Spy / SP500 complex correction 4-7-20
I didn't have a lot of time today, but I wanted to get out a quick update as we're going into the close. This idea came to me as I was looking at complex triple corrections last night and saw similar patterns on the recent SP500/ES price movement.
The reasons I like this idea are both 1. Technical - bearish divergence on hourly RSI, DMI bearish cross on hourly chart, lack of real volume, break of uptrend channel - and 2. Psychological - many people are expecting a simple ABC to 2900 - and many others are expecting us to reach new lows very soon (I was in that camp until this week).
So what happens if the market fakes out both the bulls and bears? Well, then we have a correction like this.
Now, we COULD go higher than 2750 before this happens - but if we get below 2650 today/tonight, it would certainly help the case that the recent uptrend is broken and this idea may be taking shape.
I've been really missing the ball lately, so please just keep this in your mind as an option - it's not in any way a certainty. Targets are just suggestions - they are not fixed. We could also easily get to 2900 this week or we could completely fail here and go under 2400. I would like to add that Oil seems to be pulling back again and that may influence the market into a sell off (however, it's correlation to the market's movement is not something we can rely on consistently).
Right now, I like this idea for the reasons stated above. I wish you the very best of success in your trades
The reasons I like this idea are both 1. Technical - bearish divergence on hourly RSI, DMI bearish cross on hourly chart, lack of real volume, break of uptrend channel - and 2. Psychological - many people are expecting a simple ABC to 2900 - and many others are expecting us to reach new lows very soon (I was in that camp until this week).
So what happens if the market fakes out both the bulls and bears? Well, then we have a correction like this.
Now, we COULD go higher than 2750 before this happens - but if we get below 2650 today/tonight, it would certainly help the case that the recent uptrend is broken and this idea may be taking shape.
I've been really missing the ball lately, so please just keep this in your mind as an option - it's not in any way a certainty. Targets are just suggestions - they are not fixed. We could also easily get to 2900 this week or we could completely fail here and go under 2400. I would like to add that Oil seems to be pulling back again and that may influence the market into a sell off (however, it's correlation to the market's movement is not something we can rely on consistently).
Right now, I like this idea for the reasons stated above. I wish you the very best of success in your trades
הערה:
Expecting 2700 area to be reached on this retrace. If it goes higher, we may have a higher high coming with a test of the pink trendline channel.
הערה:
be aware - FOMC minutes will be announced at 2pm. Expect quick whipsaw swings at 2pm in both directions. Everyone deals with the minutes differently - some people take some profit before them, some people raise or lower stops so they don't get stopped out on a quick 30 point spike, some people just wait in cash, some people like to play the quick swings (not me). Fomc is always a roll of the dice, and it's hard to predict how the market will react to them regardless of what they say. Just keep it mind as we get close to 2pm. The market will probably slow down considerably before the announcement.
הערה:
we're about to get to 2700 area
הערה:
This is the possible count going into FOMC on SP500 cash index. If it goes higher than the high of today I will be suspicions of this count and expect higher highs coming. Personally I'm in cash and just going to wait to see how the market reacts into close. See you all later.
הערה:
We have gone higher and I'm suspicious of the count. If FOMC tanks the market at first, don't be surprised if it rallies back up quickly. This pattern is definitely on the table right now. Today can almost be counted in 5 waves, which indicates more upside possible after FOMC. These are possibilities right now, just trying to keep all ideas present in these posts. Good luck
הערה:
Watching this trendline. If we break above on SPX and test it, I will take a small long. I do think the upside is limited, but 2800 might be in reach.
הערה:
Oil up 8 percent right now
הערה:
If SPX fails here and sells into close, be careful of this
הערה:
Broke up, while crude has come back down. Strange. Waiting for a test of the pink line before trying a long
הערה:
Crude looks like a massive short squeeze/fake breakout right now
הערה:
the small wave 5 may be finished before close, we'll see. Pink line should be support for more upside, but we'll see.
הערה:
Expecting a backtest of this trendline
הערה:
In my opinion we are getting close to finishing the "return to normal" phase in a typical bubble. I can't put outside links on this site, but if you google "stock bubble chart" you'll see the stages of an ongoing crash. The news from the Fed, etc is just part of that cycle.
הערה:
backtest of trendline, then we'll see what happens for the rest of the day
הערה:
הערה:
upper purple trendline needs to hold for any decent pullback to take place
הערה:
Possible count right now
הערה:
trendline holding so far, looks like we may sell off today. Tomorrow the market is on holiday. I still think one more high will make sense but maybe not today
הערה:
Grind up the rest of the day most likely
הערה:
Looks like a sell signal. under 2700 and we have something larger on our hands
