S&P to hit new low mid-January 2023
Updated
My first idea, comment if you think I'm onto something or if you think I'm dead wrong.
Since the S&P500 high in January 2022, RSI-50 began fluctuating between low 40s and high 50s. Each RSI-50 interval takes 70-80 bars. Each low and high can be associated with a strong rally or strong drop in the S&P price in the days following the RSI peak/valley. So far, this pattern has occurred twice. Should this pattern continue, I expect the S&P500 rally to continue and reach a local maximum around 4090 in late November or early December. Also at that time, the RSI-50 will be in the low-to-mid 50s, also a local maximum. Then, I expect a drop over the next 45 days where the S&P will lose 17% and hit 3390. RSI-50 will drop to 40 but may continue to decline, along with the S&P price. I expect the S&P to hit 3390 on Friday, January 13, 2023....Friday the 13th, mind you.
If I decide to move forward with taking a position, I will enter when RSI-50 hits 52 and put a trailing stop loss in once RSI-50 hits 43. That way if a rally follows, I can keep most of the gains, but can also keep riding should the price continue to decline. I am looking at buying SH, SDS, and/or SPXU when the time comes.
This idea is not investment advice. Good luck.
Since the S&P500 high in January 2022, RSI-50 began fluctuating between low 40s and high 50s. Each RSI-50 interval takes 70-80 bars. Each low and high can be associated with a strong rally or strong drop in the S&P price in the days following the RSI peak/valley. So far, this pattern has occurred twice. Should this pattern continue, I expect the S&P500 rally to continue and reach a local maximum around 4090 in late November or early December. Also at that time, the RSI-50 will be in the low-to-mid 50s, also a local maximum. Then, I expect a drop over the next 45 days where the S&P will lose 17% and hit 3390. RSI-50 will drop to 40 but may continue to decline, along with the S&P price. I expect the S&P to hit 3390 on Friday, January 13, 2023....Friday the 13th, mind you.
If I decide to move forward with taking a position, I will enter when RSI-50 hits 52 and put a trailing stop loss in once RSI-50 hits 43. That way if a rally follows, I can keep most of the gains, but can also keep riding should the price continue to decline. I am looking at buying SH, SDS, and/or SPXU when the time comes.
This idea is not investment advice. Good luck.
Note
RSI-50 sitting at 49.67 at close. I'm sure hoping it can push up a bit further early next week. I may adjust my entry point based on how Monday and Tuesday looks. With the Fed announcing the rate hikes mid week, I am considering entering a short position sooner.Note
Looks like the drop could happen sooner that I originally anticipated because of the rate hikes. I expect the S&P to follow the current downtrend and hit a new low in December and continue to fall into the new year.
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.