Elliot Wave Analysis - S&P 500I have tried to do a wave analysis on S&P 500 and to me it looks like the Impulse wave is almost on the verge of completion.
On RSI there is a Bearish Divergence which might play soon.
SP500FT trade ideas
SPX DrawdownS&P500 shows signs of fragility as equity breadth is not healthy and many hedge funds are starting to pile up shorts. Policy uncertainty ( Trump tariffs ) and unstable geopolitical developments will push stocks lower until the beginning of March. Although this will be a 15%-20% drawdown, I believe that the S&P500 will reach new highs in Q2, as the monetary policy will become more accommodative ( more rate cuts from the Fed priced in later this year), and more stocks from other sectors ex-tech will take the lead in a more reflationary, pro-growth macro environment.
The Silent Killer That's Destroying Your Trading AccountLast week, someone dropped me a DM to talk about his "profitable" strategy. He was excited about making $4,894 in a single trade. I asked him about his account size, he proudly told me he turned $1,000 into $4,894 by risking his entire account on one trade.
His account got wiped the next week.
This story isn't unique. I was like him. I lost over $10,000 in my early trading days, not because my analysis was wrong, but because I had no idea how to manage risk.
The Illusion of Control
The majority of traders are unaware of this fact. Your analysis may be flawless. You can submit perfect entries. If you don't understand risk management, you might still lose everything.
Think about it. How many times have you entered a trade without knowing your maximum loss? Do you increase your position size after a winning streak? Do you averaged down on losing positions? Do you remove your stop loss because you were confident about the trade?
I remember my first funded account. I had a $200,000 account with The Funded Trader. My analysis was solid. I had back-tested my strategy extensively. But within two weeks, I had blown the account. Not because my trades were wrong, but because I had no system for managing risk.
Why Most Traders Never See The Danger Coming
The problem with poor risk management is that it works for a while, until it doesn't. It's similar to not wearing a seatbelt when driving. You feel fine and safe until you crash.
Let me show you.
Let’s say you start with a $1,000 account. You risk 20% per trade because you want to grow your account faster. The first few trades work out well. Your account grows to $1,500, a nice 50% gain in your account. You think you’re unbeatable. Your strategy is the holy grail.
The next day, you lost three trades in a row. Something that happens a lot in trading. Your account is now down 50%. You need to make 100% just to break even. You take greater risks and incur even greater losses as a result of the pressure to profit from the market.
This is what happened to me before. I turned $5,000 into $15,000 in two months by taking excessive risks. I felt like I had a hand of midas. Then I lost it all in two days.
The Mathematics of Account Destruction
Most traders don't understand that the size of your losses matters more than the size of your wins. Let's look at the brutal math:
Lose 10% of your account? You need 11% to recover
Lose 25%? You need 33% to recover
Lose 50%? You need 100% to recover
Lose 75%? You need 300% to recover
This is why professional traders are obsessed with protecting their capital. They understand that preservation of capital is more important than making profits.
I learned this lesson the hard way. In my early days, I would risk 10% of my account per trade. One bad day with three losing trades would put me down 30%. I needed a 43% gain just to get back to break even. It was mathematically impossible to succeed this way.
The Hidden Danger of Overconfidence
Do you believe that a trader being on a losing streak is the worst thing that could happen to them? No. It's when they are on a winning streak.
We tend to become overconfident once we find small success. We start to believe that we're the big fish in the market.
This is what happened to one of my mentees. He developed a profitable strategy. His strategy gave him a 60% win rate. He started with proper risk management, risking 1% per trade and was pretty profitable, netting him 8RRs in two weeks.
After two weeks of consistent profits, he decided to increase his risk to 5% per trade since he was technically "profitable". Guess what happened next? He hit a normal losing streak. He lost four trades in a row. This normal losing streak turned from a 4% into a 20% drawdown. This causes him to abandon his strategy completely, thinking that his strategy is not profitable at all.
The Professional Approach to Risk
Here's what I learned about professional traders after blowing multiple accounts and finally becoming consistent.
First, processional traders understand that trading is a game of probabilities. No trade is certain. Anything can happen in the market. Even an A+ setup with a 80% win rate will fail sometimes. This is why they never risk too much on any single trade.
Second, they focus on risk more than reward. Before placing any trade, they know exactly how much they could lose. They keep their risk below 1% of their account size. The potential profit is what comes naturally to them. Managing risk is what keeps them in the game long term.
Have you ever heard of any successful trader saying that they made it because they went all in on a certain trade? Almost all of them made it because of their risk management skills.
Third, they understand that position sizing is everything. A great trade with poor position sizing is a bad trade. A normal trade with proper position sizing is a good trade, of course you have to trade according to your system.
Building a Risk Management Framework
After managing multiple six-figure funded accounts, here's what I've learned about proper risk management.
Start with your maximum acceptable loss per trade. Most professional traders risk less than 1% of their account per trade. This means on a $100,000 account, your max loss should be less than $1,000 per trade.
Next, calculate your position size. There are many calculators out there to calculate how many lots to trade.
Lastly, consider your total exposure. If you have multiple trades open, you might be overtrading. If there is sudden news, all your trades could be stopped out at once.
The Reality of Numbers
Let me share something personal. When I first started trading a $10,000 account, I thought bigger risks meant bigger rewards. I still remember that feeling of excitement when I risked 10% on a trade and won. Making $1,000 in a single trade felt amazing.
But then came a normal week of trading. Three losing trades - something that happens to even the best traders. That week changed everything.
Trade 1: -$1,000 (Now at $9,000)
Trade 2: -$900 (Down to $8,100)
Trade 3: -$810 (Account crashed to $7,290)
Just like that, I needed to make a 37% return just to get back to where I started. It felt impossible. The pressure led me to take even bigger risks, trying to recover my losses. You can guess how that ended.
Now, let me show you how I trade the same $10,000 account today:
Trade 1: -$100 (Now at $9,900)
Trade 2: -$99 (Down to $9,801)
Trade 3: -$98 (Account at $9,703)
Same number of losing trades, completely different outcome. I only need a 3% gain to recover. More importantly, I'm still in the game, mentally strong, and able to trade my strategy without pressure.
This isn't just about the numbers. It's about staying emotionally stable enough to execute your strategy properly. When you're down 30% of your account, you don't make rational decisions. But when you're down 3%, you can stick to your trading plan without panic.
This simple shift in risk management is what allowed me to finally become consistent and eventually manage six-figure funded accounts. It's not exciting, it's not going to make you rich overnight, but it keeps you in the game long enough to actually become profitable.
The Real Secret to Trading Success
I'll let you know a secret about trading. It's not ALL about making money. I know you're learning to trade for the money. But money is just a byproduct of you following your system. Real trading is about surviving long enough to let your edge play out. In order to do so, you need to master risk management.
I've always treated trading like a business. I will never risk 68% of my company on a single decision. Likewise, I will never risk 68% of my account on a single trade. You have to make calculated risks and manage the downside. Focus on these and profits will follow.
Trading should be no different. Every trade should be properly sized so that a loss will not wipe your account. This allows you to stay in the game long enough for your edge to play out.
Taking Action: Your First Steps
If you're reading this and realizing you've been trading without proper risk management, don't panic. Here's what you need to do:
First, reduce your position size immediately. Start risking 0.5% per trade maximum. Yes, this means smaller profits, but it also means you'll survive long enough to actually become profitable.
Second, calculate your position sizes before the market opens. Don't leave this to emotion or gut feeling. Know exactly how much you'll trade based on your account size and stop loss distance.
Third, track your maximum drawdown. This will show you whether your risk management is actually working or if you need to make adjustments.
Remember: The market will always be there tomorrow, but only if you have capital left to trade with.
S&P 500: Bearish Momentum BuildsAs we move further into 2025, the S&P 500 continues to show signs of weakness, intensifying the bearish outlook from my last post. The Rising Channel breakdown and Head and Shoulders (H&S) pattern remain dominant, with the price now trading firmly below the 50 EMA.
Attempts to reclaim the Rising Channel have failed, confirming that the long-term bullish structure is no longer in play. The neckline of the H&S pattern, previously broken, has become a strong resistance zone, reinforcing the bearish momentum. The 50 EMA has flipped to resistance, making it even harder for bulls to regain control.
Currently, the 200 EMA is providing critical support. If this level fails, the downside momentum could accelerate significantly, leading to much lower targets. Key levels to watch include 5,687.33, 5,600.45, and the channel projection target of 5,119.26.
Bulls will need to defend the 200 EMA and push the price back above the 50 EMA to have a chance at reversing this trend. Otherwise, the market seems poised for further downside. Let me know how you’re approaching this setup shorting, waiting for a bounce, or something else? Stay sharp and trade carefully! 🚀
Livermore's Lessons Patience, Psychological Discipline & Timing Livermore's Lessons: Patience, Psychological Discipline, and Market Timing 🕰️💡📈🎢
Introduction:
Explore the trading wisdom of Jesse Livermore from "Reminiscences of a Stock Operator," where we delve into lessons from pages 18-20, 56-57, and 122-125. See how these insights translate into modern trading with our innovative tool, DCA Alpha 1.0 🌟.
Lesson 1: Psychological Discipline (Pages 18-20)
Quote: "I called that jackass there -- he pointed to the guilty clerk -- and asked what you'd done; and when he told me I said to him: 'I don't like that guy's looks. He's a ringer!'"
Educational Insight:
Emotional Control: Livermore's story highlights why keeping a cool head (🧘♂️) is vital. Fear (😨) and greed (🤑) can lead to costly mistakes.
DCA Alpha 1.0 Application:
Discipline in DCA:
Buy dips with confidence (🛒📉), avoiding the panic that can come with market lows.
Avoid FOMO (🔺❌) as our tool provides signals to prevent chasing those overrated highs.
Lesson 2: Patience in Trading (Pages 56-57)
Quote: "I decided that I began too soon, but that I really couldn't help it. The market began to sell off. That was my opportunity."
Educational Insight:
Patience for Opportunities: Livermore learned that sometimes the best action is inaction (⏳), waiting for the market to come to you.
DCA Alpha 1.0 Application:
Mastering Timing:
Simplify support and resistance (⚖️✨) with easy-to-read visuals, teaching you when to wait (🚫).
Identify dip buying opportunities (🛒🔍) through our alerts, promoting calm and patience (🧘♀️) until the market turns.
Lesson 3: Market Timing and Trend Following (Pages 122-125)
Quote: "I was bearish because that was the way I sized up the situation, and I sold stocks short only after I turned bearish."
Educational Insight:
Following Trends, Not Fighting Them: Livermore's strategy was to ride the wave (🌊), not swim against it.
DCA Alpha 1.0 Application:
Trend Alignment:
Data-driven entries & exits (🚀📊) to ensure you're moving with the market tide, be it up (📈) or down (📉).
Clear oversold/overbought levels (📊🔔) help you follow the market's path or prepare for a shift, true to Livermore's timing approach.
Conclusion:
Livermore's teachings on patience, discipline, and following market trends are seamlessly integrated into DCA Alpha 1.0. This tool brings historical wisdom to your screen, enhancing your trading strategy in today's dynamic markets 🌍💹.
Share your stories of patience and discipline in trading within our community (🗣️💬).
US500 SHORT TERM LONG US500 Analysis: Waiting for Confirmation at Key Support
The US500 is currently oversold and finding support at the 100 SMA, with price holding within a key bullish order block that previously set up the all-time high (ATH). This order block represents a level of significant institutional interest, as it required substantial volume to create the ATH. It has held as support twice before, reinforcing its importance.
Current Outlook
• Support Zone: Price is testing a strong bullish order block, a zone historically associated with high volume and institutional activity.
• Oversold Conditions: Indicators suggest oversold conditions, aligning with a potential setup for a retracement move.
• Waiting for a Bullish Change of Character: A bullish change of character (CoCh) will confirm that the current downward move has concluded and a retracement toward higher levels is beginning.
Plan of Action
We aim to take a long position upon confirmation of the CoCh, targeting the Fibonacci extension levels of 0.618 to 0.786. These levels are key for retracements and align with the potential formation of a lower high (LH), which would coincide with the descending triangle structure on the chart.
Patience is essential. The market will dictate our entry, and we will react accordingly based on the price action.
Disclaimer
This analysis is for educational purposes only and does not constitute financial advice. Trading involves significant risk, and you should only trade with capital you can afford to lose. Always conduct your own research and consult a licensed financial advisor before making decisions.
Follow us for more professional insights, high-probability setups, and disciplined strategies to stay ahead of the markets! Don’t miss your edge—let’s navigate the market together.
Market SnapshotTake note of the below article and the thoughts around Fed Cuts:
cnbc.com/2025/01/09/stock-market-today-live-updates.html
Remember I told you below that the Treasuries market was signaling something? Uh Oh
Oh and that rise in oil you see happening is going to be the straw that breaks the markets back
:(
More down for SPX500USDHi traders,
Last week SPX500USD did exactly what I've said in my outlook. After price came into the Daily BPR it rejected from there and made another drop. So did you took advantage of my knowledge? You could have made a lot of money.
Now it looks like the B-wave was a Triangle and price is now in the C-wave.
So if that's true, then next week we could see more downside for this pair.
Let's see what the market does and react.
Trade idea: Wait for a small correction up to finish and a change in orderflow to bearish, then you could trade shorts again.
If you want to see more from my analysis, please make sure to follow me, give a boost and respectful comment.
This shared post is only my point of view on what could be the next move in this pair based on my analysis. I do not provide trade signals.
Don't be emotional, just trade!
Eduwave
S&P 500 Daily Chart Analysis For Week of Jan 10, 2025Technical Analysis and Outlook:
During the recent trading session, the S&P 500 demonstrated a robust rally, exceeding a notable support level at 5872. This upward movement, however, resulted in a significant decline of the index to a critical support level at 5870 and lower lows. The volatility associated with this upward trend has introduced instability by destabilizing the bullish trend by flagging a new downward target marked at Outer Index Dip 5645. However, it is crucial to acknowledge that encountering subsequent support levels of Mean Sup 5770 may trigger a substantial rally, potentially leading to the Mean Res at 5920, before plunging again to drop toward the targeted level of 5645.
Yearly view of SPXAnalysis based on yearly pivots, says to us that the drawdown on SPX is impulsive and it may continue till monthly S4 or it even might bounce from here, before the new president takes office and rally, since this is a prosper year, it will probably be double digits.
The main event to watch out here is the inauguration rally, which will be "explosive", if the new president will want to sink it first, then "save" it later, it will probably dip even further, however the market will love the energy of the recovery.
Things to watch out for: God forbid something happens to the new president and the inauguration gets delayed!
One more thing, there's a prophecy been made by someone who has been right several times in a row, as follows: "Soon after Trump takes power, a great economic crash will follow". - which goes in line with the Trump rhetoric that Biden is leaving him a mountain full of debt.
SPX edges towards the final buy zoneSPX has an anticipated market top of 6650 (view our long term analysis below)
We can see that the ascending channel which the SPX is trading in has been respected since October 2022 (below idea)
Now that the equilibrium level has been broken, we would expect to see a test of the lower channel support trend line, which lines up nicely with previous structure, as well as a 38 Fib retracement on the most recent move. Multiple confluences strengthen the validity of a particular level and add weight to our decision.
Therefore, we will wait for the SPX to come down and test this level at around 5756 which could take another month. Sitting on our hands, being patient, waiting only for the most likely trades is the logical way to play.
Long term SPX:
where to get long on spxin my previous analysis , i told u all to short, nq, spx and nvda . i hope u enjoyed . Right now there is a gap in spx which i think will get filled on monday and we may get another down move. As trading guru say never fade fridays. I think spx will fill the gap reach to 5800 and bounce from there.
spx- downside comingSPX has formed a perfect head and shoulder pattern ready to be broken. I think there is a gap to be filled where small arrow is pointing. I think it will fill that gap this month. Of note there is also another gap at 5973, it is possible that it will fill it first then tanks
Next week will be challenging for S&P 500 bullsNext week looks challenging for S&P 500 bulls. The price is stuck in a descending triangle pattern, and if it breaks below this week's low of 5,807, the market could trigger the pattern, suggesting a potential 3.8% drop to 5,596. However, staying above this week's low could allow for sideways movement or even a push higher. In the short term, the outlook remains bearish as long as the price stays below 5,933.
This content is not directed to residents of the EU or UK. Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
S&P 500 Sees Possible Bearish Signs Like the ‘Mini Death Cross’We recently had the lack of a so-called “Santa Claus Rally,” an omission that’s historically a negative sign for stocks. And now, the S&P 500 SP:SPX -- the broadest large-cap U.S. equity index -- has developed a pattern of bearish reversal as well.
Check out the SPX’s chart going back six months through Wednesday (Jan. 8):
Readers will see that the S&P 500 developed a head-and-shoulders pattern of bearish reversal in late October and stretching into 2025, as denoted by the three purple triangles to the right of the above chart.
This pattern displays a neckline/pivot point of 5,827 -- slightly above the 5,810.68 that the S&P 500 was trading at midday Friday, but even with a 23.6% Fibonacci retracement of the index’s August low to its December high.
This 23.6% Fibonacci level (denoted by one of the thick blue horizontal lines at the chart’s left) makes the SPX’s 5,827 level all that much more important as a potential pivot.
Pivot points typically represent where support or resistance show up for a stock or index, depending on the price action’s direction. A pivot point can also act like an accelerant or slingshot if the stock or index breaks the pivot level.
Elsewhere in the above chart, readers will see that the S&P 500’s Relative Strength Index (the gray bar at the chart’s top) was neutral as of Wednesday's close.
However, the index’s daily Moving average Convergence Divergence indicator -- or “MACD,” denoted by the black and gold lines and blue bars at bottom -- had repositioned itself to appear more bearish.
The histogram of the index’s 9-day exponential moving average -- or “EMA,” marked with blue bars at the chart’s bottom -- was running below zero. That’s often reflective of a recent loss of upward momentum.
Meanwhile, the 12-day EMA (the black line at the chart’s bottom) moved below the 26-day EMA (the gold line). That’s a historically bearish move.
Additionally, the S&P 500 is undergoing what’s called a “swing traders' cross” or “mini death cross.” That’s a bearish “cross-under,” where a stock or index’s 21-day EMA (the green line in the chart above) moves below its 50-day Simple Moving Average (or “SMA,” marked with a blue line above).
Where Does the S&P 500’s Chart Show Support?
With Friday’s break below the above chart pattern's neckline, the S&P 500’s next key support level could be 5,605 -- the “half-way back point” or a 50% retracement of the index’s August-to-December run. (While common, 50% retracements are not true Fibonacci levels.)
(At the time of writing this column, Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no positions in S&P 500 ETFs or index funds.)
Indexes are unmanaged and cannot be directly invested into. Past performance is no indication of future results. Investing involves risk and the potential to lose principal.
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
SPX Continues to Fall Following the NFP ReleaseAfter the surprising report of 256k jobs created compared to the expected 160k, the U.S. index has experienced a decline of over 1% in the last trading hours. This is due to the perception that strong employment data could be counterproductive to the outlook for future interest rate cuts by the Fed.
Lateral Range:
Recently, the price has been trading within a significant lateral range between the 6k-point ceiling and the 5.8k-point floor. With the recent bearish movement, a break below the lower boundary of the channel could end the current consolidation and favor a new short-term bearish outlook. Sustained oscillations below the mentioned support level could define the next downward price movement.
RSI:
At the moment, the RSI is oscillating below the indicator's neutral 50 line. This indicates that bearish momentum dominates the market, with no signs of oversold conditions that might suggest potential bullish corrections.
Key Levels:
5.8k: This level currently serves as the relevant support zone, coinciding with the lower boundary of the lateral channel and the 23.6% Fibonacci retracement level. Persistent oscillations below this level could support a bearish outlook in the coming sessions.
6k: This represents the primary resistance level on the chart. Oscillations near or above this level could end the ongoing bearish pressure and pave the way for new all-time highs.
5.6k: The next significant support zone, aligning with the 38.2% Fibonacci retracement level. Oscillations near this level could lead to a solid bearish trend and completely negate the long-term uptrend that has been in place since August 2024.
By Julian Pineda, CFA - Market Analyst
Support of Judgement-Bullish OR Bearish Based on FED reports today,
if there will be signals to decrease rate, it might bounce from this support.
Otherwise, it likely breaks this support.
Trading is not recommended based on the educational idea.
After price fluctuations end next week, position can be set.
Short Sellers: Liquidity Providers or Market Disruptors?█ Understanding Short Sellers: Liquidity Providers or Market Disruptors?
Short sellers often have a controversial reputation, viewed by many as market manipulators who profit from falling stock prices. However, recent research sheds light on an unexpected and valuable role they play: providing liquidity to the market, especially during critical moments like news releases. Let’s break down this concept in a way that’s approachable for everyone while maintaining the insights of the academic findings.
█ What Is Short Selling?
In simple terms, short selling is a trading strategy where an investor borrows shares of a stock, sells them, and hopes to buy them back later at a lower price to pocket the difference. While this might sound straightforward, it’s a high-risk activity because the potential losses are unlimited if the stock price rises instead of falling.
For long-term investors, the goal is usually to buy strong companies that will grow over time, benefiting from compounding returns and supporting broader economic growth. On the other hand, short selling tends to attract risk-seekers who aim to profit from price declines. Unfortunately, many inexperienced short sellers get burned by the complexities of market dynamics, including the balance of supply and demand for liquidity.
█ Why Is Short Selling Important?
Despite the risks, short sellers are essential to the financial markets. They help correct overpriced stocks and bring balance to valuations, contributing to more accurate pricing. Moreover, they provide critical insights during times of market euphoria or uncertainty.
One example of their importance is the role of short sellers during events like the “short squeezes” in GameStop or Volkswagen. These situations occur when a stock’s price skyrockets, often fueled by retail traders or unexpected news, forcing short sellers to buy back shares at higher prices. While dramatic, such events highlight the complex interaction between short selling and market liquidity.
█ A Fresh Perspective: Short Sellers as Liquidity Providers
Traditional thinking often casts short sellers as aggressive traders who demand liquidity—placing orders that consume existing bids or offers in the market. However, a recent study challenges this view, showing that some short sellers do the opposite: they provide liquidity.
Using transaction-level data, the study reveals that informed short sellers strategically supply liquidity by posting and maintaining limit orders. These orders help stabilize markets, especially during volatile periods like news days. This behavior contrasts with the common perception of short sellers as disruptive forces, instead positioning them as contributors to market efficiency.
█ Key Findings from the Research
The research, titled Stealthy Shorts: Informed Liquidity Supply, presents several critical insights:
⚪ Liquidity-Supplying vs. Liquidity-Demanding Short Sales:
Liquidity-supplying short sellers place limit orders, offering to sell shares at specific prices.
Liquidity-demanding short sellers use market orders, which take the best available prices.
The study found that liquidity-supplying short sales are more predictive of future stock returns than liquidity-demanding ones.
⚪ Predictive Power of Liquidity-Supplying Shorts:
Stocks with high levels of liquidity-supplying short sales underperform those with low levels over a 21-day holding period.
This pattern suggests that these short sellers have a long-term informational edge.
⚪ Impact on Price Discovery:
By providing liquidity, these short sellers help narrow bid-ask spreads, making it easier for other investors to enter or exit positions at favorable prices.
⚪ Informed Trading:
Liquidity-supplying short sellers often act on information not yet fully reflected in stock prices. For example, they are particularly active and accurate around news days when fresh information enters the market.
█ Implications for Investors and Regulators
The findings challenge regulators and market participants to rethink their views on short sellers. While short selling is often criticized for its potential to destabilize markets, this study highlights a more nuanced role: informed short sellers contribute to market liquidity and efficiency. For everyday investors, this means that short sellers aren’t just betting against companies but also helping ensure that stock prices reflect their true value over time.
█ Takeaways for Beginners
If you’re new to investing, here’s what you should know:
Short selling is risky and generally not recommended for beginners. The potential for unlimited losses makes it a strategy better suited for experienced traders.
Short sellers play a vital role in financial markets by helping correct mispricings and improving liquidity.
Understanding the mechanics of liquidity supply and demand can provide valuable insights into how markets function.
█ Final Thoughts
This research highlights the dual role of short sellers, particularly the most informed ones, as both traders and market stabilizers. By offering liquidity and acting on long-lived information, these traders help create more efficient markets, benefiting everyone from retail investors to large institutions. As always, a deeper understanding of market dynamics can empower better investment decisions and help you navigate the complexities of the financial world with confidence.
-----------------
Disclaimer
This is an educational study for entertainment purposes only.
The information in my Scripts/Indicators/Ideas/Algos/Systems does not constitute financial advice or a solicitation to buy or sell securities. I will not accept liability for any loss or damage, including without limitation any loss of profit, which may arise directly or indirectly from the use of or reliance on such information.
All investments involve risk, and the past performance of a security, industry, sector, market, financial product, trading strategy, backtest, or individual's trading does not guarantee future results or returns. Investors are fully responsible for any investment decisions they make. Such decisions should be based solely on evaluating their financial circumstances, investment objectives, risk tolerance, and liquidity needs.
My Scripts/Indicators/Ideas/Algos/Systems are only for educational purposes!
S&P 500 IndexThe chart displays the S&P 500 Index from the TradingView platform. It shows candlestick patterns reflecting price movements, a yellow line at the 5,927.89 level that appears to act as a resistance level, and a projection of future movement, suggesting an upward move to the resistance followed by a sharp decline.
Technical Analysis and Possible Actions:
Resistance Level (5,927.89): This level may serve as an area of increased selling pressure. If the index reaches this point and shows signs of reversal (e.g., a bearish candlestick pattern or weakening indicators), it could signal a selling opportunity.
Action Plan: Look for confirmation to enter a short position near the resistance. Use technical indicators like RSI or MACD to check for signs of overbought conditions or momentum loss.
Potential Downside Targets: Support levels seem to be around 5,904 or lower, depending on the strength of the downward move.
Technical Indicators: The lower part of the chart shows indicators that may point to the strength and momentum of the current trend. Ensure they align with the expected move for confirmation.
S&P 500 Analysis: Key Levels and Impact of NFP NewsS&P 500 Analysis
The price is currently ranging between 5895 and 5918, awaiting a breakout to determine the next direction.
A break below 5895 is likely to push the price into a bearish move toward 5863.
If the price remains above 5895, it may attempt to reach 5937 before any potential decline.
A break above 5937 would signal a bullish continuation towards 5969.
If the price stabilizes below 5863, it is expected to drop further to 5825.
Note: Today's Non-Farm Payrolls (NFP) data release is expected to have a significant impact on the market, potentially driving volatility and influencing these key levels.
Key Levels:
Pivot Point: 5900
Resistance Levels: 5937, 5969, 6002
Support Levels: 5863, 5845, 5825
S&P500 // neutral zoneThe market is in a neutral zone.
The trend is still long on the weekly, so a break above the long trigger (green), that is the previous daily breakdown, will invite more buyers, and the long expansion phase may kick in.
If today it closes significantly below the weekly impulse base, the first targets are the daily and the weekly support levels.
In my opinion, day traders have to wait. for the price to get out of this neutral zone.
———
Orange lines represent impulse bases on major timeframes, signaling the direction and validity of the prevailing trend by acting as key levels where significant momentum originated.
Level colors:
Daily - blue
Weekly - purple
Monthly - magenta
H4 - aqua
Long trigger - green
Short trigger - red
———
Stay grounded, stay present. 🏄🏼♂️
<<please boost 🚀 if you enjoy💚
Bearish drop?S&P500 (US500) has reacted off the pivot and could potentially drop to the 1st support which has been identified as a pullback support.
Pivot: 5,924.14
1st Support: 5,838.66
1st Resistance: 5,964.07
Risk Warning:
Trading Forex and CFDs carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Forex and CFDs may not be suitable for all investors, so please ensure that you fully understand the risks involved and seek independent advice if necessary.
Disclaimer:
The above opinions given constitute general market commentary, and do not constitute the opinion or advice of IC Markets or any form of personal or investment advice.
Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, are intended only to be informative, is not an advice nor a recommendation, nor research, or a record of our trading prices, or an offer of, or solicitation for a transaction in any financial instrument and thus should not be treated as such. The information provided does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Please be aware, that past performance is not a reliable indicator of future performance and/or results. Past Performance or Forward-looking scenarios based upon the reasonable beliefs of the third-party provider are not a guarantee of future performance. Actual results may differ materially from those anticipated in forward-looking or past performance statements. IC Markets makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or any information supplied by any third-party.
