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Fears from banking sector might be about to spread elsewhereFollowing the last FOMC meeting, notable developments in the stock market took place. First, volatility increased significantly among regional banks, seeing shares of companies like PacWest Bancorp, Western Alliance, Metropolitan Bank, and Home Street plunging by high double-digits. These declines, however, did not last long, and financial institutions recovered much of their post-FOMC losses in the past three trading sessions. Then yesterday, these companies soared during the pre-market and got sold off during the regular trading hours. Interestingly, these erratic moves follow Jerome Powell’s reassurance (from a week ago) that the banking system is “safe and sound” and making progress toward recovery. While this might be true for major banks that are well-positioned to weather the storm, regional banks are still at risk of spreading contagion that can lead to a domino effect (similar to the one we saw last year in the cryptocurrency market with the bust of Celsius Network, Voyager, FTX, etc.). As a result, this might lead to more broad fear in the markets, especially once more economic indicators will start to worsen. On the topic of these indicators, so far, an extremely low level of unemployment has been used as an excuse by many economists to say there is no recession ahead (despite history being full of examples when extremely low unemployment preceded the start of a recession). Therefore, we do not consider low unemployment a reliable indicator to assess that the U.S. economy will dodge a recession (also bear in mind that a person not actively seeking a job is not counted as unemployed). Overall, we would say that labor market data show a lot of discrepancies that could suggest otherwise (a growing number of continuous jobless claims, a declining number of multiple jobholders, etc.). In addition to that, rate hikes tend to affect the economy with a lag (often noted as a lag of between 6 to 18 months), meaning the economy still has not felt the effect of the number of previous rate hikes, at least since November 2022 (equal to at least 100 basis points). With the FED’s target of a 2% inflation rate still being very distant, we think interest rates will be required to be held higher for much longer than the market is pricing in at the moment. In fact, we believe there is still a very high chance there won’t be any rate cuts in 2023. Accordingly, we expect this realization among investors to lead to a big repricing event we mentioned before. As such, our price target for SPX stays at $3,500. Illustration 1.01 Illustration 1.01 shows the price action of particular banking stocks in yesterday’s pre-market. Illustration 1.02 Illustration 1.02 displays the unemployment rate in the United States. Yellow arrows indicate extremely low levels of unemployment that preceded lasting periods of elevated unemployment. Technical analysis gauge Daily time frame = Neutral/Slightly bearish Weekly time frame = Neutral *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Illustration 1.03 Illustration 1.03 shows continuous jobless claims. The metric is up approximately 40% since September 2022 and about 10% since the start of 2023. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
SP:SPXShort
by Tradersweekly
15
S&P500 Megaphone and MA50 (1d) call for a buy.The S&P500 failed to cross over the 4195 Resistance (1) and the rejection pulled the price back to the MA50 (1d). In the process, a Megaphone pattern has emerged and today's decline hit its bottom. This is a strong short term buy signal. Trading Plan: 1. Buy on the current market price. 2. Sell if it closes a 1d candle under the MA50 (1d). Targets: 1. 4195 (Resistance 1). 2. 3950 (bottom of the long term Channel Up). Tips: 1. The RSI (1d) is bearish, trading under the MA level. The Support Zone where the previous two Higher Lows of the Channel Up were priced is lower. Use it as an additional entry signal for a potential bottom Buy. Please like, follow and comment!! Notes: Past trading plan:
CAPITALCOM:US500Long
by TradingBrokersView
3
Will dreams about raging bull market get crushed today?The upcoming Federal Reserve meeting has been eagerly anticipated by investors as the central bank is widely expected to raise interest rates by 25 basis points. While this move is intended to combat high inflation, it will significantly impact the (already fragile) U.S. economy and have far-reaching implications for both businesses and consumers. One of the most significant impacts of the rate hike will be on debt servicing, which will become more expensive as interest rates rise. In addition to higher borrowing costs, the rate hike will contribute to slower economic growth, decreased consumer spending, and lower stock market returns. Moreover, this tightening of monetary conditions will come at a time when many U.S. regional banks are struggling to stay afloat, driven by a combination of factors, including loan defaults, capital outflows, and increased competition from larger banks. The potential contagion of the regional banking crisis has become a more pressing concern in light of recent failures within the financial system. In the past two months alone, we have seen the collapse of Silicon Valley Bank and Signature Bank, followed by a bust of First Republic Bank last week. Then, this week, we already saw massive declines among other regional banks, including PacWest Bancorp (-27% yesterday), Western Alliance (-15% yesterday), Metropolitan Bank (-20% yesterday), HomeStreet Bank (-14% yesterday), Zions Bancorporation (-10% yesterday). With these developments in the market, we would like to voice a word of caution to investors and once again reiterate our belief that we are merely going through a very deceptive bear market rally in market indices (rather than the raging bull market that so many people suggest). Accordingly, we remain bearish on the U.S. market and maintain a price target of $3500 for SPX. Illustration 1.01 Illustration 1.01 shows the setup for SPX with the bearish trigger below Support 1 and tight stop-loss above it. Technical analysis gauge Daily time frame = Neutral/Slightly bearish Weekly time frame = Neutral *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
SP:SPXShort
by Tradersweekly
23
S&P500: Head and Shoulders emerging. Sell signal.The S&P500 crossed under the 4H MA100 today and is forming a Head and Shoulders pattern on extremly bearish 4H technicals (RSI = 37.236, MACD = -4.910, ADX = 58.125). This is a sell signal especially if the price rebounds now and gets one last rejection on the 4H MA50. A similar pattern formed the February High. We are targeting S1 initially (TP1 = 4,050) and if the index closes under the 1D MA50 (red line), extend selling to S2 (TP2 = 3,925). Prior idea: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
CAPITALCOM:US500Short
by InvestingScope
5
"Bad news" are becoming bad newsBad financial data for the U.S. market continues to stack up. This week, we saw a slump in ISM non-manufacturing PMI to 51.2 (from the previous figure of 55.1) and ISM manufacturing PMI to 46.3 (from 47.7 in the preceding print). In addition to that, we also saw that factory orders declined by 0.7% (MoM) in February 2023, and JOLTs job openings fell below 10 million for the first time in nearly two years. Finally, as if it was not enough, ADP employment change came in at 145 000 (vs. 261 000 in the previous release), far below expectations. More data is scheduled for release today, including initial jobless claims, continuing jobless claims, and total vehicle sales. While we can speculate whether these numbers will be good or bad, we can hardly argue about the increasingly apparent trend of worsening economic data (among various metrics). With that said, we believe the market is reaching a point when data will start to matter again (especially after a decade of disregarding fundamentals as unimportant). As a result, “bad news” will become bad news, no longer sparking speculation about the U.S.'s ability to dodge a recession. Accordingly, we remain bearish on the index and maintain our price target of $3 400. Illustration 1.01 Illustration 1.01 displays the daily chart of SPX and two simple moving averages. It also shows sloping resistance and two sloping supports. A breakout above the sloping resistance will be bullish, while a breakout below support levels will bolster a bearish case. Technical analysis gauge Daily time frame = Slightly bullish (weak trend) Weekly time frame = Neutral *The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
SP:SPXShort
by Tradersweekly
13
Investors are breaking the cardinal rule of Wall StreetBefore the previous meltdown in stocks, in early February 2023, we warned that investors were trying to fight the FED, breaking the cardinal rule of Wall Street. With the recent rebound in SPX and people trying to call FED’s bluff (again), this trend seems to continue. Today, so much anticipated FOMC meeting is here, and central bankers are expected to increase interest rates by 25 basis points. While this will likely bring the hiking cycle toward the end, it is important to remember that inflation is still running hot, making a case for elevated interest rates to stay here for much longer than many suggest. As Jerome Powell noted multiple times in the past few months, the FED is hiking interest rates to cool off the economy. In some regards, the FED has succeeded, which is reflected in the banking crisis, rising unemployment, a slowdown in the housing market, growing delinquencies on loans, etc. However, the rising stock market is not particularly achieving the same results, posing a threat to the FED, which is already in a tough spot. Moreover, the persistence of high-interest rates will put more weight on the U.S. economy, dragging it deeper into recession. Therefore, in our opinion, it is just a matter of time before the stock market starts cracking under the weight of tight monetary conditions. Accordingly, we stay bearish on the U.S. stock market and expect SPX to drift to $3 400 over the course of the coming months. Illustration 1.01 Illustration 1.01 shows the daily chart of SPX. Currently, it is sitting just slightly below the sloping resistance. If SPX breaks above it, it will be bullish in the short term. Interestingly, the recent rebound coincides with the price retracing toward the 50-day SMA, which often represents a strong correction. Therefore, we will also pay close attention to the price action near these levels. Technical analysis Daily time frame = Neutral/Slightly bullish (very weak trend) Weekly time frame = Neutral Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
SP:SPX
by Tradersweekly
5
S&P500: Testing February's Resistace. Key to the trend.The S&P500 is testing February's LH trendline again for the first time since March 6th on strong bullish 4H tech (RSI = 64.370, MACD = 14.890, ADX = 34.844). This is also where the 0.5 Fibonacci level is and right over it the 4H MA200. We will target R1 if the LH breaks (TP1 = 4,080) and R2 (TP2 = 4,160) as long as the 0.618 holds upon re-test. ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
CAPITALCOM:US500Long
by InvestingScope
8
S&P500 Two targets on this newly started riseThe S&P500 made the first rebound on the bottom of the Channel Up. Breaking over the MA50 (4h) has confirmed the short term bullish sentiment. Trading Plan: 1. Buy this pull back as close to the bottom of the Channel as possible. Targets: 1. 4000 short term (under the MA200 (4h)). 2. 4220 long term (top of the Channel Up and +11.00% rise). Tips: 1. The MACD (4h) has formed the same pattern it did on the November 3rd and December 20th bottoms. Please like, follow and comment!! Notes: This is a continuation of this trading plan:
CAPITALCOM:US500Long
by TradingBrokersView
2
BITCOIN and S&P500 on similar fortunes. Target 64000 and 4900.his is not one of our usual analyses but we found a pattern that Bitcoin and S&P500 shared in the past and may replicate in the future now that the Bull Cycle has restarted. Based on this the first target for both of them when the get out of a Bear Cycle is Fibonacci 2.0 from the last High before the final selloff. For Bitcoin that target is 64000 and for the S&P500 4900. Long term outlook don't get confused with our usual shorter term signals. Please like, follow and comment!!
INDEX:BTCUSDLong
by TradingBrokersView
1
"Crash landing" instead of "soft landing"?Yesterday, U.S. inflation came up in line with expectations, and the market continued to enjoy relief after last week’s route. However, while the FED is progressing in fighting soaring prices, many problems are still on the horizon (declining corporate profits, rising unemployment, the persistence of tight monetary policy, problems in the banking sector, etc.). As such, market developments are starting to align for the “crash landing” instead of the “soft landing” that everyone was so eager to forecast just a month or two ago. With that said, we remain bearish on the U.S. stock market and expect it to decline by 20-30% in the coming months. Accordingly, we maintain our price target for SPX at $3 400. Illustration 1.01 The picture above shows the daily chart of SPX and simple support/resistance levels. Technical analysis Daily time frame = Bearish Weekly time frame = Slightly bearish Illustration 1.02 Illustration 1.02 displays the daily chart of SPX. The yellow arrow indicates a bearish crossover between 20-day SMA and 50-day SMA. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
SP:SPXShort
by Tradersweekly
14
S&P500 flashing a buy signal of 100% success rate since October.The S&P500 index may have been rejected yesterday following Powell's testimony on a possible need for stronger rate hikes but technically it has reached a level and formed a certain pattern that since the October Channel Up started, it has appeared 4 timed with a 100% success rate for rebounding to a Higher High. The Rising Support on the RSI is common on all those 4 times as well as the current formation. Short term Target is 4130 (Fibonacci 0.5) and long term Target is 4250 (Fibonacci 0.786). Follow us, like the idea and leave a comment below!!
CAPITALCOM:US500Long
by TheCryptagon
2
S&P500: This correction is just a Bull Market Higher Low.The S&P500 index is having investors puzzled once more with the February correction as it turned the 1W technicals neutral again (RSI = 48.600, MACD = 4.420, ADX = 34.962). The price is under the 1W MA50 but the 1D MA100 is supporting along with the 1D MA200. Having made the Bear Cycle bottom on the 1W MA200, it is obvious that in contrast to the Bear's Bearish Reversals (three patterns with red arrow), it made a Bullish reversal (green arrow) on the December 19th Low. That was the first Higher Low of the new Bull Cycle and it is beyond doubt that we have transitioned into it. The 1W RSI is on a Channel Up and as long as it doesn't make a Lower Low, we expect S&P500 to make its second Higher Low of the Bull Cycle now. The Fibonacci levels have formed all major Higher since 2022 with tha latter being the Bull Cycles first Higher High on the 0.5 Fibonacci (January 30th). Technically we expect Fibonacci 0.618 to get hit on the next Higher High. We are long, TP = 4,300. ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
TVC:SPXLong
by InvestingScope
8
S&P500: Selling started inside the Channel UpS&P500 turned neutral on its 1D time frame (RSI = 51.591, MACD = 36.770, ADX = 21.671) after a Double Top formation pushed it on the February 10th Low. The long term pattern remains a Channel Up and as the RSI is printing a variance identical to the first 2 weeks of December that formed the top, we expect a similar decline to start, aiming at the bottom of the pattern. We remain on sell positions since our last analysis and aim at the 1D MA50 (TP = 4,000). If the 1D MA200 is crossed, we will short again aiming at the bottom of the Channel Up (TP = 3,865). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
UShort
by InvestingScope
4
S&P500: Selling aimed at the 4H MA200The S&P500 index remains neutral on the 4H time-frame (RSI = 54.250, MACD = 4.390, ADX = 29.647) and without any technical buying pressure, especially following the higher than expected CPI report today, may be have made a Double Top similar to December 13th. If the 4,200 Resistance breaks, we will buy and TP = 4,300 (under 4,330 August 16th High). Until then, we will follow the technical pressure as suggested by the previous Double Top and sell aiming at the 4H MA200 (TP = 4,020). Consider a full daily close below the 4H MA200 a sell trigger aiming at the bottom of the long term Channel Up (TP = 3,850). Then we can buy relatively safely again for the long term (TP = 4,240). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
UShort
by InvestingScope
5
From "FED's pivot" hopes to a "strong labor market" excuseYesterday brought another interesting trading session, with the market being very complacent before Jerome Powell’s speech. However, as soon as he walked on the stage at the Economic Club of Washington, the market rallied. In the early minutes of the speech, SPX jumped up approximately 1.20%. Although, once the FED’s chairman mentioned ongoing rate hikes in the future, SPX slumped by almost 1.8%, bringing it into negative territory. Then again, a few minutes later, the market found its excuse in a strong labor market and rallied toward the end of the day. As a result, SPX closed 1.29% up for the day. This market behavior continues to highlight a tense yet very optimistic mood among market participants, who are back to buying dips. Nonetheless, nothing changes in the big picture. The rally continues against worsening economic data (corporations being hit by a significant decline in net income in 2022, a slowdown in economic activity, declining consumer savings, slow growth of wages, etc.) and assurances of the FED to tighten economic conditions even more in 2023. Overall, the market sentiment seems to have shifted from investors looking for FED’s pivot to them focusing on strong labor market data. Just like on previous occasions, we do not argue against the continuation of the rally in the short term. However, we continue to notice more and more problems in the economy and a growing disconnect between market expectations and reality. That casts a dubious shadow over the market’s performance in the coming months and moves us closer to a big repricing event. With that said, we stick to our price target on the downside for SPX in 2023 at $3 400. Illustration 1.01 Illustration 1.01 shows the 1-minute chart of SPX. Technical analysis Daily time frame = Bullish Weekly time frame = Bullish Illustration 1.02 Illustration 1.02 displays the daily chart of SPX. If the price breaks above Resistance 1, it will bolster a bullish case in the short term; contrarily, if the price breaks below Support 1, it will hint at exhaustion in the rally. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
SP:SPXShort
by Tradersweekly
27
Investors attempt to call FED's bluffThe Federal Reserve raised interest rates by 25 basis points yesterday. Jerome Powell reiterated his commitment to hiking rates throughout the year, and, more importantly, he dismissed any prospects of rate cuts in 2023. Despite that, investors seem to ignore the FED’s rhetoric and try to fight it. In our opinion, the disconnect between reality and the market is growing to tremendous proportions that we have not seen in years. That is particularly worrisome as we continue to see a lot of corporate underperformance and outlook downgrades during the current earnings season. As we noted in our previous article, the conditions are moving closer to a big repricing event. Investors are irrationally complacent at the moment, trying to call FED’s bluff. However, we expect the mood to change once it becomes clear that the U.S. central bank is not bluffing (or once we start seeing a deterioration in the labor market). Therefore, we treat the current rally with the utmost caution. Illustration 1.01 Illustration 1.02 displays the daily chart of SPX. It also shows two SMAs and simple support/resistance levels. For the rally’s continuation, we would like to see SPX hold above Support 1 and SMAs. If the price breaks below Support 1, it will bolster the bearish odds; the same applies if it falls below SMAs. Technical analysis Daily time frame = Bullish Weekly time frame = Slightly bullish Illustration 1.02 Illustration 1.02 displays the weekly chart of SPX. The yellow arrow indicates a price retracement toward the 50-week SMA (and breakout above it). We will pay close attention if the price manages to hold above this level; if yes, it will further bolster the bullish odds. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
SP:SPXShort
by Tradersweekly
47
Do you really want to fight the FED?The current week will bring a lot of exciting events for market participants. Several big corporations are set to disclose their earnings for the fourth quarter of 2022, and the release of important financial data (Dallas FED Manufacturing Index, Chicago PMI, ISM Manufacturing, employment cost, CB consumer confidence, ADP employment change, etc.) is likely to give more mixed signals about the economy. As if it was not enough, U.S. central bankers are expected to raise interest rates by 25 basis points on Wednesday. We believe the FED’s rate hike will further weigh on the economy, resulting in more mom-and-pop businesses going bankrupt due to soaring debt servicing costs (and persistent inflation). Inadvertently, this will put more pressure on the labor market, which we expect to start revealing more underlying economic problems in the coming months. This view coincides with the Economic projections of Federal Reserve Board members and Federal Reserve Bank presidents from December 2022. These projections show that the FED anticipates the median unemployment rate to reach 4.6% in 2023. As a matter of fact, since 1949, each 1% increase in unemployment has accompanied a recession (unemployment in December was 3.5%). Therefore, we would argue that the FED implicitly points to a recession in the second half of 2023. Furthermore, the market sentiment is becoming overly bullish and complacent while not pricing in a significant economic downturn. As a result, we think market conditions are moving closer to creating a perfect setup for a big repricing event. With that said, we remain bearish on SPX (beyond the short-term) and maintain our price target at $3 400. Some of the companies reporting their earnings this week: Apple Alphabet Amazon Exxon Mobil Corp. Pfizer McDonald's Caterpillar Phillips 66 Spotify Meta Platforms Canon J&J Snacks Foods NXP Semiconductors Ryanair Holdings SoFi Technologies Whirpool Corp. Illustration 1.01 Illustration 1.01 shows the daily chart of SPX. The yellow arrow indicates the bullish breakout above the sloping resistance. Now, we will pay close attention to the price action. If the price breaks above the horizontal resistance, it may further bolster the bullish odds in the short term. Contrarily, the failure of the price to break above this level may signal exhaustion. Technical analysis Daily time frame = Bullish Weekly time frame = Slightly bullish Illustration 1.02 Illustration 1.02 displays the weekly chart of SPX. Yellow arrows indicate the price’s retracements toward the 50-week SMA, which represent corrections of the primary trend. Recently, the price broke above the 50-week SMA (unlike on the previous occasions). However, this does not necessarily mean the primary bearish trend has reversed. To support a bullish case in the short-term, we would like to see the price hold above the 50-week SMA. The breakout below this moving average will be bearish and hint at exhaustion. Please feel free to express your ideas and thoughts in the comment section. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.
SP:SPXShort
by Tradersweekly
35