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Free Market vs The FedAs of late, the vast majority of us probably have been hearing about "too big to fail" or " a free market vs. a central market" What does all of this mean?" Well, let's go over some of the basic stuff. As in some of my prior posts, it is important to understand that the "Fed" does NOT control mortgage rates or loan rates from your local banks. Let me repeat that the Fed does NOT control mortgage rates or consumer loan rates So now you might ask yourself why the Fed raises rates matter? Well, that's a great question. Because, in short, it should not matter if we were in a free market. Well, sadly, we are not in a free market. We are in a centralized market with different flavors available to us. "Ah, but Guy, you just contradicted yourself by saying the fed does not control mortgage rates, and now you're saying we're in a controlled market rabel rabel rabel " Let me explain... The Fed cannot have any direct contact with "average" consumers; it's currently illegal FOR NOW . Now, everyone, the biggest fear with CBDC is a rightfully placed fear. And we will discuss this in a separate post. So, view the Federal Reserve's manipulation of the economy as a game of pool (billiards) or snooker; what have you. In billiards (for the purpose of the post, billiards = pool), the player cannot directly hit the numbered balls with the stick (cue). Instead, one must use a medium to engage the cue ball. So, to pocket your balls, you must have a small degree of understanding of physics to transfer energy from you to the stick to the cue ball to the desired ball into the desired pocket. The Fed (cue) is the same way. They set the FFR (cue ball), which then goes to the regional and big banks (numbered balls), which then sink into the economy (pocket) So, how does this work? To explain that, you need to understand how a bank makes money. (The Following is highly watered down for simplicity's sake) A bank does not make money because you have an account with them. On the other hand, a bank makes money BECAUSE you have an account with them. So when you use your local JPM, WFC, or C bank :) as a piggy bank, they pay you an interest rate of something like a percent of a percent; however, it's still considered a liability to the bank because that's cash flow going to you from them even if it's a penny a year. So, how can they make money then? The fractional Reserve system. Mike Maloney debates this, and I'm super interested in hearing his thoughts on this... another post for another time. What is the Fractional Reserve System? Basically, for every dollar you put into your account, the bank can lend out 10$ It's basically in place because you're not running to the bank to close your account. So, they can do this. When you put money into your account, it's already out the door into someone else's pocket in the form of a loan by the time you place your wallet in your pocket/ purse what have you. And that's probably too slow for the bank. (velocity of money) Well, that bank's balance sheet of physical liquid cash probably only is enough to pay the onsite staff hourly wage the bank needs more. so they have one of two options 1. go to the Fed and borrow money at the FFR 2. go to the repo market and borrow from another bank by offering t-bills and bonds as collateral. (shadow banking) Typically they go with number one because it's cheaper. The vast majority of times they use the repo market is for cash now! or if their risk management department is trying to make some quick cash off the bond market. (shadow banking is outside the purview of this post, and I'm still learning about it. I will post about it later) ( the fed lining up their billiard shot) So, the Fed has decided the US economy needs to grow more... (the Fed hitting the cue ball) So, lets say the Fed makes the FFR 0% (hypothetically LOL) ( the cue ball hits the numbered ball) So your local JPM will go to the Fed and take out a loan at 0%, so they need to lend this money out and make money, and make their, JPM's rate, interest rate on that money 3% LOL! (The numbered ball sinks into the desired pocket) you the consumer want to go out and buy something you can afford on your 9-5 salary. So you go to the bank and qualify for a loan at their 3% rate to be amortized over 10-30 years, and the economy grows. If that sounds familiar its coincidence LOL However, in a free market how it would work is the loan system would be heavily dependent on the local economy and local wage potential. How? If a bank is set up in an area with low-income earning potential, then the market will tell the bank exactly how much they can charge on money. Example: let's say the Risk Manager at your local WFC decides he is conservative and makes the DTI Ratio for loans 30%. That means the minimum someone must make for a 200,000$ loan is around 60,000$. If the local median income is 45,000$, no one can afford a 200,000$ loan. The maximum loan amount they can make is around 150,000$. So, for the bank to grow, it either needs to up the DTI requirements, it needs to be content with its current earnings and hope the area grows or wages increase, or it can close down and move. Now where the free market comes into play is when WFC is having their DTI at 30%, JPM is at 40%, and C is at 60%, (free market remember) in the same area as the example The following happens: WFC sees their default rate is less than 10% JPM sees thier default rate at 40% C sees thier default rate in the upper 80%. So, what this means is that the market is telling WFC they are leaving money on the table but are playing it safe. Because less people qualify for the loan JPM has almost found the sweet spot. 40% of their loans are in default, but more than half are paid on time. could use some minor tweaking but solid none the less. (With my risk tolerance, 30-35% default is a good number depending on loan size.) C is in trouble because they have lent out too much, and people can't afford that much money in the area. So in a free market, WFC will fail in the area because they're not seeing enough volume, and C will fail because they're seeing too much volume. which leaves JPM to buy up both of the failing banks and grow bigger LOL!
OANDA:SPX500USD
by ARegularGuy
The Deflationary SpiralAll credit booms brought about by Central Bank-induced artificially low interest rates and loose lending standards end in busts. In the recessionary phase that follows the boom, credit becomes much harder to attain and many over-leveraged businesses end up going bankrupt. The recessionary phase reveals the malinvestments and unsound business decisions that were made during the economic boom. Businesses & Consumers deleverage their balance sheets either through paying down debt or through bankruptcy. As loan demand falls & credit conditions tighten, debt issuance falls, which reduces the supply of money into the economy because the vast majority of currency that enters the economy is loaned into existence. When credit growths slows and begins contracting alongside a falling money supply, inventory piles up and profits & margins fall while consumer spending falls. Businesses are then forced to sell at discounted rates to liquidate inventory in anticipation of weak future demand, which further reduces profits & margins and leads to increased unemployment and weaker levels of consumption. The “Deflationary Spiral” subsides and an economic recovery can take place once balance sheets are back to healthy levels which can support debt accumulation, capital investment recovers, and once large amounts of the “bad” debts taken on during the economic boom have been deleveraged. US M2 Money Supply is currently down -4.2% YoY using March 2023 data, the largest monetary contraction in the USA since the Great Depression. Using data going back to 1870, every time the money supply contracted by over 1% YoY the stock market had a large correction and the economy fell into a severe & lengthy contraction with unemployment reaching at least 7%. A banking panic always accompanied those contractions as well. Commercial bank deposits are currently down around -5% YoY, the most since the Great Depression. Total commercial bank deposits didn’t even contract during the early 1990s Savings & Loan Crisis. With money supply shrinking and the majority of banks unable to pay competitive rates on deposits, deposits will continue falling and more bank failures will occur. The large amounts of unrealized losses on bank balance sheets represent another impediment to loan growth and banks have continued to raise reserves for multiple quarters in response to rising default rates. Fed research from the Fed Bank of Saint Louis show bank lending conditions (measured by percentage of banks tightening lending conditions) are comparable to early 2008 & late 2000. Bank lending conditions are a leading indicator for unemployment. The unemployment rate currently is still below 4%, but with the Conference Board’s Leading Economic Indicators index currently at -7.2% and the bond yield curve still inverted, many reliable economic datapoints show that the economy is closer to the beginning of this business cycle downturn and debt deleveraging than the end. Yield curve inversions & Conference Board LEI’s have been some of the best leading indicators for a recession since the 1970s. Since 1968, any Conference Board LEI contraction of more than -2% YoY has never yielded a false positive in regards to a coming recession. The Credit Managers’ Index newly released data for April showed that the index for rejection of new credit applications (within the service sector) was 45.9, its lowest level since March 2009. The US Consumer is beginning to run dry on savings. The majority of Americans are living paycheck to paycheck and consumer credit growth (which had been expanding rapidly in 2022) has slowed markedly. Total consumer credit growth has fallen about 50% YoY (using the 3 month average of data from December - February). After falling below 3.2% in the summer of 2022, the US savings rate is still low by historic standards, currently 5.1%. Announced job cuts for the month of March were 89.7K, higher than the first 3 months of the 2008 recession. US large corporate bankruptcy filings (Bankruptcies of companies with over $50M in liabilities) from Jan-April totaled 70, seven more than during the same length of time in 2008. Student loan debt payments are set to resume again this summer, which will further reduce consumer spending. US Consumer sentiment levels measured by University of Michigan hit the lowest levels ever (going back to 1952) in the summer of 2022, and they have been fluctuating around 2H 2008 & 1H 2009 levels ever since. Delinquency rates on things like automobiles, credit cards, and commercial real estate loans are soaring. Cox Automotive found 1.89% of auto loans in January were "severely delinquent" and at least 60 days behind payment, the highest rate since the data series began in 2006. In March, the percentage of subprime auto borrowers who were at least 60 days late on their bills was 5.3%, up from a seven-year low of 2.58% in May 2021 and higher than in 2009, the peak of the financial crisis, according to data from Fitch Ratings. Retail sales are an economic metric that track consumer demand for finished goods. US real retail sales down -2.1% and EU real retail sales are -9.9%. German real retail sales for the month of march just came in at -15.8% YoY! According to Bloomberg, Global PC shipments are down close to 30% YoY & Apple computer shipments are down about 40% YoY. In the past 50 years, US Gross fixed capital formation has only gone negative in the US before and during recessions. It is now negative and there has never been a false positive. Data from the Mortgage bankers association showed a -39% YoY decline in Mortgage purchase applications, a decline to its lowest levels in over 26 years. US Building Permits are down -24% YoY. Housing Starts YoY are down -17% YoY. Existing Home Sales are down -22%. Every national housing downturn in the past 45 years has taken at least 4 years from peak to trough prices, indicating that the current housing downturn is likely to continue for at least 2-3 years. Every FED Regional bank report on manufacturing (using a 3 month average of the data) is in a contraction. The April Philadelphia FED Manufacturing index came in at -31.3. Since 1969, Every reading under -30 was either in a recession or a few months away from one. April Richmond FED Service Sector Index registered a -23, the same number as in Nov 2008 & Feb 2009 & worse than Jan 2009 which was -20 (August and September 2008 were -10 for reference). US manufacturing production is down -.5% YoY. March 2023 ISM PMI data was also very insightful. USA ISM Manufacturing PMI (March) was 46.3, its lowest level since June 2009 (excl. H1 2020). For reference, in the 08 recession, it wasn’t until October 2008 that the ISM manufacturing PMI fell under 46.3, over 9 months into that recession. USA ISM Manufacturing New Orders (March) was 44.3, its lowest level since March 2009 (excl. January 2023 & H1 2020), USA ISM Non-Manufacturing PMI (March) came in at 51.2, its lowest level since Jan. 2010 (excl. H1 2020). The US Stock market is trading at one of the highest Shiller PE ratios & stock market capitalization to GDP ratios in history. Present day stock market valuations are rivaled only by the Roaring 20s Bubble (1929), The Nifty-Fifty Bubble (late 1960s/early 1970s) & the 1999/2000 Dot-com Bubble. All 3 of those examples were followed by the most negative 10 year real returns in USA stock market history going back to 1913. Over 40% of businesses in the Russell2000 are unprofitable and over 1/5 of the S&P500 are zombie companies. Clearly, the stock markets as of April 2023 are still in bubble levels of overvaluation. Looking at the data in aggregate, I believe that a recession is currently occurring. Assuming earnings fall by about 30% peak to trough, using a conservative average from the past 4 US recessions, I assume S&P annualized earnings will fall to around 155. Using a conservative valuation multiple of 14, that gives a target price of about 2,200 for the S&P500 that is likely to be hit in Q4 2023 or 2024. Thank you for reading, Alexander Charles Lambert
AMEX:RSPShort
by Alexander_C_Lambert
Pre-FOMC Tantrums or Some Concerning Ailment?S&P 500 INDEX MODEL TRADING PLANS for TUE. 05/02 In our first trading plan of this trading week - published yesterday, Mon. 05/01 - we wrote: "With the FOMC meeting this week, everything else takes a second place until Wednesday. Expect a push-and-pull action in the markets heading into the event. If you are not a nimble trader, wait until the event is over for any directional trading. Most of the market action in the last few sessions appears to be driven by short squeezes rather than any directional conviction. Our models indicate no clear trend emerging until after Wednesday. Bulls need to be cautious about sudden spikes lower, while bears need to be cautious against taking on any shorts prematurely." The "sudden spikes lower" we mentioned are manifesting this morning - whether it is indicative of the typical "market tantrums" before FOMC day, or whether it is an indication of the banking-sector related anxiety developing into some ailment might become slowly apparent after the FOMC event tomorrow. Positional Trading Models: Our positional models, while flashing early bearish signs, indicate no trading plans for today. By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session. Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today. Aggressive, Intraday Trading Plans for TUE. 05/02: For today, our aggressive intraday models indicate going long on a break above 4104, 4138, 4160, or 4168 with an 8-point trailing stop, and going short on a break below 4098, 4127, 4157, or 4164 with an 8-point trailing stop.  Models indicate explicit long exits on a break below 4132, and explicit short exits on a break above 4132. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:31 am ET or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #fed, #stocks, #futures, #inflation, #recession, #bigtech, #earnings, #FOMC
SP:SPX
by TradersAIDotCom
FOMC Fight Against Inflation is the Real Game in Town this Week!S&P 500 INDEX MODEL TRADING PLANS for MON. 05/01 With the FOMC meeting this week, everything else takes a second place until Wednesday. Expect a push-and-pull action in the markets heading into the event. If you are not a nimble trader, wait until the event is over for any directional trading. Most of the market action in the last few sessions appears to be driven by short squeezes rather than any directional conviction. Our models indicate no clear trend emerging until after Wednesday. Bulls need to be cautious about sudden spikes lower, while bears need to be cautious against taking on any shorts prematurely. Positional Trading Models: Our positional models, while flashing early bearish signs, indicate no trading plans for today. By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session. Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today. Aggressive, Intraday Trading Plans for MON. 05/01: For today, our aggressive intraday models indicate going long on a break above 4177, 4153, or 4137 with an 8-point trailing stop, and going short on a break below 4170, 4148, or 4133 with a 9-point trailing stop.  Models indicate explicit long exits on a break below 4159, and explicit short exits on a break above 4164. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 10:41 am ET or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #fomc, #fed, #stocks, #futures, #inflation, #recession, #bigtech, #earnings
SP:SPX
by TradersAIDotCom
S&P MAJOR Pivot Point back to 2009 LOW - LOWER Prices likely!!Markets are at MAJOR Pivot point around this Trend Line connecting 2009 GFC Low at 666 to today's CLOSE and last DECEMBER 2022 High. Markets typically get rejected off this resistance and have been rejected every time since 2009 EXCEPT when we had LOW Interest Rates + PPP after Covid. That is ONLY time markets broke ABOVE this line. We broke Below this line in 2022 drop and its proven to be a major pivot point with prices struggling to stay above it. Most recently Price was rejected from this line in Dec 2022. We are retesting it again after Breaking the Downtrend Line from 2022 that everyone thinks means that we now have a "melt up". Current S&P Price is at May 2021 levels when we had ZERO Interest Rates and PPP. We are ON this Resistance/Pivot Line. CPI Data comes out in the morning. Probabilities suggest the market gets rejected and goes LOWER not higher. Despite the break in downtrend. For those of you that think Breaking a down trend and melt up is imminent go back and look at S&P chart in March - May 2008. The SAME Exact pattern as is being formed today occurred before the market tanked lower for next 12 months from May 2008 to 2009 low. Trade what you see...
CBOE:SPXShort
by eganon69
4
Market AnalysisUnemployment claims are lower than expected (down) GDP is only 1.1% (the dollar will rise slightly) Personal expenditures are fronted by 1%, soaring to 3.7% (bad) Core PCE increased from 4.4% to 4.9% (bearish) Analysis: The U.S. economy is worse than expected and has clearly entered a recession. However, inflation and personal consumption are set to soar, proving that QT isn't enough. After this data, big possibility for FED to raise more interest rate. The stock market and crypto will at least dump for another 10% or more. Personal market analysis, for reference only
Short
by INFINITY8CADEMY
SPX MODEL TRADING PLANS for THU. 04/27Big Tech Earnings to Trump Economic Slowdown Concerns? Yesterday evening's strong earnings from Meta seems to be adding to the tone of impressive earnings from Microsoft, Google, McDonalds, and Chipotle that all seem to demonstrate that major firms have pricing power to absorb the inflationary pressures. Continued big tech earnings momentum into the next week, peaking with Apple's earnings next Thursday, might try to buoy the markets into the next few days. It remains to be seen how sustainable this push up would prove to be. Our models show no bullish trend in sight for these markets, at least for now. Bears need to be cautious against taking on any shorts prematurely. Positional Trading Models: Our positional models, while flashing early bearish signs, indicate no trading plans for today. By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session. Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today. Trading Plans for THU. 04/27: Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 4115, 4108, 4100, or 4085 with an 8-point trailing stop, and going short on a break below 4104, 4096, or 4088 with a 9-point trailing stop.  Models indicate explicit long exits on a break below 4111. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 1:01 pm ET or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #fomc, #fed, #stocks, #futures, #inflation, #recession, #bigtech, #earnings
SP:SPX
by TradersAIDotCom
S&P500 at resistance zone... where next?SPX at resistance where last breakout reversed and came back down to retest the trend line. Trendline held and SPX rose back and is now near the resistance level. Notice the lower volume over the past few trading periods as the price has neared resistance. Do you think it will break above resistance or fall back for a second retest? Haven't checked the Put/Call ratios yet on SPY but that would probs give an indication of where the smart money is going.
SP:SPX
by TC85
SPX Model Trading Plans for FRI. 04/21Markets Struggling to Gain Some Traction - Day 2 Despite the initial downward momentum post-PMI release this morning, markets still seem stuck in the tug-of-war between the "Inflation peaked" optimism and the "recession onset" concerns, and the earnings season so far has failed to give either the bulls or the bears any real traction. Whether the earnings next week will help the markets gain momentum in either direction remains to be seen. Our positional models continue to be in an indeterminate state until further notice. Positional Trading Models: Our positional models indicate no trading plans until otherwise published. By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session. Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today. Trading Plans for FRI. 04/21: Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 4150, 4134, or 4123 with an 8-point trailing stop, and going short on a break below 4146, 4129, or 4120 with a 9-point trailing stop.  Models indicate no explicit exits for today. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:01 am ET or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #fomc, #fed, #stocks, #futures, #inflation, #recession
SP:SPX
by TradersAIDotCom
Increasing Confusion.Hi. I want to show you two SPX charts, one for 4H and other for 2W. And tell you why I chose them, as well as how uncertainty can affect the price. Left screen. Enough signs for a decrease. 1. Spin top. 2. Gap down. 3. Tenkan-Sen break. 4. Bearish divergence. We can say that the next month will develop a downward movement. But in what larger situation is this movement embedded? Right screen: In lifetime of most of us, SP500 did not make such long swings in the cloud such size. There are subtleties here. 1. Kijun-Sen has crossed Tenkan-Sen again. Candles over of lines. Kind of a bullish picture... But this crossing is inside the cloud. 2. Tenkan-sen is dangerously looking down and may well cross Senkou-Span B. 3. Senkou-Span A is looking downward, hinting at a possible downward expansion of the cloud... The thinking is simple. If 4H chart has started a down movement, it is enough for a month or even 5 weeks. During this month, two candles down on 2W chart will cause the indicator lines form a cross with bottom edge of the cloud, and given timeframe it will be an ultra-bearish signal. This is what I wanted to show. One timeframe can start a process on another timeframe. Given DXY strengthening, none of this looks rosy.
TVC:SPX
by averkie_skila
1
SPX Model Trading Plans for THU. 04/20Markets Struggling to Gain Some Traction Markets seem stuck in the tug-of-war between the "Inflation peaked" optimism and the "recession onset" concerns, and the earnings season so far has failed to give either the bulls or the bears any real traction. Whether the earnings ahead will help the markets gain momentum in either direction remains to be seen. Our positional models continue to be in an indeterminate state until further notice. Positional Trading Models: Our positional models indicate no trading plans until otherwise published. By definition, positional trading models may carry the positions overnight and over multiple days, and hence assume trading an instrument that trades beyond the regular session, with the trailing stops - if any - being active in the overnight session. Intraday/Aggressive Models: Our aggressive, intraday models indicate the trading plans below for today. Trading Plans for THU. 04/20: Aggressive Intraday Models: For today, our aggressive intraday models indicate going long on a break above 4134 with a 12-point trailing stop, and going short on a break below 4128 or 4120 with a 9-point trailing stop.  Models indicate long exit on a break below 4143. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 11:45am ET or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #fomc, #fed, #stocks, #futures, #inflation, #recession
SP:SPX
by TradersAIDotCom
Hit the target top, now for the bottomIf Intermediate wave 1 is finally done, it was a few days late, but on target. Next forecast is for Intermediate wave 2 which should see the anticipated market decline over the next 5-12 days. This means the bottom should occur prior to May 2. As of now, Intermediate wave 1 was 23 days long. Waves ending in 2BC2 have been 20-50% the length of their first wave’s length. The projected retracement percentages have not change, but the values have slightly as the initial estimates were based on Intermediate wave 1 topping at 4160. The most specific datasets correlate to the retracement levels in light blue. The 33.44% value represents the first quartile of historical movement for waves ending in 2BC2. The median is 60.60% and the third quartile is 77.87%. The next specific values are in yellow and the are tied to historical waves ending in BC2. The third quartile is not displayed in yellow because it is also the 77.87% from the first dataset. The length of wave 2 based on this slightly larger dataset has it lasting 5-12 days again, with the strongest model agreement on 7 days. This could put the bottom around April 25. The final set of values are based on a larger and broader dataset based on the behavior of waves ending in C2. These values are in white and the median value is omitted because it is close to the yellow value of 67.86%. The strongest model agreement suggests wave 2 could last 23 days (18 models) followed by 8 days (14 models), 12 days (12 models), and 7 days (6 models). Declines could be related to earnings and speculation on the Fed which will provide the next rate hike determination and hint toward the future during the first week in May. Based on all the data, I am placing the bottom around 3922-3950. This will depend if the index starts moving down tomorrow or if another new high is reached. After this next bottom we should jump into the final strong rally of this uptrend possibly gaining 350-450 points over the course of 4 weeks. A perfect catalyst for this would be the Fed doing what is expected and hinting at a pause on rate hikes. While I do not agree it is a smart thing to do, it will be one of the many catalysts for the massive declines set to begin around mid-late June. Let’s play the drop, the big gain, and then its prevent defense time (after wave 4 down and wave 5 up).
SP:SPXShort
by StockSignaler