A quick note: This is tagged as long, for the wider outlook.
Zone colour Master Key: Blue = Monthly Purple = weekly Orange = Daily Grey = 4hour Pink = 1 hour
Here is an update to the previous idea - keep in mind the imbalances in the wider time frames. What does this chart show? Well, the trendline has been tested, but a higher low has been created suggesting that a correctional move was imminent.
Why in this "sell off" remaining cool, calm and collected is important here. The emotional move in profit taking is crucial, but this move was needed. see the Fibonacci aligning here; This was another opportunity to add a long position - all be it small as price is at a costly price to buy in. But the power of compounding and average price will allow for these moves to take on a short term horizonal risk. The Fibonacci retracement aligns and a buy order can be placed. Note* this 61.8% maybe broken in the short term for a trendline retest of a false breakout to pin a bearish move.
See the correctional move from the channel below. Notice how price is back within the lower green target. The trendline has been tested of 6 losing days consecutively.
The 2021 analysis: Price has followed the path prediction thus far to a almost perfection at this moment in time. The reason for this is using the daily, weekly and monthly. The probability of the imbalances remain clear
Multi time frame analysis: SPX is in need of a correctional Rolling returns - historical data . Using the base model of 3 year rolling returns, the simplified explanation of the model shows a 41/50 years have returned a positive growth. As opposed to 6 years of negative returns. With 2020 closing out 16.26% return .
*Note - the 6 years where the rolling return is negative - the dot com bubble only stood to lose 6.2%* Est.
SPX is in need of a correctional move using the monthly time frame
Daily time frame:
A four hour perspective of where price has moved from for the bullish scenario in the short term.
SPX vs the Vix The Vix to be maintaining below 35 max positional moves will show correctional patterns of distribution flows in the smaller timeframes where price engineering will take place to allow discounted prices to occur. This will tend to steady the recovery but also give the rally base rally move a chance to breathe.
SPX vs Emerging: What does the emerging markets show us? Well the imbalances are within the same as the US market, but the economic recovery in terms of imbalance price driving in the EEM - shows that whilst fundamentally there is more volatility . The activeness of these markets provides a telling Fibonacci extension target is not to dissimilar along with the SPX . The commodities such as Copper , Silver , Gold and Platinum will now provide a solid buy opportunity now the demand will grow.
The second image shows the return % of the fund upon a scale against the SPX on a daily chart close.
Fundamental failures, to ensure imbalances are made clear for the bullish scenario. The FED injecting 22% of all USD in circulation within one year. A Staggering amount of est 9T USD was injected to save the US from collapse, despite its ever mounting debt of as it stands 11. 01 .2021 27.775T USD usdebtclock.org/index.html The question remains as the USD loses value - in order to promote cheaper investment and more prospects for cheaper imports - the country will have a real issue with the constant cycle of financing debt upon debit.
With the Global fiscal policy to remain between 1.5-2% - this should keep the FED side lined for a few years monitoring the US and world economy. What we would expect to see will be the growth of EM and commodity based countries in terms of FX to continue the growth against the USD.
Last comparison; Inflation ETF vs SPX500 . If you as a trader are interested in the price ratio of Shiller P/E ratio , the market is at this moment 35.83x, with low inflation at the moment, the bulls are on the run. Watch this space.
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