SPX: Took a Low Probability Upside. What We Now Know.
Updated
Hello traders!
Sometimes the market can trick us and no one should ever believe they can ever predict the markets 100%. Today, the market took a low probability upside move today which I pinned at under 25%. Futures meandered around and so did the "news". Today, people are "blaming" the upside move on China's repurchase program early this morning with dumping 50 billion worth in USD into the market.
The reality is, it doesn't matter what the reason is, so lets take a look at what will happen from here, and now the picture becomes significantly more clear for an 'end-game'.
Based on technicals, theoretically the market could make upside moves to 2618, 2700, and other upside fib levels all within a realm of possibility and traditional Elliot Wave theorem. Even so, the market could fall sharply after today.
Weakness in crude, weakness in Gold and Silver and a resurgence in the US dollar strength (likely going to hit 105) indicates that this upwards potential in equities will likely be capped in terms of duration (time).
The point is not trying to guess the highest upwards move, but rather, that another wave down is coming sooner than later. Therefore, long-term investors should hold-off a little longer before dumping money into the market.
For those eager to get back into the market ASAP, one should at-least wait for the lower gap to close.
Stay safe and healthy everyone!
- zSplit
Sometimes the market can trick us and no one should ever believe they can ever predict the markets 100%. Today, the market took a low probability upside move today which I pinned at under 25%. Futures meandered around and so did the "news". Today, people are "blaming" the upside move on China's repurchase program early this morning with dumping 50 billion worth in USD into the market.
The reality is, it doesn't matter what the reason is, so lets take a look at what will happen from here, and now the picture becomes significantly more clear for an 'end-game'.
Based on technicals, theoretically the market could make upside moves to 2618, 2700, and other upside fib levels all within a realm of possibility and traditional Elliot Wave theorem. Even so, the market could fall sharply after today.
Weakness in crude, weakness in Gold and Silver and a resurgence in the US dollar strength (likely going to hit 105) indicates that this upwards potential in equities will likely be capped in terms of duration (time).
The point is not trying to guess the highest upwards move, but rather, that another wave down is coming sooner than later. Therefore, long-term investors should hold-off a little longer before dumping money into the market.
For those eager to get back into the market ASAP, one should at-least wait for the lower gap to close.
Stay safe and healthy everyone!
- zSplit
Note
Hedge funds have poured money into the market as of late, resulting in a bounce back a little for fierce that what one could have argued should have happened based on technicals and fundamentals. This is not uncommon near the end of a quarter (quarter rebalancing).
Perhaps as early as tomorrow I am looking for a sharper wave sell-off to likely new lows.
- zSplit
Note
Wave 5 has begun. This does not mean we will go straight down, but rather, the trend is likely down.It is possible we can get a wave 5 extension down to the 1500 or 1600s. However, that is purely speculative and will only occur if US cases fail to subside by late April.
The first buy-in price will be in the 1800-1900 range.
Gold, Silver and Oil will fall alongside in due time.
- zSplit
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.