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My Bullish Bias Ends After 30 More Days Of VolatilityWe are possibly in Minuette wave 4 of Minute wave 3 of Minor wave 3 of Intermediate wave 3. Could see another strong day of movement tomorrow after a possible early morning drop. From here we could go UP toward 4185 by the close tomorrow DOWN toward 4148 by early Monday morning UP toward 4236 by mid-day Wednesday DOWN toward 4185 ( or whatever the top was on May 18th) before end of day next Thursday UP toward 4325 before end of close on May 31 DOWN toward 4196 on June 8th Final rally should put the top around 4400 before June 21st. Here is a snapshot with the estimated dates highlighted
SP:SPXLong
by StockSignaler
Good Start To Wave 3, More To FollowNow that last week has settled, it looks like PATH TWO was the chosen path from Like most of my analyses the original analysis is normally the correct one. Most premature analyses tend to rush a process that should otherwise be left alone. What does this mean? Intermediate wave 2 was later than initially projected and did not go as low per In fact, the analysis from last weekend using Minor wave A and B data indicated it would no longer drop to 3950. The likely floor would be no lower than 4000 and could break just below the end of Minor wave A which was 4049.35. The call for the bottom could have been at 4049.03 and for now the bottom was 4048.28. This low provides Intermediate wave 3 the room to gain the original projection of 300 over a few weeks, however Friday got a chunk of that. The projection for the end of Intermediate wave 3: Based on waves ending in 2BC3, Intermediate wave 3 could last 17, 42, or 48 days. The quartiles for potential movement (light blue lines) are a 110.75% extension of Intermediate wave 1, 302.37%, and 371.04%. Based on waves ending in BC3, strongest model agreement for length are at 12, 25, and 48 days. The quartile movement extensions (yellow lines) are 142.75%, 244.81%, and 261%. Based on waves ending in C3, strongest model agreement has Intermediate wave 3 lasting 12 or 25 days. Next strongest is at 24, 36, 50, and 62 days. The models become more diluted after that. The quartiles (white lines) are 144.13%, 209.13%, and 302.37%, respectively. In digesting the models, a slow wave 3 is not likely to occur especially with a diagonal trendline (thicker dashed red at top) which has been a pillar of resistance since Cycle wave B began in October 2022. 42 days long would put the end of Intermediate wave 3 around July 6th. The aforementioned trendline would be around 4424 at that point. 25 days long would place another potential wave ending around June 9th. The trendline would be around 4390. For Fibonacci traders this is pretty much at the 161.80% “Golden Ratio.” 12 days would be around May 19th, aligning with a 150% extension of Intermediate wave 1 at 4350. Another possibility is the diagonal resistance line is temporarily broken as a bull trap. This would mean the index strongly goes above the trendline before correcting significantly. We are near the end of the larger corrective wave which began in October. After the impulse wave up, we should have a drop in the index possibly over a single week before a quick move up again. If Intermediate wave 3 is shorter than Intermediate wave 1’s length of 25 trading days, then Intermediate wave 5 must be equal to or shorter than Intermediate wave 3 as Intermediate wave 3 cannot be the shortest wave. This is crucial to keep in mind. This is my most expected scenario if the index moves above 4300 within the next 7-10 trading days. I have laid out many possibilities and only time will tell, but I doubt Intermediate wave 3 is longer than 25 days, especially after a strong day 1 on Friday. I further expect the top to remain below 4393. I will continue to provide updates as the index moves along and completes the Minor waves inside of Intermediate wave 3. I am not settled on the end of Cycle wave B yet, but the current estimation is before the end of June. The potential catalysts for tops the summer remain Debt Ceilling Debacle and China action against Taiwan. A potential scenario for the end of Intermediate wave 3 is a temporary impasse on the debt ceiling vote in which the US defaults for a few days leading to Intermediate wave 4 or wave 3 ends when a band-aid 3 week extension is permitted. End of cycle wave B could be brought on if there is no solution by the end of June and no band-aid bill is passed. The China scenario would be a decision to invade Taiwan and taking control of the semiconductor chip market. All countries and products requiring chips would be impacted. Some companies have been working quickly to establish plants, factories, and resource mining in other places throughout the world, but China could cause chaos by taking more control of Taiwan.
SP:SPXLong
by StockSignaler
Post-Fed Update: Ignore Fed RedWe likely just finished Minor wave 2 with the low today or if another low is reached shortly after the open. The prior low at 4049 is the level to watch. A drop below this would likely place us on my prior analysis PATH TWO and continue Intermediate wave 2. Intermediate wave 3 still remains the likely location and the drop today would have been the Minute wave C we needed to finish Minor wave 2. As of now, strongest model agreement has Minor wave 3 lasting 6 days with next strongest models at 4 days. For waves ending in C33, first quartile move extension would be 150.48% of Minor wave 1, with the median move at 202% and third quartile at 396.60%. There is a horizontal trendline just above 202% so the end of wave three will likely remain below 4330. The drop today presents plenty of ground to be gained starting tomorrow. The overall end of Intermediate wave 3 could occur sometime before the final week in May. Right now the final market top appears on track for mid-June so a debt ceiling issue by June 1 may not be likely....yet. I should provide another update around the middle of next week if not one over the weekend.
SP:SPXLong
by StockSignaler
Tricks for Reading the VIXUnderstanding VIX Generally VIX measures the pricing of at-the-money options on the S&P 500 SP:SPX FOREXCOM:SPXUSD where such options have about 30 days until expiration. Higher VIX readings mean that demand for at-the-money options on SPX has risen through hedging or bearish positioning (usually both)—meaning that fear and uncertainty has arisen along with expectations of greater price movement (price declines) and volatility. In essence VIX tends to jump during major sell-offs in the S&P 500 and other global equity indices, and it also tends to fall back during long, gradual rallies. Its historic average is about 20. The average of all VIX closing numbers is about 19.4. Further, a VIX reading at 27–28 is at the upper end of one standard deviation from its mean. At the height of the 2008 recession, VIX peaked around 89.5 (intraday) and closed just above 80 several times. In March 2020 amid the Covid-19 pandemic, it surged to about 82. During the dot-com market from 1997-2000, the VIX held above its historical average (above 20) even though equity markets continued to drive higher for years. This was not a typical period for the relationship between VIX and markets with above average VIX readings coinciding with higher S&P 500 returns (33.1% in 1997, 28.3% in 1998, 20.9% in 1999). Understanding VIX Readings In General, High VIX Readings Help Spot Trading Lows or Lasting Market Bottoms VIX helps spot market bottoms. Some market experts assert that VIX is a measure of stress in the system, a measure of worry and fear as defined by various formulas derived from SPX puts and calls. Readings above 40 on the VIX tend to signal pure panic and indicate either an interim low (e.g., a temporary trading low followed by a bear rally) or a final bottom for a bear market or correction. The VIX measures implied volatility from a basket of at-the-money front-month SPX options. Ordinarily, VIX and SPX are supposed to head in opposite directions , meaning VIX climbs (or remains elevated) as SPX falls, and VIX falls (or remains low) as SPX rises. At least some other global indices that correlate to some extent with SPX would typically head in the same direction as SPX, but since VIX is derived from SPX derivatives (options), SPX will be discussed primarily. So the ordinary relationship between VIX and SPX is inverse as shown in the example on the main chart above for the 2000-2002 bear market. Lower SPX lows often coincide with even higher VIX highs. In the chart below, note how the VIX and SPX held to their usual inverse relationship during the 1998 SPX correction, which involving a decline of about -22% from the pre-correction high. As the market fell, the VIX continued to rise. Each SPX interim low was marked by a higher VIX high. Importantly, each VIX high was a "lower high" relative to the final VIX high that coincided with the final SPX low on October 8, 1998. Supplementary Chart 1: SPX 1998 Correction Shows Usual Relationship between VIX and SPX Divergences from the Usual Inverse Relationship between VIX and SPX May Distinguish Lasting Market Bottoms from Temporary Trading Lows But divergences from the usual inverse relationship between VIX and SPX can sometimes appear, and they may signal a lasting market bottom as distinguished from a temporary trading low . In particular, VIX will start to diverge from the usual pattern of higher VIX highs that coincide with lower VIX lows, meaning that SPX will make a new low but VIX will make a lower high rather than a new and higher high. This can be a helpful trick to understanding how VIX behaves at some major bear market bottoms and corrections. The primary chart above shows an excellent example from the 2000-2002 bear market. Consider the penultimate interim SPX low in July 2002. The highest VIX close of the entire bear market printed at 48.46 the day before this major interim low on July 24, 2002. (On the actual day of this interim low, VIX fell slightly to close at 39.86). Corrections also sometimes show this divergence from the usual SPX-VIX relationship. The chart below shows the 1990 correction in SPX where this equity market fell about -20%. Note the divergence between the major interim low in August 1990 and the final correction low in September 1990. Supplementary Chart 2: SPX 1990 Correction Shows Divergence from the Usual Inverse Relationship between VIX and SPX Although not shown in an additional chart, the bear market of 2008-2009 following the Great Financial Crisis contains another useful case study. During this bear market, the VIX peaked with closing highs above 80 in October 2008 and an intraday high of 89.53 on October 24, 2008. These were the highest VIX readings of the entire bear market occurring months before the final bear-market low. A VIX divergence appeared at the final bear-market low—VIX made a lower high of 49.33 and an intraday high of 51.90 on March 6, 2009. This is similar to the VIX divergence that was seen in the final stages of the 2000-2002 bear market (shown in the chart above). Broader Application of VIX-SPX Divergences This phenomenon of VIX and SPX diverging from their usual inverse relationship also may be stated more broadly as follows: when the VIX moves in tandem with the S&P 500, it’s a usually a sign that the trend may reverse . This occurs whenever VIX and SPX fall together or whenever they rise together. When the VIX and the S&P are both going down in tandem, this could present a good long-term buy signal especially when combined with other technical or fundamental evidence of a bottom. Furthermore this divergence from the usual inverse relationship can appear at market peaks as well. For example, when the market rallies higher, but the VIX remains elevated (it rises, does not decline significantly, and holds support), this indicates the rally could soon fail. A rally with elevated VIX shows persistently higher implied volatility / fear—increased demand for 30-day options based on expected volatility / demand for option hedges as downside insurance. This could be a sign the rally is fleeting.
Editors' picks
SP:SPXEducation
by SquishTrade
69
Next Short-Term Tops En Route To 4400With the likely conclusion of Minor waves (yellow numbers) 1 and 2, I am providing a short-term update. I have taken the final values from both of these waves to forecast the end of Minor wave 3. I originally had the entirety of Intermediate wave (pink numbers) 1 ending by April 6 around 4112, but that will now likely occur a little later. The centermost wave extension numbers relate to the likely end of Minor wave 3 and are based on historical movements considering the wave data from the completion of Minor waves 1 and 2. Minor wave 1 was seven days long, while wave 2 was two days long. Based on historical applications, wave 3 will likely last 6-8 days with a top between 4112 and 4135. Minor wave 4 would likely be a short drop and potentially only last 1-2 days. Intermediate wave 1 is now most likely around April 12 possibly near 4165. Intermediate wave 2-5 are still early projections and they will be updated in time. I have slid the end of Cycle wave (orange letter ‘b’) B back one more day for the moment with the final market top around June 20, 2023. It would still most likely occur at the top of the trend line as it is placed on this chart. The wave extension numbers to the far right relate to the likely end of Cycle wave B, Primary wave C, Intermediate wave 5 since they are all the same event. These levels and timeframes are based on the historical application of Cycle wave A and Primary waves A & B inside of the current Cycle wave B. Next week’s rise is likely attributed to a slow news week where ‘no news is good news.’
SP:SPXLong
by StockSignaler
1
S&P 500 E-mini Futures (ES1!), H4 Potential for Bearish MomentumType : Bearish Drop Resistance : 4200.75 Pivot: 4077.50 Intermediate Support: 4007.25 Support : 3948.25 Preferred Case: On the H4, with price moving below the ichimoku indicator, we have a bearish bias that price will drop from pivot at 4077.50 where the pullback resistance, 23.6% fibonacci retracement and 61.8% fibonacci projection are to the 1st support at 3948.25 where the pullback support, 61.8% fibonacci retracement and 161.8% fibonacci extension are. Take note of intermediate support at 4007.25 where the 127.2% fibonacci extension, 100% fibonacci projection and swing low support are. Alternative scenario: Alternatively, price could break pivot structure and rise to 1st resistance at 4200.75 where the overlap resistance, 78.6% fibonacci projection. 61.8% fibonacci retracement are. Fundamentals: Due to Powell's Hawish Remarks about monetary policy at the annual Jackson Hole Symposium, we have a bearish view on the S&P 500 Index.
CME_MINI:ES1!Short
by Genesiv
Theory 3 of 3 for SPX--MOST LIKELYI have narrowed the likely future paths down to 3 theories. THEORY THREE: Current position is Primary wave 4 of Cycle A of Supercycle 2. Theory 3 is on a faster path while the wave structure is similar to Theory 2. The preliminary bear market bottom would be in somewhere between Election Day 2024 and March 2025. The path for the next month would see the market move up for a few more weeks as it attempts to finish Primary wave 4 (SKY BLUE). It appears Intermediate wave A (PINK) has concluded and it is even possible the low 2 days later was the end of Intermediate wave B down. It remains possible for further downswing this week to complete Intermediate wave B but it likely will not pass below the June low at 3636.87. Wave B CAN go below this level but it would bounce above it quickly. Early models have Primary wave 4 lasting around 28 days, we are 9 days into it so far. IMPORTANT MOVES: There are no duration restrictions on future movement at this time. A break above 3945 before a drop below 3636 would continue to keep this theory in play. PROS: This model appears to be riding election cycles. After Primary wave 4 ends, the market will swoon down again for a few more months with the bottom occurring around October/November this year. The 6-12 months afterward would move up before the final leg down takes the market to around 2400. The correction at the beginning of the millennium saw the overall decline last for about 9 years (March 2000 – March 2009). This was a larger macro event then our current correction. A 2-4 year correction makes more sense for this micro wave set we are likely in. CONS: Negatives are not glaring with this model at this time.
SP:SPX
by StockSignaler
Finally time to buy the dip...in 2 weeksI warned of this bull trap and we should now be in the final leg down. Today’s close kissed the top of the trend channel as it remained in the projected zone discussed in my recent analysis. The market could open up tomorrow, but most likely should not. Today’s highs should not get tested for at least a few more weeks. Next stop is the basement of this bear market. To recap, all five purple boxes were general estimates of where each wave should end IF Primary C were to last 37-46 days while it drops 863.93-1117.41. So far, the end of waves can be identified in each box. If the prior analysis is accurate we should bottom no later than June 3rd. The larger green box was the estimated market bottom based on relationships between Cycle waves 1 and this wave 2 as well as Primary waves A and B in relation to this wave C. The better news is that the intermediate wave data not only fit in the larger box, it narrowed the target zone. I have a final few data points that could further narrow the target bottoms. I calculate the wave extensions which determines the percent that wave 5 moves in relation to wave 3 while using the same starting point which was the end of wave 2 (beginning of wave 3). Considering all intermediate wave 5 data, the first quartile of data states that 75% of all intermediate wave 5s move at least 110.98% of wave 3’s movement. The 50% of all intermediate wave 5s move 127.12%, while 25% of all data extends 147.53%. Additionally, the average move is 136%. All of these levels are identified on the chart with the light blue lines. I further studied intermediate wave 5s inside of Primary C waves. These levels utilize the green lines on the chart. This data has 75% of the intermediate wave 5s moving 110.98%, 50% moving 120.85%, 25% moving 133.13%. The average move is 123.53%. Nearly all of these data points land in the large green and small purple target boxes previously mentioned. All told my target bottoms appear valid. Time will tell, but we are looking at another rough drop (around 10%) in about 2 weeks. I still think an end to the Russia-Ukraine conflict is the only thing to reverse markets quickly. That war will likely only come to an end if something happens to Putin.
SP:SPXShort
by StockSignaler
Now its Easter Inflation Rally ModeINTERMEDIATE WAVE 1 It is likely we have ended this wave although technically the index could still go lower for one more day. This analysis is based on the assumption we have ended wave 1 on April 11 as originally forecasted. INTERMEDIATE WAVE 2 With wave 1 lasting only 9 days, I am expecting wave 2 to last 3-4. Most of the models agree at 4 days. Day 4 would be the Monday after Easter. My gut is leaning toward 3 days as there is a market holiday on Friday. It is most likely there will be lighter trading or jubilation at the start of earnings season that is dashed quickly (next week) by a rockier short-term inflation drag on future outlooks. Plus 3 days away from the markets can lead to longer uncertainty (Russia, Middle Eastern conflicts, oil, etc.). We do not have many price targets, but should see a decent rally for this holiday shortened week. It is likely the inflation numbers are swallowed better than expected starting tomorrow. We are looking at a 2.5% rally with potential tops above 4500. Historically wave 2’s ending in 32C2 retrace 58-70% (4522.84-4570.16) of wave 1’s movement. History says this is possible, but my more conservative target is 38-50% (4495-4522). This movement will also contain an ABC upward pattern, where wave B is downward. All price targets are: 4491.75 which is 36.42% retracement of Intermediate Wave 1 as ended on April 11 4496.95 ----------- 38.69% 4520.05 ----------- 48.78% 4525.52 ----------- 51.17% 4541.43 ----------- 58.12% 4551.46 ----------- 62.50% 4570.16 ----------- 70.67% 4585.15 ----------- 77.22% 4601.47 ----------- 84.35% 4614.27 ----------- 89.94% INTERMEDIATE WAVE 3 Intermediate wave 3 is where we am forecasting the most significant downward movement still. This could be Russia related, but it will also occur during the bulk of earnings season. Our guess is the economic outlook, inflation, interest rates, transportation costs, along with the Fed’s pace and rate of rate increases will take center stage during earning calls. This outlook may look bleak in the near-term, but we continue to anticipate the market to find its bottom before the end of the summer and as early as mid-May. We will have Intermediate wave 3 forecasts once we appear to finish wave 2 (with the first projections this weekend). Feel free to follow us for more historical statistics and projections!
SP:SPXLong
by StockSignaler
SPX's Head & Shoulder Pattern 101 !!!what Is a Head and Shoulders Pattern? A head and shoulders pattern is a chart formation that appears as a baseline with three peaks, where the outside two are close in height and the middle is highest. In technical analysis, a head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal. The head and shoulders pattern is believed to be one of the most reliable trend reversal patterns. It is one of several top patterns that signal, with varying degrees of accuracy, that an upward trend is nearing its end. KEY TAKEAWAYS A head and shoulders pattern is a technical indicator with a chart pattern of three peaks, where the outer two are close in height and the middle is the highest. A head and shoulders pattern—considered one of the most reliable trend reversal patterns—is a chart formation that predicts a bullish-to-bearish trend reversal.
SP:SPX
by samitrading
25