Get started

Spylong

SPY Analysis (Mid-August)This post is in response to requests for me to give a shorter-term analysis of where SPY might go. Right now the outlook is generally neutral or muted with both bullish and bearish biases battling it out. I will present both bullish and bearish cases for you to weigh. Bull Case Daily chart: On the daily chart, SPY is clearly in an uptrend. It has broken the downtrend line that was in place throughout the first half of 2022, and it has pierced the Ichimoku Cloud, which indicates a trend reversal. One could argue that SPY's muted movement on the daily chart in August is consolidation before a move higher. Some may argue the daily chart is an ascending triangle, which is bullish. Advance-Decline Line: The ADL has broken out on the daily chart, which strongly suggests "the bottom" is already in. Volatility: The daily VIX chart suggests the uptrend in volatility that existed in the first half of 2022 may have broken down. Quantitative Tightening: Many analysts believe that the Fed will not tighten as much as it has projected and that it will pivot to less tightening, which is good for stocks. Bull Run: Log-linear regression supports the conclusion that the bull run since the Great Recession has not broken. Unemployment: The unemployment rate is at a historic low, this will support consumer spending. Historical analysis: Using historical analysis that takes into account the entire history of its price action, it's statistically probable that SPY will close the year higher than the close of June. Oscillators: The monthly Stochastic RSI is trending back up which will likely carry SPY higher into the close of 2022. Inflation: With inflation subsiding in the short term, this may create a tailwind for the stock market. Accumulation: The daily chart of SPY appears to show Wyckoff accumulation in my opinion. This means that smart money has been buying. Bear Case Weekly Chart: As you can see in the chart above, the weekly chart of SPY is still largely in a downtrend with overhead resistance/supply. The Stochastic RSI is ready to oscillate back down which may bring prices lower. Advance-Decline Line: The ADL is moving back down on the daily chart and still remains suppressed on the higher time frames. Volatility: The weekly VIX chart is near support and its weekly Stochastics RSI is ready to oscillate up. August through October generally sees higher volatility. Further, the VVIX or volatility of volatility is extremely compressed. Seasonality: August through late-October typically see muted stock market returns, if not actual declines. Yield Curve Inversion: The 10Y/2Y yield has reached an extreme level of inversion indicating a significant recession is likely in the coming year(s). The 10Y/3M is also nearing inversion. Although these are leading indicators, and markets usually go up after these are triggered, immediately after they're triggered some investors get jittery and stay on the sidelines. Quantitative Tightening: The era of limitless quantitative easing is definitively over and we're now in a period of unprecedented quantitative tightening. It's highly unlikely that the FED will act in ways that are favorable to a sustained strong bull rally. Stock market returns are likely to be muted, if not outright decline, for years to come. Bull Run: Log-linear regression shows that the post-Great Recession bull run is nearing the end of its lifetime. Multi-timeframe regression analysis shows that there is a 97.5% chance that the bull run that existed since the Great Recession will end within the next 6 years. The rapidity with which the yield curve has inverted leads me to believe that the bull run will end in 2023. Unemployment: Although the employment rate is historically low, this is a lagging indicator. The leading indicator is the weekly initial unemployment claims, which is rising rapidly and at a rate that far outpaces what we saw at the start of the Great Recession. Many people who are losing their jobs now are filling the many vacancies left opened from an overheated economy, which may be why the unemployment rate dropped despite rapidly rising initial claims. Unless the weekly initial claims cool down, this could become a major problem in the months, if not years ahead. Oscillators: The yearly Stochastic RSI looks dangerously close to beginning a years-long process of oscillating down. If this occurs, SPY will at minimum mean revert on its quarterly chart (~340), and at worst fall below the 2nd standard deviation on its quarterly chart (~200). Accumulation: Although the daily chart of SPY appears to show Wyckoff accumulation (in my opinion), smart money loves to flush out longs and trap shorts by forcing prices back down. It's very possible that a price drop that is meant to flush out the longs may happen between now and late October. Geopolitics: The global geopolitical landscape looks very poor right now. Even if the US and China avoid any kind of military engagement, the effects that the situation is having on the economy are already significant. These tensions are accelerating de-globalization which will continue putting inflationary pressures on the supply side, even as the Fed tries to cool demand through tightening. How I am playing the market from mid-August to Late-October: I will play cautiously and defensively as there are bullish and bearish forces battling. The long positions I entered into in June are on trailing stop losses. Many have already been triggered. I am long the VIX until October or the weekly oscillator moves up and appears ready to come back down. I am cautiously adding a very few long positions using regression channels (and other indicators) as there are several beaten-down stocks out there that are quite cheap and unlikely to go down much more. (e.g. I've been saying it for a while but VFC will not get much cheaper than low to mid-40s). I will be long TLT and bonds after they correct on the weekly or if the 10Y rate moves back up close to the terminal rate, and if the Eurodollar Futures are stable. I am avoiding new long positions in crypto until the end of September because August and September are typically the worst performing months for crypto. (I still hold positions I bought in June which are profitable but will sell if crypto drops below my stop loss triggers). Not financial advice, these are just my thoughts. Trade at your own risk.
AMEX:SPY
by SpyMasterTrades
15
SPY Weekly calling for a push to 530ish on the Fib EXTIf we gauge the last major moves on SPY with Covid being the last in 2020 we can see the same pattern coming to and end on the current weekly SPY, using the fib ext paired with the RSI and MACD we can clearly see a jump to 530 on the weekly in SPY's Future. Also note that the relative strength index just crossed up over 50 and the MACD just crossed up as well. All indicators on the weekly are calling for a rally and could last up till DEC
AMEX:SPYLong
by impossiblebull
SPY Trade Idea (BULL TRAP)Here Im using the trend based fib ext. SPY is currently at the June highs and the 1.618 Fib level. Seeing deviation with price making a higher high and the RSI making a lower low on the 4HR. (Bearish) In June fear turned to euphoria in an instant. Talks about the bear market being over started, just like it is now. Spy fell out of an ascending channel after initially getting rejected from the 1.618. (Bearish) In June it took about a week to finally sell off and bull market talks faded in the. background. I think we see a similar story in the next few days and weeks. If you're bullish i would be patient, things dont go up in a straight line. The RSI on the daily is at levels not seen since March. VIX is on a strong support which has generally marked local tops. If you notice there has been 3 times we previously touched this support and every time has been a sell signal. Same goes with the top resistance, every time we touched resistance it marked a local bottom in the stock market as you can see with the red and green arrows. In the coming weeks I am bearish on SPY and anticipate a retest of 390, a break below that and the next level is 380. However coming off one of the best months in a long time the medium to long term future looks bright for the stock market. We look to be forming a possible inverse head and shoulders pattern on higher time frames and if this is the case we should see strong support in the 380-390 range. (This is where Im swinging long if the market gives us these levels). I would also like to see VIX at resistance to further confirm the trade. I wouldn't be surprised if VIX broke out of this wedge, and give us the 40+ everyone has been calling for which if in fact we do reach those levels on VIX i think that would be the max opportunity to go long on the market. We will cross that bridge when/if we get there. Ill soon be posting ideas on individual stocks, let me know if you guys agree or disagree!
AMEX:SPY
by anamaly
Market Analysis: SPY PerformanceIn this post, I will give a market analysis focusing on the current status of the S&P 500 ETF (SPY). As you can see in the chart above, SPY broke out above the exponential moving average ribbon (yellow and orange) lines. Increased volume confirmed the breakout. The ribbon continues to narrow which also confirms the breakout. Moving averages converge during the consolidation phase prior to a breakout. However, there are quite a few signs that are still bearish. First, the VIX is at the bottom of its trend line and both the daily and weekly oscillators for the VIX are ready to move back up. This creates a strong directional bias toward greater volatility in the coming days and weeks. Second, another headwind for the SPY is that we are heading into a bearish part of the year: August and September. Look at the below seasonality chart for August and September. Third, due to extreme bearishness, market participants have begun to respond extremely bullishly to any news with a glimmer of hope, even when the news is largely bad. For example, today the Fed indicated that it would hike interest rates another 75 basis points (continuing an historic rate of change) and then, in September, start to accelerate the roll-off of assets from its balance sheet. In a normal context, the market would crash on such news, but today it rallied strongly. Even though these Fed actions will, to a very high degree of certainty, cause a recession, in the interim these actions will quell inflation, which is the market's present concern. Few market participants have seemed to notice that the Federal Reserve has been reducing money supply at a significant rate both through direct means and through more obfuscated means. This creates a near technical impossibility for risk assets to explode higher at the previous bull rally speed. However, there are definitely positive signs as well. After all, markets typically rise the fastest at the end of the economic cycle (after the yield curve inverts) and as the Fed signals a pivot to less tightening. Indeed, the monthly oscillators on the SPY are ready to move back up creating a directional bias for SPY to go higher in the coming months. In July, it has been steadily putting in higher highs. More often than not, when the K line crosses above the D line on the Stochastic RSI oscillator while it is in oversold territory, the following months experience a rally. However, there are quite a few false positives of this indicator, especially in the context of a recession. There are some important Fibonacci levels that are also acting as support. For more on SPY Fibonacci levels, you can view my prior post below: Finally, I would be remiss not to show one last important S&P 500 chart that some may find disturbing: The yearly Stochastic RSI of the S&P 500 (see below) This ominous chart shows that 2021 was sitting right at the top of an overextended yearly Stochastic RSI and 2022 began the process of oscillating down. In the 150 years of S&P 500 data that produced this chart, a rapid descent from this high level of over-extension has only occurred five times before. In the best scenario, the stock market only managed to go up 50% in the decade during which the oscillator corrected downward. In another case, the stock market was roughly flat for a decade (rising less than 10% for the entire decade). The other two cases were the 2000-2002 Dot Com bust and the Great Depression. Interestingly, just last month we bounced off the third Fibonacci spiral from the peak of the Great Depression. Perhaps this is a mere coincidence, or perhaps we'll have a mild recession like we did at the second Fibonacci spiral from the Great Depression (the recession of the early 1990s), or perhaps we are beginning a new supercycle characterized by low economic growth, recessions and stagflation. Only time will tell. I'm curious to hear thoughts and counter-arguments, so please feel free to comment below (but please be polite).
AMEX:SPY
by SpyMasterTrades
7
SPX Long, expecting closed all week highSPX closed at $3998.95 (Almost $4000) today. Expecting a higher close point between $4010-4038. Watch for turning point -- but mostly followed with a pull back to retest 30F(Green) pivot ZG (higher support line around $3970), and move uptrend. Red -- drop back into the consolidation area for more wave. -- News -- in next 10-days Xi & Biden will have a meeting (video meeting?) We'll see whether supply chain issue will smooth a little -- If works, SPX go towards $4300s.
SP:SPXLong
by BeshellO
1