If markets continue to make shallow dips and rally higher, or even if there's a big sell off and false break of the lows that makes a V recovery then we're seeing a whole lot of things up-trending above massive inflection points. In this post I want to show you some different examples of what has happened on 4.23 breaks.
The 4.23 level is a very high probability level to trade off. Even on an intra day basis this will most often have at least reactions and can have full reversals off it. You can see in the SPX chart that the 2022 top came off the 4.23. When a 4.23 is going to be a reversal level it will often react to the 4.23 spike it out. Come back under and hold a retest. Forming a head and shoulders pattern with 4.23 as the shoulders. That setup when successful is a fatal setup for the trend. When inside the 4.23 head fake you're inside the end of the trend.
Interestingly, not only is SPX at this 4.23 level but so are lots of other things. Bitcoin is, for example.
BTC is often a good proxy for risk on/off so it's interesting this is at this big decision level along with SPX is interesting.
In the 4.23 reversal the rejection of rallies can be so strong and abrupt there's not a chance to do anything during it. You really have to think about it in advance.
But if the 4.23 break it's extremely easy to the upside for the foreseeable future.
Let's start with looking at the different 4.23 decisions in AAPL over the years.
This first one shows how the head fakes can be the end of rallies. This correcting relatively shallow compared to the full risk. Holding the 2.61.
From this pullback and 4.23 break AAPL went up 200% without any sizable pullbacks.
Advancing to the further swing.
In this one AAPL began to go parabolic in the run to the 4.23. Got a bit above it. Crashed back to it. Held retests and then went into a big boom move.
Almost every week closed higher in this period which continued until over 100% above the 4.23.
We advance the swing again and ... what's the chances?
AAPL last top is 4.23 and now we're retesting the 4.23.
Now ... there are different things that can happen. But if you were to assume the 4.23 pattern in AAPL continues it'd have to do this.
And if you believe that is possible (and it's possible) then the SPX chart in the OP makes a lot of sense, right?
Expecting BTC would do this would be obvious if indices made that move.
Look at NVDA.
To overlook the risks of rejection would be fatal if wrong (this could be a simple head and shoulders like pattern) but viewed through the lens of a 4.23 pullback this would have a hyper bullish forecast to it.
Over and over again you can make this case for things doubling without any major pullbacks. Candle after candle up-trends.
It would not be a time to be a bear!
Here's a look left on NVDA. If you had fibs from the crash range here was the 4.23 decision.
We could be somewhere like here in NVDA.
These are things you certainly have to respect the risk of as an active shorter of things. It'd not be good. And they're such massive outsized opportunities if they form like this that it'd be insane to not prep for what to do in this. If week after week after week is closing green and we never trade under the last week - a smart trader can build a massive position in that.
Think about the positions you could build in these periods where the market never crosses your entry again.
And then wait and start to trail stops when it goes parabolic. During this period there will be 10% jumps up and the trend of shallow pullbacks will continue.
Carrying a bear bias into this would be bad because although the trend never breaks there a enough pullbacks to mean you can easily end up bearish in the worst rally zones. If betting on things like bull traps/spike outs.
These moves above the 4.23 are very common. A sharp doubling of the trend happens above the 4.23 a lot!
If SPX is going to break it and have the common reaction - everything is going vertical. There are lots of things that are at the 4.23 zones now and you can add 100% onto the 4.23 and think it's probable it will get to there and head fake over it a bit. 100% should be a fairly "Safe" target for the 4.23 break.
More speculative ideas would be to look for things that are currently down a lot and draw a fib from the high to the low of those. If we enter into a mania condition where indices are up every week then we might see mania in the hyper speculative things that were in favour previously.
Example;
Not think this sort of thing works on doge?
We have a current 4.23 top and a drop to the 1.27. That's the full predicted correction off a 4.23. It's not always the bottom - but this is the target for a 4.23 drop. Doge may have completed a full 4.23 cycle and be heading into the next. Absolutely possible. If that were true, this would be set to begin to trend very hard.
The consideration has to be what if SPX is here.
It'd be fair to say the odds of this are low but how high would they have to be to make it worth considering?
People act as if the idea of considering massive downside risk means you're scared to take upside risk. Which isn't the case. If anything, I am advocating for more aggressive upside risk betting on the solid trend continuation with tight trailing stops if the breakout is made. Inside the area where we have most chance of a pullback in an uptrend and a wipe out top in a reversal I'm extremely aware of what those risks might look like, but I won't be "Side lined" in a breakout. It means I don't want to broke if the extreme risk thing happens.
Indices could more than double or more than half off the 4.23 decision. We're in a really interesting time.
If we break I plan to trade as if we're going to be up and up every week. Only take long setups. Maybe have a few macro short levels along the way but be mainly a perma bull. If we get the consistent buying weeks I'll expect all dips will be bought and the uptrend will turn into a parabolic run, I'll act accordingly.
And if we start to get massive 10 - 20% weekly candles somewhere over 10,000, I'll suspect that may be blow off action and start to think about fading. By this time we'll be at the next set of important fib levels and I'll use a very similar form of analysis.
If you use any half decent trend strategy with a stop loss you really can't lose money in a typical 4.23 breakout. Even those mindlessly buying with no downside control can run up a lot (although it's questionable if they get to keep it or not).
The fact this is a possible outcome for bears if the resistances fail at this level is something I think macro bears should consider, deeply. Because you don't have to "Be wrong" for this to happen. If your thesis this is all a big stinking bubble - your biggest risk isn't you're wrong, it's you're right! And we're inside the bubble. Not at the end of it. Bubbles FREQUENTLY double into their end points.
This would be a major opportunity for any who embraced it. I do think seeing this happen would be warning things were going to get ugly later but the money to be made in the 5000 - 10,000 run would be exceptional. Accumulating intra day/week with trailing stops would probably see you hit trailing stops about three times most of them you getting in lower and you could end up making 1.000% for the 100% the market went up - and do this while keeping risk capped low since you're always trailing stops to lock in profit.
The opportunity isn't in the price forecast/% as such. It's more in the fact that if it is right it should be evidenced by those periods of extremely consistent trend. These will go on for a long time. Be interrupted. Chop / drop and then resume. The amount you can make in those types of trends if you expect them is off the page. And it'd be easy. There's a few times it'd be tricky and these can be deal with by simply waiting - because later it will be easy.
What makes this all the more important to consider for bears I think is the fact that we could say the highest probability way that SPX makes this move is by dumping under the last low to retest the 4.23 first.
Which would feel very bearish. Very "I should sell the rip" ish. The move that this would make is one I already have marked in as a warning that we could end up going significantly lower. I have to understand all those conditions could fill and even although it all looks exactly like a bear setup, it's actually a 4.23 retest. Very different things for the next swing.
Every major high and low in SPX during the last decade has interacted with the fibs from the 2008 low. They've marked out the highs/lows better than anything else.
We're now at the most important one of those. It hit in 2022 and since then we've been inside the suspense period of it. The 4.23 reaction didn't tell us all that much. A 4.23 spike out doesn't tell us all that much. Both of these things happen in the bull and bear moves. But the actual decision after the attempt to break 4.23 matters a lot.
Whatever happens here is likely to be the most pivotal decision point so far.
The 4.23 level is a very high probability level to trade off. Even on an intra day basis this will most often have at least reactions and can have full reversals off it. You can see in the SPX chart that the 2022 top came off the 4.23. When a 4.23 is going to be a reversal level it will often react to the 4.23 spike it out. Come back under and hold a retest. Forming a head and shoulders pattern with 4.23 as the shoulders. That setup when successful is a fatal setup for the trend. When inside the 4.23 head fake you're inside the end of the trend.
Interestingly, not only is SPX at this 4.23 level but so are lots of other things. Bitcoin is, for example.
BTC is often a good proxy for risk on/off so it's interesting this is at this big decision level along with SPX is interesting.
In the 4.23 reversal the rejection of rallies can be so strong and abrupt there's not a chance to do anything during it. You really have to think about it in advance.
But if the 4.23 break it's extremely easy to the upside for the foreseeable future.
Let's start with looking at the different 4.23 decisions in AAPL over the years.
This first one shows how the head fakes can be the end of rallies. This correcting relatively shallow compared to the full risk. Holding the 2.61.
From this pullback and 4.23 break AAPL went up 200% without any sizable pullbacks.
Advancing to the further swing.
In this one AAPL began to go parabolic in the run to the 4.23. Got a bit above it. Crashed back to it. Held retests and then went into a big boom move.
Almost every week closed higher in this period which continued until over 100% above the 4.23.
We advance the swing again and ... what's the chances?
AAPL last top is 4.23 and now we're retesting the 4.23.
Now ... there are different things that can happen. But if you were to assume the 4.23 pattern in AAPL continues it'd have to do this.
And if you believe that is possible (and it's possible) then the SPX chart in the OP makes a lot of sense, right?
Expecting BTC would do this would be obvious if indices made that move.
Look at NVDA.
To overlook the risks of rejection would be fatal if wrong (this could be a simple head and shoulders like pattern) but viewed through the lens of a 4.23 pullback this would have a hyper bullish forecast to it.
Over and over again you can make this case for things doubling without any major pullbacks. Candle after candle up-trends.
It would not be a time to be a bear!
Here's a look left on NVDA. If you had fibs from the crash range here was the 4.23 decision.
We could be somewhere like here in NVDA.
These are things you certainly have to respect the risk of as an active shorter of things. It'd not be good. And they're such massive outsized opportunities if they form like this that it'd be insane to not prep for what to do in this. If week after week after week is closing green and we never trade under the last week - a smart trader can build a massive position in that.
Think about the positions you could build in these periods where the market never crosses your entry again.
And then wait and start to trail stops when it goes parabolic. During this period there will be 10% jumps up and the trend of shallow pullbacks will continue.
Carrying a bear bias into this would be bad because although the trend never breaks there a enough pullbacks to mean you can easily end up bearish in the worst rally zones. If betting on things like bull traps/spike outs.
These moves above the 4.23 are very common. A sharp doubling of the trend happens above the 4.23 a lot!
If SPX is going to break it and have the common reaction - everything is going vertical. There are lots of things that are at the 4.23 zones now and you can add 100% onto the 4.23 and think it's probable it will get to there and head fake over it a bit. 100% should be a fairly "Safe" target for the 4.23 break.
More speculative ideas would be to look for things that are currently down a lot and draw a fib from the high to the low of those. If we enter into a mania condition where indices are up every week then we might see mania in the hyper speculative things that were in favour previously.
Example;
Not think this sort of thing works on doge?
We have a current 4.23 top and a drop to the 1.27. That's the full predicted correction off a 4.23. It's not always the bottom - but this is the target for a 4.23 drop. Doge may have completed a full 4.23 cycle and be heading into the next. Absolutely possible. If that were true, this would be set to begin to trend very hard.
The consideration has to be what if SPX is here.
It'd be fair to say the odds of this are low but how high would they have to be to make it worth considering?
People act as if the idea of considering massive downside risk means you're scared to take upside risk. Which isn't the case. If anything, I am advocating for more aggressive upside risk betting on the solid trend continuation with tight trailing stops if the breakout is made. Inside the area where we have most chance of a pullback in an uptrend and a wipe out top in a reversal I'm extremely aware of what those risks might look like, but I won't be "Side lined" in a breakout. It means I don't want to broke if the extreme risk thing happens.
Indices could more than double or more than half off the 4.23 decision. We're in a really interesting time.
If we break I plan to trade as if we're going to be up and up every week. Only take long setups. Maybe have a few macro short levels along the way but be mainly a perma bull. If we get the consistent buying weeks I'll expect all dips will be bought and the uptrend will turn into a parabolic run, I'll act accordingly.
And if we start to get massive 10 - 20% weekly candles somewhere over 10,000, I'll suspect that may be blow off action and start to think about fading. By this time we'll be at the next set of important fib levels and I'll use a very similar form of analysis.
If you use any half decent trend strategy with a stop loss you really can't lose money in a typical 4.23 breakout. Even those mindlessly buying with no downside control can run up a lot (although it's questionable if they get to keep it or not).
The fact this is a possible outcome for bears if the resistances fail at this level is something I think macro bears should consider, deeply. Because you don't have to "Be wrong" for this to happen. If your thesis this is all a big stinking bubble - your biggest risk isn't you're wrong, it's you're right! And we're inside the bubble. Not at the end of it. Bubbles FREQUENTLY double into their end points.
This would be a major opportunity for any who embraced it. I do think seeing this happen would be warning things were going to get ugly later but the money to be made in the 5000 - 10,000 run would be exceptional. Accumulating intra day/week with trailing stops would probably see you hit trailing stops about three times most of them you getting in lower and you could end up making 1.000% for the 100% the market went up - and do this while keeping risk capped low since you're always trailing stops to lock in profit.
The opportunity isn't in the price forecast/% as such. It's more in the fact that if it is right it should be evidenced by those periods of extremely consistent trend. These will go on for a long time. Be interrupted. Chop / drop and then resume. The amount you can make in those types of trends if you expect them is off the page. And it'd be easy. There's a few times it'd be tricky and these can be deal with by simply waiting - because later it will be easy.
What makes this all the more important to consider for bears I think is the fact that we could say the highest probability way that SPX makes this move is by dumping under the last low to retest the 4.23 first.
Which would feel very bearish. Very "I should sell the rip" ish. The move that this would make is one I already have marked in as a warning that we could end up going significantly lower. I have to understand all those conditions could fill and even although it all looks exactly like a bear setup, it's actually a 4.23 retest. Very different things for the next swing.
Every major high and low in SPX during the last decade has interacted with the fibs from the 2008 low. They've marked out the highs/lows better than anything else.
We're now at the most important one of those. It hit in 2022 and since then we've been inside the suspense period of it. The 4.23 reaction didn't tell us all that much. A 4.23 spike out doesn't tell us all that much. Both of these things happen in the bull and bear moves. But the actual decision after the attempt to break 4.23 matters a lot.
Whatever happens here is likely to be the most pivotal decision point so far.
We may be inside of a crash event to 3000 in SPX.
Read the full case with backlog of historic analysis/forecasts here: holeyprofitnewsletter.substack.com/p/the-case-for-3000-in-spx
Read the full case with backlog of historic analysis/forecasts here: holeyprofitnewsletter.substack.com/p/the-case-for-3000-in-spx
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
We may be inside of a crash event to 3000 in SPX.
Read the full case with backlog of historic analysis/forecasts here: holeyprofitnewsletter.substack.com/p/the-case-for-3000-in-spx
Read the full case with backlog of historic analysis/forecasts here: holeyprofitnewsletter.substack.com/p/the-case-for-3000-in-spx
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.