish.
However, you should also note that last week formed an outside bar, with ES futures closing on a ~50 point rally above 3,900.
https://www.tradingview.com/x/meVoJ4aQ/
The reality of an outside bar is that although you're not one bit likely to see it turn around and make a new high the next week, you're also not very likely to see it continue on downwards sweeping new lows so easily.
Looking at the Daily provides some lucidity. Equilibrium of last week's outside bar is a very fun 4014 points.
What you should expect, now that SPX swept previous lows, is in all due fairness, a change in momentum and direction that serves the purpose of enticing longs to enter way, way too early, while also killing short sellers who are way, way too early.
The truth is that while no crash is ahead, you'll feel like we had a crash because we're going to 3,400~ first, and that kind of a dump is probably going to stop being this choppy up and down fearless landside down stuff and will instead come fast and strong... when it happens.
But before we get there, you are very likely to see significant upside manipulation. What's really hard about getting setup short for this move downwards is that the market makers have left a 200 point range that can be played with on and during FOMC day and when Big Jerome Powell speaks.
FOMC rate hike = Wednesday
J Powell speech = Friday
And these really are the only two news events in the cards.
Also keep in mind that counting FOMC day, there's still eight days left in the month to manipulate the markets
A very difficult scenario to trade would be to see a bullish Monday and Tuesday followed by an FOMC rate hike pump.
Even if the Fed hikes 100 bps, it can be used to pump the market. The logic you will hear in the news will be, "Well, didn't you anticipate this? Markets pumped because finally the Federal Reserve is taking care of inflation, so all this inflationary pain will be over sooner than we expected."
And then perhaps when Powell speaks on Friday he will just say hawkish things, meaning that there's no intention to pivot/dove at the next FOMC, which is not until November, and so the markets will dump.
The logic then, will be that "Rates are thus projected to reach 5.5% before the end of the year!!"
Once the markets start dumping, you will probably see 2-3 weeks of very annoying and miserable downside, with little bouncing. This will be very punishing to dip buyers. You buy the dip because Apple looks really cheap and it keeps on running.
"It's been a week and it's not bouncing. It has to bounce, right?"
It will bounce when you get scared out or liquidated and see a 45 VIX print, and not before.
The logic in all this is that although we have a significant shift in the tone of the markets, these markets are still markets that have liked to go wild bucking around and taking out both bears and bulls.
They're about to become markets, however, that takes out just bulls, but only for a little while.
The caveat to all this is the logic that "The trend is your friend... until the end."
Once the big trend shifts is when a person tends to lose a lot of money. They buy the dip expecting to play the bounce only to get freight trained as it drives downwards. Or they short a pop expecting to catch a new target low, only to get ruined by a gap up that takes 18 months to correct.
Well, you want to get rich, right? The truth is that you cannot change your life. You have what you have in your life because of certain causes. Have you ever thought about why you were born in the place and family and gender you are, and not another? Could something like this and all your social and work connections truly be random?
A lot of people get ruined because they are trying to change their lives from what they have to what they think they want, what they think will give them the happiness they desire, what they think will satisfy their egotism.
But you should know that this is a business that is established in society under Heavenly Mandate and if you are to succeed at it, it is because your life already has that predestined fortune.
If you can take a proper attitude towards trading and take a more long term approach, you may be able to reap success. If you can't, then you'll always fail, because you'll always be gambling from a heart of jealousy.
This is a time where it's very, very, very lucrative to position some trades on a two or a three month time frame.
It's also a time that it's very, very, very important to wait to see a proper bottoming price location or a proper bottoming pattern before you go long. Lest you otherwise be 400 points and 15 days too early and then have to wait 40 days to ultimately make virtually nothing.
Also, when it comes to a bull thesis, you should be weary about the situation in mainland China. The Chinese Communist Party will soon fall, and it will happen in the middle of the night North American time and US equities will gap down worse than FedEx did on Friday.
Before that happens, though, you can expect prices to have risen to high places, because the Lords of Wall Street know exactly what is happening, and when, usually because they have their hands in the pile.
Professional bull riders attempted to ride Asteroid 76 times.
Asteroid bucked off and stomped professional bull riders 71 times.
You should know professional bull riders aren't some Cletus-style hicks. These are professional athletes in very, very good shape, who grew up riding steers as children, often graduated to horses, and then took on the extremely fine and extremely challenging Cosmic manifestation that is encompassed in the word "ox," of which a bull can be seen as a derivative of.
They're like that and they still got wrecked. Wall Street, is, likewise, like an Ox, for they and the Federal Reserve are the guardians of the world's financial heart, whether you like it or not.
No matter how you hear about recession and inflation and rate hikes this and that on TradingView and Twitter and Discord and the news, the reality is, these markets are still bull markets.
I will repeat: You. Are. Still. In. A. Bull. Market.
This is something I had to change my own mind on recently, and sobering it was. Clarity it doth provided.
And no matter how insane it may sound with all those fundamental factors kicking around telling you that the markets should crash, they aren't going to crash. In a time not-too-far-ahead you're going to see a _major_ and violent bull run that may see SPX 5,000 for real, and it may even happen before 2022 concludes.
However, before that happens, you're going to be given a very difficult situation to buy the dip in, and that situation is upon us.
The reality is that last week's colossal CPI dump and the resulting days of downturn really did amount to a shift in market sentiment from bullish to bearish.
However, you should also note that last week formed an outside bar, with ES futures closing on a ~50 point rally above 3,900.
https://www.tradingview.com/x/meVoJ4aQ/
The reality of an outside bar is that although you're not one bit likely to see it turn around and make a new high the next week, you're also not very likely to see it continue on downwards sweeping new lows so easily.
Looking at the Daily provides some lucidity. Equilibrium of last week's outside bar is a very fun 4014 points.
What you should expect, now that SPX swept previous lows, is in all due fairness, a change in momentum and direction that serves the purpose of enticing longs to enter way, way too early, while also killing short sellers who are way, way too early.
The truth is that while no crash is ahead, you'll feel like we had a crash because we're going to 3,400~ first, and that kind of a dump is probably going to stop being this choppy up and down fearless landside down stuff and will instead come fast and strong... when it happens.
But before we get there, you are very likely to see significant upside manipulation. What's really hard about getting setup short for this move downwards is that the market makers have left a 200 point range that can be played with on and during FOMC day and when Big Jerome Powell speaks.
FOMC rate hike = Wednesday
J Powell speech = Friday
And these really are the only two news events in the cards.
Also keep in mind that counting FOMC day, there's still eight days left in the month to manipulate the markets
A very difficult scenario to trade would be to see a bullish Monday and Tuesday followed by an FOMC rate hike pump.
Even if the Fed hikes 100 bps, it can be used to pump the market. The logic you will hear in the news will be, "Well, didn't you anticipate this? Markets pumped because finally the Federal Reserve is taking care of inflation, so all this inflationary pain will be over sooner than we expected."
And then perhaps when Powell speaks on Friday he will just say hawkish things, meaning that there's no intention to pivot/dove at the next FOMC, which is not until November, and so the markets will dump.
The logic then, will be that "Rates are thus projected to reach 5.5% before the end of the year!!"
Once the markets start dumping, you will probably see 2-3 weeks of very annoying and miserable downside, with little bouncing. This will be very punishing to dip buyers. You buy the dip because Apple looks really cheap and it keeps on running.
"It's been a week and it's not bouncing. It has to bounce, right?"
It will bounce when you get scared out or liquidated and see a 45 VIX print, and not before.
The logic in all this is that although we have a significant shift in the tone of the markets, these markets are still markets that have liked to go wild bucking around and taking out both bears and bulls.
They're about to become markets, however, that takes out just bulls, but only for a little while.
The caveat to all this is the logic that "The trend is your friend... until the end."
Once the big trend shifts is when a person tends to lose a lot of money. They buy the dip expecting to play the bounce only to get freight trained as it drives downwards. Or they short a pop expecting to catch a new target low, only to get ruined by a gap up that takes 18 months to correct.
Well, you want to get rich, right? The truth is that you cannot change your life. You have what you have in your life because of certain causes. Have you ever thought about why you were born in the place and family and gender you are, and not another? Could something like this and all your social and work connections truly be random?
A lot of people get ruined because they are trying to change their lives from what they have to what they think they want, what they think will give them the happiness they desire, what they think will satisfy their egotism.
But you should know that this is a business that is established in society under Heavenly Mandate and if you are to succeed at it, it is because your life already has that predestined fortune.
If you can take a proper attitude towards trading and take a more long term approach, you may be able to reap success. If you can't, then you'll always fail, because you'll always be gambling from a heart of jealousy.
This is a time where it's very, very, very lucrative to position some trades on a two or a three month time frame.
It's also a time that it's very, very, very important to wait to see a proper bottoming price location or a proper bottoming pattern before you go long. Lest you otherwise be 400 points and 15 days too early and then have to wait 40 days to ultimately make virtually nothing.
Also, when it comes to a bull thesis, you should be weary about the situation in mainland China. The Chinese Communist Party will soon fall, and it will happen in the middle of the night North American time and US equities will gap down worse than FedEx did on Friday.
Before that happens, though, you can expect prices to have risen to high places, because the Lords of Wall Street know exactly what is happening, and when, usually because they have their hands in the pile.
Note
So far, so good on the bull impulse thesis. You really have to be careful right now though.If you're trading, you should consider regarding them as surgical strikes and get in and get out on smaller time frames.
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