Daily SPY technical analysisSPY sell/ short zone 412.80 to 413.61. stop-loss 414.14. take profit zone 410.11 to 409.04
Spyshort
SPY obvious Double Top If you go back to the 30th of November to the week of witching in December 2022; specifically the 13th of DEC you can see how it came to a double top and then shot down from there.
Also the 50 EMA was above the 200 EMA as well. The same situation that we are currently in . Please pay attention because a move is getting ready to happen right before our eyes and most don't understand until Thursday and Friday come. Stock contracts can be very volatile from Monday to Thursday however, once the big wigs have made there money during the start of the week by the end of there week any smart person will pull there money out of those contracts and secure their gains.
I will come back to revisit this come Friday. SHORTTYYYY SHORT SHORT
SPY head and shoulders idea!I entered a short position on the spy this morning as we rallied into resistance. Along with my current short idea I see a more macro bearish pattern forming. A unique head and shoulders, this is a lower quality head and shoulders but it is in fact a H&S pattern and should not be over looked.
Safe trading!
S&P EMAs at Historical Critical PointCME_MINI:ES1!
So I opened the chart at the weekend and flicked through the time frames and upon punching the Weekly I noticed the 21EMA and the 89EMAs were pretty tight. I decided the rest of the morning looking through the historical relationship of these two EMAs. It turns out that each time the 21EMA has come down to the 89EMA, there has been a violent reaction. In general, when there are moderate to minimal macros effecting the markets, this reaction represents a strong opportunity to long. In fact, the 21EMA has never dipped below the 89EMA and recovered until months to years later. On the flip side, on the two occasions the 21EMA did dip below the 89EMA, was in 2001 and 2008...two very significant moments in market history.
I also noted that once the break happens the S&P tends to bottom at around 40%-50% of that breaking point. If we were to use today's valuation, a 45% drop from today is around 2200. That is also the bottom of the COVID crash i.e. where the real market was going to be trading before infinite stimulus was provided by the Fed.
I found this interesting as it seems in these troubling times and with a 'nuclear winter' around the corner in Europe, there is a real macro concern for markets. I'm leaning bearish and I think this rally will fail like every rally this year and lead the 21EMA below the 89EMA. Obviously, I react to the chart and should there be a strong reaction off the touch upwards, I will be flipping bullish.
S&P Short Term ATH?The sell off that started in December 2021 and January 2022 was thought of the "crash" that most logical analyst and economist are waiting for. It was illogical for markets not only recover the March 2020 sell off but set a new ATH during a year which saw the largest unemployment event also a pandemic and recession. The rally we know was Fed induced stimulus through QE corporate bond buying.
The day the Fed announced tapering, rate hikes, and shrinking balance sheet is when the markets started selling. It wasn't ANY other reason except this. A market fueled by Easy Money will not continue to rally if the very things that fueled it are taken away.
The rallies we have been witnessing are fueled by Corporate Buy Backs. In fact, according to Bank of America data, Retail Investors and Institutional Investors are still net sellers. This rally will be short lived. The economic data is still worse than expected and getting worse.
BUT .. it seems that we will see a new ATH for the S&P500 before the actual crash happens. The Nasdaq should not make a new ATH, but the Dow has a great possibility it will. We could see a Double-Top followed by the crash or a new ATH.
A conservative 35% fall would put the S&P in the low 3,000s.
SPY Ready For Sell Off?Since economic data means nothing anymore, and since the market is no longer has any connection to the economy, I guess we can rely on TA...?
Who knows. It seems like the S&P has hit a ceiling as of now at the 200MA. RSI is high on the 1D. MACD has PLENTY of room to come down. Let's see what happens.. it could be a red September.
Here's Why the Stock Market is at Risk of Further DeclineThe chart above shows the S&P 500 (SPX) relative to the price of the 10-year U.S. Treasury bond (1/US10Y). As you can see, when adjusted in this way, the S&P 500's decline in 2022 is no longer apparent. This could be a warning that further stock market decline is to come.
Let's walk through why this may be. First, it is important to understand that an interest rate is simply the cost of money. Central banks use interest rates to raise or lower the cost of money, which can impact the money supply by lowering or raising it.
For details on how the interest rate can impact the supply of money, you can check out my post here:
When we look at a chart of the yields on the 10-year U.S. Treasury bond, as shown below, what we're actually looking at is a chart of the cost of money.
When the Fed says it will continue to hike rates and hold them higher for longer, what the Fed is really saying is that it will continue to raise the cost of money and keep money costlier for longer. This is bad news for the stock market because it is unlikely to undergo a massive bull run while money remains scarce. In fact, Fed Chair Powell recently stated that a high stock market valuation is a cause of the labor shortage. High stock market returns incentivize people to retire early and live off of investment income. Combined with the already difficult demographic headwind of an aging population, the economy becomes faced with too many people consuming and too few people producing. This is a major cause of the labor shortage. Thus, if high stock market returns are a cause for the labor shortage, and the Fed's goal is to mitigate the labor shortage to mitigate inflation, then the stock market is likely to face prolonged headwinds.
A massive bull run in the yields on bonds has come along with a rapidly declining supply of money. Until this trend ends, there is simply not enough money to propel the stock market to new all-time highs. Remember that the stock market is largely a measure of corporate earnings, and corporations can only ever earn some subset of the total money supply. What might a record decline in the money supply say about the future of corporate earnings?
Government bonds, especially U.S. Treasury bonds, are considered risk-free assets since the central government, which issues these bonds, has the ability to print more money and thus can always afford to avoid default. In a normal market, whenever higher interest rates are demanded by market participants for an asset the market is saying that it perceives greater risks associated with that asset. The higher interest rates compensate investors for the greater risk. Since the rates on U.S. Treasurys have soared, the market is sending the message that it now perceives these assets as riskier. Although Treasurys can be perceived as risk-free from a default perspective, there is still a risk of loss, especially when higher inflation becomes entrenched for the long term. The increased risk can actually become a positive feedback loop because as the market demands higher rates due to inflation, then the government will have to pay more to service its debt. Such an expansion in the cost of debt service can cause the market to then believe the bond risk is higher, and the market may demand yet even higher interest rates. (Although the central government can always print more money to pay its increased debt, for political reasons it may choose default instead. Thus, there is a risk of default even for theoretically risk-free bonds). Furthermore, even if the central government chooses not to default, it will be forced to print more money to service higher debt which could worsen inflation and, in turn, keep rates higher for longer.
Therefore, it is important to understand that in the face of high inflation, risk-free Treasurys have become risky relative to their historical norm. In that regard, since all other assets except physical gold (e.g. stocks, corporate bonds, cryptocurrency) are inherently more risky than Treasurys, all other assets become less stable. This concept is illustrated in Exter's Pyramid, shown below.
When an asset class lower down in the inverted pyramid becomes unstable, everything above it will experience some greater degree of instability. The most speculative fringes of the market (the top of the inverted pyramid) are likely to experience outright liquidity crises. We are already beginning to see this in the cryptocurrency space which is not pictured on the pyramid, but which if it were, would be near the top.
So a massive bull run of the S&P 500 relative to the price of 10-year US Treasurys is not a good sign.
What this chart is showing is that the S&P 500 is becoming more and more overvalued relative to risk-free Treasurys, even as the S&P 500 nonetheless sells off! The amount of capital that is currently invested in the S&P 500 is too high for the yields on 10-year Treasurys to be as high as they are. This suggests that capital will tend to flow out of the stock market and into less risky and higher-yielding Treasury bonds.
The Federal Reserve is trapped by commodity inflation because it cannot cut interest rates, or make money cheaper, without worsening commodity inflation. If scarcities of commodities continue to weigh on commodity prices, keeping them elevated even as demand cools, then the coming stagflation is likely to be severe.
Since the yields on the risk-free Treasurys have skyrocketed, this means that even after all the declines we've seen so far, most assets are still overvalued. Look how high the value of Nasdaq 100 stocks has risen relative to the risk-free 10-year Treasury.
The last time this happened was right before the Dotcom Bust in 2000.
Although this relative chart does not predict whether the price of Nasdaq 100 stocks will go down, or the yields of 10-year Treasurys will go down, it does suggest that if the yields of 10-year Treasurys remain elevated, as the Fed suggests will happen, then the price of Nasdaq 100 stocks is likely to fall even further.
In the chart below, we can see that the fastest and most extreme yield curve inversion in history is occurring right now. This could suggest that the onset of the impending recession could be as equally fast and as extreme. The abruptness of FTX's collapse due to liquidity issues could be a harbinger of what's to come.
The Federal Reserve is already adding liquidity back into the banking system.
Job openings likely reached their cycle high and will continue to decline into the foreseeable future as the supply of money remains some degree tighter into perpetuity.
In the U.S., population and GDP grew at an exponential rate over much of the past century. This, in large part, allowed for the money supply to also grow at an exponential rate without high inflation. Since the stock market tracks the money supply, the stock market also largely grew exponentially as well. However, as population and GDP growth slow, this creates the risk that an exponentially growing money supply may result in persistently high inflation.
In the coming recession, which will likely be characterized by severe stagflation, central banks will likely have to convince the market that high inflation is good.
SPY is Doing ABC Medium Term CorrectionTechnical Analysis:
- As you can see in the chart, SPY is doing a short term wave 3 in red
- We expect that it will extend lower to finish correction around $300 ~$310 in the orange circle to complete the ABC correction of the wave II in red
- H1 & H4 Right Side is Turning Down
Technical Information:
- SPY is a ETF and it has a very strong correlation with SPX Indices
VIX: VOLATILITY CYCLES / COMPRESSION / DIVERGENCE / PUTOVERCALLDESCRIPTION: In the chart above I have included an update on a MACRO analysis of VIX VOLATILITY CYCLES. The creation of a set of new cycles is marked when VIX finds a new floor of support.
POINTS:
1. Deviations have been adequately adjusted for VIX with a 7 Point difference between CHANNELS.
2. Price Action is currently resting at NEW FLOOR of 19 & Price Action is consolidating.
3. 5 YEAR TREND LINE IS APPROACHING MONTHLY PRICE ACTION FLOOR.
3. NO RECESSION AFTER 1998 HAS EVER COME TO AN END WITHOUT VIX FIRST SPIKING TO 40 OR 45 AT LEAST.
RSI: There is in fact a lot to be said for RSI as it rests roughly below the 50 Point average which would signal that RSI is set to flip into Oversold territory. RSI must reach the 30 Point average in the coming weeks or anything above the 30 Point average & rising could signal a divergence occurring between ascending RSI LEVELS & CONSOLIDATING PRICE ACTION WHICH CAN MAKE FOR SOME VIOLENT VOLATILITY IN THE NEAR FUTURE.
MACD: As of now MACD is resting at an average oversold level of -2.0 but is signaling a move to the upside in coming weeks.
MAIN POINTS OF CONTROL:
1. RSI DIVERENCE OCCURS AS RSI RISES & PRICE ACTION CONSOLIDATES.
2. MACD FLIPS INTO POSITIVE TERRITORY.
3. A BREAK OF 21 POINTS FOR PRICE ACTION CAN BE INDICATIVE OF FURTHER UPSIDE FOR VIX IN THIS SCENARIO.
FULL CHART LINK: www.tradingview.com
TVC:VIX
CBOE:VIX
Possible Head and Shoulder forming on SPYWhile this isn't a textbook example of a H&S in terms of symmetry, failure to close above previous high would create a convincing example of a H&S.
With the most recent jobs report, the 25bps hike in May has become a stronger possibility. With CPI being released next Wednesday, this upcoming week could give a more positive indication on direction over the medium term.
Currently markets need to prove whether they are in a bear market rally or truly entering another bull phase. But the likelihood of the latter remains a lower probability in consideration of current economic conditions. While unemployment gives the indication of a strong economy, this is historically the last indicator to shift direction before recessions begin. Markets historically find their bottoms after rate hike cycles reverse, which usually aligns with the further deterioration of economic conditions.
Historically April is a good month for equities, which may continue to play out. Upcoming earnings will play a large role in the medium term outlook for equities. CPI is projected to drop to 5.2%, which even if this meets expectations is still a ways away from the feds 2% goal. This could indicate that the two scenarios ahead are that either credit tightens enough to work to bring inflation down further, which will cause more stress on the economy, corporate profits and consumers. Or this event doesn't have a substantial impact in which rates will need to stay elevated for a longer duration than the market is currently forecasting.
Either scenario carries a higher degree of risk to the down side for markets as the former makes a recession a higher probability and the latter would require markets to re-adjust forecasts.
The alternative is that inflation drops significantly below forecast, beating expectations and the fed may have a higher likelihood of pausing the hiking schedule in their May meeting. If this were to happen on the upcoming report, the challenge would then be to review future reports to see if this trend continues or if higher oil prices cause inflation to stick at a certain level. Which could then still require the same outcome of higher rates for longer.
The scenario where inflation keeps falling towards the feds target before the end of the year, credit does not continue to tighten and unemployment remains low as a result is the least likely scenario in my opinion. This is the most appropriate set of conditions that would be required for markets to continue higher.
The risk to the downside over the medium to long-term is greater in my opinion because of the implications of rising unemployment. If credit conditions tighten, money becomes harder to access and as a result unemployment rises, even if rates are cut as a result of these conditions, in this scenario inflation may still be elevated, and retail investors would need access to capital to cover job losses. This could weigh heavily on risk assets, equities and housing.
Its not out of the question that markets can continue to rise, it just appears to be the least likely scenario. For this reason I am positioned more defensively and will continue to sell into rallies. If these levels break and assets rally higher, there is enough volatility in the market to find a good entry should conditions offer more clarity or give better reasons to enter a long term position in equities.
Head and Shoulders forming on the dailyUsing Patterns and other TA I believe the market will follow one of my two paths to retest the high on the right shoulder before continuing down to complete the pattern.
I also used other TA to confirm what I'm seeing on this chart. I try to make my charting simple that others can looks and be like oh yeah that makes sense.
Am I always right? Heck no... Not to toot my horn but I did just recently call the bitcoin blastoff just before it happened so I think my charting is OK. Look under my other ideas... you will find it... Even some comments like are you crazy...why would it blast off here...and like a day or two later it did.
Will it continue to go up and test the high now or drop before trying again later? I guess next week we will find out.
Have a good extended weekend!
Note: I only use public indicators and TA tools to make my charts. Nothing is private or custom.
Bearish Sells OFFS at 411It's been a great show spy . Every time it hit 411 it just suddenly sells! But why? Because you have to study and realize that there are points of support and points of RESISTANCE. If price hits resistance more than once and fails to blow throw you should know what happens next. If you CANT tell me the future all you have to do with most charts is replay the past and trading view actually has a replay chart option in which you can do just that. Please pay attention and just look at the EMAS they are telling a story very Time they cross downward. google angel and death cross. @ContraryTrader is one of the best on here I advise any on looking at this to follow him and learn.
Head and shoulders forming?Using TA, Indicator's, and Elliot Eave theory I show we are nearing a reversal point and soon will drop down (mini crash) to one of the indicated fib ratios. Then the fun begins… that is if your positioned accordingly. Why? Because that completes a giant head and shoulders on the Daily. … which means… more down shortly but one step at a time.
Note: I only use public indicators. Nothing I use in any of my charts is private or modified.
Market will go down and repeat recent historyUsing trendlines and patterns I show how history repeats/rhymes. Using that and TA to verify I know the next big move soon will be down.
DJI Dow headed for a correction.. More pain ahead...If we look at the DJI we can see that on the chart the current price is jumping WAY outside the upper Bollinger Band and the 50 MA is actually above the midline of the Bollinger Band. That can signal a couple things.
1st the pricing being so far beyond the upper band means is due for a sharp downward correction towards the Midline at best and to the bottom band at worst.
2nd, with the 50 MA being above the midline of the Bollinger Band can signal that the local trend support is actually now future resistance. The trend of the bands has the midline the more likely of the 2 targets and that would put the dow in a local down trend in the short term.
Based on what the chart is showing me right now, I would say 31.5k Dow is way more likely to be hit before 34k dow. Depending on how long the correction last, it could be a catalyst for a bigger down trend with a much larger correction still to come later this year. Fed rate decisions, earnings data, lay offs, and a few more international trade issues like Yuan settlements, will play a large factor in the future larger correction timing.
$SPY - April's Heating Up 👀🌡️ $SPY needs consolidation for potential H&S. Decisive break above gold TL may trend higher, or we'll see re-entry into zone. Will be adding a short lot near $410.48 level. Being mindful of this seasonal month so consolidation for SPY is crucial. Keep in mind, bank stocks kick off a new season of earnings in a few weeks.
SPY S&P 500 etf Head and Shoulders Chart Pattern. Options to BuyIt looks like a Head and Shoulders Chart Pattern is forming in the chart of SPY S&P 500 etf.
Because I believe we are about to see SPY trading at the neckline of the H&S, I`m considering the following puts:
2023-5-19 expiration date;
$389 strike price;
$4.10 premium to pay.
Looking forward to read your opinion about it!
SPY S&P 500 ETF Put OptionsI think SPY is nicely following the path to reach $348 by mid-2023 to form a Double Bottom pattern:
My choice for puts is as follows:
2023-4-21 expiration date
$375 strike price
$2.79 premium.
I plan to exit fast, won`t hold until expiration.
Looking forward to read your opinion about it.
Bullish til $407.50 then looking to short the HnS patternThe AD is causing an ascending triangle on the 2hr chart
I'm forecasting here, so give me a little rope. The AD is ascending (ascending triangle technically) to $407-$408 area. It's likely to retest the 3rd leg of the Eliott wave which was sold off. This rejection, can cause a bearish Head and shoulders pattern.
look at wave 1 as the left shoulder, wave 3 as the head, and this final push in attempt to invalidate wave 3 which will likely cause a bearish head and shoulders pattern.
Tomorrows FOMC meeting/discussion is going to be more volatile than normal. Imho, both bulls/bears should be able to eat. I wont take a short position til after $407.50 is touched.. Look at the market heavyweights TSLA, AAPL, SPY (obviously), for clues but will also be looking at $uvxy, $faz, $tlt for additional clues.
so seeing this now, I likely wont beat up futures... I'll just be monitoring and posting some updates to the chart. Im both a bull/bear when I need to be..
Daily SPY technical analysisSpy today if open or push 396.42 then we can find buy / long and take profit at 401.38 but if the market opens below 396.42 then we can sell at market and take profit must be 391.44. all two scenario stop losses have to be $1 for each change of entry-level. If the market break 391.44 then the next level of support is 387.27.
Possibilities of Spy to 360 1DObserving the daily chart, it appears that a head and shoulders formation has emerged, which may indicate significant changes on the horizon that have yet to be disclosed. This channel has persisted since October of last year, suggesting that a potential shift in market dynamics may be underway. Additionally, if this head and shoulders pattern holds true, it could trigger a significant bearish trend with potential retests of support levels around 360 and possibly even down to 320. Powell's recent tendency to keep his announcements brief and to the point also warrants attention, as it may reflect a cautious approach to managing the economy. As always, it's important to stay vigilant and stay informed as events unfold.
SPY close analysis, 3/23/2023SPY opened today within my "interesting zone" — an area with substantial gaps up down/left/right and a place where I had no idea what to expect. For a moment, it looked like we might actually break out! But a swift and final rejection of this zone on the last 65m seals the deal for me to sum up a bearish thesis. All signs point to more down as we seek liquidity and support below. The natural stopping point is the confluence of old demand zones, a diagonal demand zone connecting the major bottoms since the low was set, and the long term peak resistance line dating back to the ATH. This makes too much sense not to call it.
In summary: Short SPY, target 387.6, invalidation above 400.
SPY to 383?The SPY looks like its in a rising wedge on declining volume getting ready to break down to 383. If this setup fails and breaks up, we can see 415 to 422 again. But I am bearish until invalidation. If this can hang sideways in the pattern a bit longer before breaking down,BTC can keep breathing and see the 29k area before selling off from the strong resistance near 30k
