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Breakout Imminent for StocksStocks are just 5 points away from all time highs. The S&P is hugging the upper bound of the bull wedge pattern we have been following for the second week now. The Kovach OBV appears to be building up pressure for a breakout. Additionally, we have a huge steepening in the yield curve, between the 3 year and the 10 year in particular. Stocks are due for a breakout, and everyone holding call options may get a gift soon. If you want to fomo into a trade now, just consider that we are at highs, but it might not be too late to get ready for the breakout. If we are wrong, we are likely to retrace to 3584 or 3547. If we are right, 3700 will be the next target, a psychological level.
FX:SPX500Long
by quantguy
Bull Wedge Extension in StocksThe S&P is facing resistance at highs. It looks we called the bull wedge pattern from last week prematurely. we are continuing to see it form, rather than witnessing the break out. Currently, we are seeing support from the level 3617, which intersects with the lower bound of the trendline that intersects here. Be careful, because bull wedge patterns are not guaranteed to break out to the upside. If this goes south, expect support at 3547. If it breaks higher, we can expect the S&P to make a run for 3700, and likely face resistance there, being a psychological level.
FX:SPX500
by quantguy
Stocks Looking WeakStocks finally broke out form our bull wedge pattern. The S&P made new relative highs, breaking our Fibonacci extension level at 3632. It does look like we are seeing some weakness creep in as the markets do not seem to be able to hold current levels. We are not seeing the follow through that we usually do in momentum breakouts. Additionally, we will face headwinds from highs at 3675, so a retracement is more probable than another breakout. The level 3584 will provide support. If there is strong selling momentum watch 3547. The Kovach OBV has registered the momentum but has turned over suggesting a retracement or at least ranging may follow next.
FX:SPX500
by quantguy
Bull Wedge Continues in StocksStocks continue to form the bull wedge pattern. The S&P has tested support around 3546, as anticipated. Anyone reading these briefings should have been prepared. The Kovach OBV is still trending upwards, suggesting we may have some propensity to break out. Watch 3632 for momentum if this is the case. Dont be surprised if stocks range for a bit between 3584 and 3632. We are approaching the US holiday of Thanksgiving and gradually the markets will dry up as we near Thursday. If somehow we do get a break down, watch 3483 for support and a potential buy-back.
FX:SPX500Long
by quantguy
Breakout Near for Stocks?Stocks continue to range, holding the very narrow range 3547 to 3584. If they break to the upside they will face resistance at the Fibonacci extension level 3632, which provided resistance last week. Highs at 3677 will also be difficult to break. The S&P still looks like it is forming a bull wedge pattern. We are currently sitting at support from the lower bound. If our buy-side conviction fails, we could see a breakdown to as low as 3484, but we need to slice through several levels first.
FX:SPX500Long
by quantguy
3
Bull Wedge Consolidation in StocksExactly as we mentioned yesterday, the S&P found support at 3547. This is not only a technical level, but the lower bound of the bull wedge pattern we have been discussing all week. Currently, we are seeing resistance at 3584, a technical level. If it breaks through this, it will see resistance at the Fibonacci extension level of 3632. This seems to be the upper bound of the wedge. Keep your eye on this level for a breakout, but we may retest lower levels once more, so don't be too trigger happy. Bull wedges are not guaranteed to break to the upside, so if we do break down watch 3846.
FX:SPX500Long
by quantguy
2
Clean Bull Wedge in StocksStocks finally took that dip we were anticipating. We noted that the S&P would likely test 3547, and that is exactly where it went. It is currently forming a nice bull wedge pattern. The lower bound of the bull wedge intersects 3547, so we will have nice support from the combination of this level and the trend line. Bull wedges identify a consolidation of volatility, which portends a breakout soon. Note that this pattern could break to the downside. At this time frame the Kovach OBV is quite oscillatory, so it could go either way. For ideal breakout conditions, you would want the Kovach OBV increasing while the price action is consolidating. Our wedge pattern will first have to test highs, then probably make a slight retracement before finally breaking out. If we are wrong and it breaks to the downside, it could do so with a vengeance and hit 3483, so be careful.
FX:SPX500Long
by quantguy
Breakout in Stocks?Stocks are currently bounded by 3632, which is the Fibonacci extension level from Fib levels we have anchored last week. Stocks look like they are building pressure for a breakout. The Kovach OBV looks pretty bumpy but appears to be gathering steam. Broadly speaking, it is looking pretty bullish. We may see a retracement before the breakout, so be careful. If we see a retracement, 3547 seems reasonable. At this point we would be forming a proper bull wedge pattern, assuming that dip was bought back. If we are able to break out, stand by for new levels as the next Elliott Impulse wave begins
FX:SPX500Long
by quantguy
Vaccine News! What Does this Mean for Stocks?News of the Moderna vaccine has sent stocks soaring this morning. Never mind the actual effectiveness of this 'vaccine', this is simply what the markets want to hear. The S&P has hit 3634, a fibonacci extension level and all time highs. The Kovach OBV looked like it was about to turn over, but has since upticked to reflect this move. The Kovach Chande has picked up dramatically. The S&P may see some resistance here, but it should have support at 3584, and 3547. If you did not enter this trade already, avoid FOMO, we are bound to see a retracement at some point.
FX:SPX500Long
by quantguy
What's Next for Stocks?We had mentioned last night that 3584 would provide resistance and it did, at least for a short scalp. The S&P tested this, then retraced to 3547, over a 30 point move. Currently it is ranging between these two levels. Unless there is a news event to drive it otherwise, it is likely to remain ranging. If it does break down, however, we could see a lot of momentum here, to 3485, a Fibonacci level, or lower. If you are range trading the S&P today, keep that in mind. Eventually, we anticipate stocks will make highs again, but there is more risk to the downside at this point, even if it is just a technical retracement.
FX:SPX500Short
by quantguy
Best Stock Trading and Investing IdeasAfter the selloff, stocks are gradually tapering up. There is not a lot of momentum here, it is reminiscent of low liquidity drift in the after market. The S&P will face resistance at 3585 and after that there is a big vacuum zone up to 3634. It is highly likely to see more ranging or a further retracement before we breach new highs again. The Fibonacci levels below present good ideas for buy-back, including 3485, and 3433. The Kovach OBV is still strong, so it would be unwise to step in front of this freight train.
FX:SPX500Long
by quantguy
Stocks Retrace, Still BullishAfter spiking up dramatically on vaccine news, the S&P retraced the entire move to find support at highs, testing 3584 and 3547. After such a move it is likely to range for a bit, testing current levels and finding footing before the next piece of news ping pongs it elsewhere. The Kovach OBV is still extremely strong, though it's tapering slightly. Although a retracement is due, there is strong momentum here. Wait for a pullback before entering a serious long position. In the mean time, look for short mean reversion trades off levels.
FX:SPX500Long
by quantguy
1
The Pfizer News: Hear it First!Stocks have blasted through new highs completely disregarding election drama and focusing solely on the Pfizer news. Indeed news of a 90% success rate in the vaccine has fueled a risk on frenzy. It is really difficult to "crystal ball" what's going to happen other than to say that a retracement is likely at some point. This news seems highly dubious and when that is priced into the markets we could retrace the entire move and then some. I'd be highly skeptical of this move. That being said, I would also not get in the way of this freight train. If you have an existing stock portfolio you should be singing right now. But I would also consider taking profits. We have just found resistance at a Fibonacci Extension level, which may prove to be a retracement. The Kovach OBV is incredibly bullish so there is a lot of meat to this rally.
FX:SPX500Long
by quantguy
2
Retracement in Sight for Stocks?Stocks have finally retraced a bit after tracing the entire range. There was some momentum to this, as measured by the Kovach OBV. This indicator is finally tapered, suggesting that stocks have found good ground near highs and may retrace or range at current levels. A short trade would risk stepping in front of a freight train, but a long trade would be FOMO at this point as we are heavily overbought. If you are long the best idea would be to sit tight and wait for lower levels. The S&P cant rally forever and we are bound to see better prices at some point. The level 3550 seems very significant and the S&P must test this before breaking higher.
FX:SPX500Long
by quantguy
Stocks SoaringStocks have absolutely soared. The S&P has blasted through the 3400 handle into the 3500's. It is currently sitting at around 3504, where it should have some support from the psychological 3500 handle. A retracement is definitely overdue, since we rallied almost 300 points this month. Even a 50% retracement to 3379 (referring to October's Fibonacci levels), would be reasonable. Other reasonable pullback levels would include 3419 and 3475, the 61.8% and 78.6% levels, respectively. Our Fibonacci levels are anchored from above at 3547, which will be a significant price target and significant level to break.
FX:SPX500Long
by quantguy
Stocks Reeling from Election UncertaintyThe S&P has whipsawed to the extreme even for this product. It has spanned 100 points in the course of several hours which is a degree of volatility on par with oil. The lack of a clear winner in the US elections is clearly to blame here, but it still seems as though the markets are betting on a Trump victory. We have miles of recounting and lawsuits, as neither side will let this one go easily. I'd stay out of the markets until this resolves. However, as we recommended before, buying at lower levels is a great idea especially if you are adding to a long term portfolio. The levels 3329 and 3343 stand out recently, but if troubles persist, we could feel out the bottom of the range at 3241. It would be very unwise to fomo into a trade at this point.
FX:SPX500Long
by quantguy
Election Special on StocksThe S&P is already starting to break out, exactly in line with our prediction on the election special last night. The Kovach OBV is registering some strong bull momentum. But avoid FOMO here, and be very mindful of the downside risk. As mentioned, today is election day in the US, but neither side seems poised to accept the results of the election. If this is true, we will see volatility in the markets as investors wait from the sidelines for resolution. Additionally, there is the threat of civil unrest (particularly on the Democratic side). Depending on how bad it is, we could see another coronavirus level retracement. Once a clear winner is decided, however, we anticipate a V-shaped recovery either way. The point is be very careful of holding long term positions. Quick scalping may be very profitable, especially off the levels drawn. Just avoid holding positions for too long and be mindful of the volatility. A good retracement could take us to 3200, 3100, or worst case back to the 2000's. This should be considered the buying opportunity of a lifetime in the long term, if so.
FX:SPX500Long
by quantguy
Headwinds for StocksStocks have caught a lift of lower levels as we anticipated they would. The level 3241 is a nice lower bound for the S&P at this point. It has since rallied, passing by many technical levels in the process, and is currently testing 3329. The next level is 3343. It is likely that we will see a bit of a retracement here. This may be a good place for a short scalp in the very short term. If you are looking to get long, it may be a good idea to wait for another dip. The Kovach OBV is still very bearish and it does not look this recent rally was able to budge it.
FX:SPX500Long
by quantguy
An End to the Stock Carnage?Stocks gave us hope yesterday with a nice rally up to 3343, a level we have identified. Unfortunately this was short lived and they were swiftly kicked back to lows 3264. What appeared to be a double bottom for stocks was breached further to establish new lows at 3242. The S&P has since bounced back to 3292. The bloodbath finally seems to be facing some resistance around current levels. We will have support at the psychological and technical level of 3200 if not. If stocks can muster another rally, 3343 is a good target for today.
FX:SPX500Long
by quantguy
Stocks Due for a Lift?Stocks caught a small bounce in the overnight session, likely a relief rally or overnight low liquidity drift. It has since almost fully retraced that small pathetic bounce. The S&P seems due for a relief rally, if not a recovery. There is only so long the stock market will soak in panic from all this coronavirus propaganda. We are currently sitting at support from the 23.6% Fibonacci level. There is a relative vacuum zone up to 3339, the next Fibonacci level, with only two levels in between: one at 3308, and 3329. The Kovach OBV has been very bearish but has stabilized for now. Let's see how it acts around the open. If we are wrong, stocks could continue their descent all the way down to relative lows at the Fibonacci Anchor at 3211, but that is a worst case scenario.
FX:SPX500Long
by quantguy
Stocks Take Another DiveStocks have taken another dive and are finding support currently at the 38.2% Fibonacci level, at 3339. The S&P has been slicing through technical levels without a single sign of a bounce. However this is a strong technical level and if this decline is to give pause, it would be around this level. We are due for a retracement, at least a relief rally, perhaps a minor corrective wave in the overall sideways Elliott Wave. The next major level will be the 23.6% Fibonacci level at 3290, which is significant because that would mean we'd have pierced the 3200 handle.
FX:SPX500Long
by quantguy