#DayTrader
#SwingTrader
NOT a financial advisor. Do not buy or sell based off my tweets. I may be buying, selling, or holding any stock mentioned. Hebrews 13:5
$SPY rally is done. Back on June 16th I posted this and many dismissed it saying it was too unlikely for a rally that steep. Here we are, and now everyone is dismissing my call for the rally being over. Big wave down coming as we head into midterms
$SPX another monthly view with the monthly 30sma (purple) and monthly 9sma (white). This particular death cross has only flashed 3 times in the last 23 years.
$SPY weekly chart: on a longer time frame it becomes more obvious what is missing for a bottom. Volume. Instead of volume surging we are seeing volume decreasing as we drop further.
$SPY back at the rising trend of the rising wedge. *When* this breaks down I expect the move to be brutal. Remember, the Fed and the Treasury have both been removing lots of liquidity.
$SPX another perspective on the latest pattern. Notice after the main downtrend rejection there has been a retrace to another downtrend that has marked the peak before the next downleg. This has happened at the end of the consolidation phase.
🧵Three things to watch in coming weeks/months:
1) Diesel shortage (~25 days of supply) prices likely to spike
2) Second railroad union votes down labor deal needed to avoid nationwide strike
3) Growing Pile of Distressed Debt Signals Coming US Default Wave
What better time than to start bringing out the 2008 comparisons again to tick everyone off!
There are definitely more differences now than just a month ago when I last posted this model comparison. The main thing is the overall structure eerily similar.
$SPY all 3 of my closely followed indicators have given off sell signals. The last 3 times they've all triggered together it has had led to more downside with the last time in December having the smallest follow through.
I believe this next downleg will be more similar to the
$SPY The CCI has been a good tool in spotting trend reversals and confirmations this year. The pattern has been bearish divergence, break below the zero line, then a rebound to the zero line (give or take) after several days of consolidation or bounce, followed by a kill candle.
$SPX $SPY inverted cup and handle. If you are not familiar with the pattern then look it up. Very powerful.
Credit to
@eliant_capital
for spotting this
$SPY updated daily chart: We could end up trading out nearly identical to the last two major bear market rallies. As long as we're trading inside the rising wedge bulls have the upper hand. Once we break and close below the wedge is when bears have a real chance at making a move
$VIX walked down the entire day and $SPY has struggled all day. Passive flows being used to keep SPY from cratering. Soon VIX reverses and SPY will not be able to hold up imo
I believe the next downturn could be violent. Timing could be difficult but I believe we are very close to stalling out. Upside is very limited in my view vs the downside
$SPY $SPX very strong close right at the downtrend.
If you think a bear market ends as soon as it breaks the downtrend, I have some sad news. It's never that simple. You will be challenged to find a bear market that respected its downtrend the entire bear market.
When the bull case becomes rates don't matter, yield curve inversions don't matter, earnings and outlook doesn't matter, inflation doesn't matter, a stronger dollar doesn't matter, geopolitical tensions don't matter, it's different this time, only up, etc. you should be concerned
$SPX I'm watching this closely this week. If this is like the previous bear market rallies then today (possibly tomorrow) should mark the top before the next down leg. I am building bearish positions again after covering 3/2 when I sent out the warning of a move up
It doesn’t matter how you look at things. From Fed cycles, to stock-bond cycles, to stock-economic cycles. None of these cycles suggests a bottom is in. If anything they suggest a top was put in. Energy is the last to peak. It’s never different this time
$SPX quarterly chart (showing yesterday's close unfortunately, but close enough). Notice the MACD. First quarter it's flipped from positive to negative since mid 2008 and Q1 2001
What has happened when the weekly 30ema crosses below the weekly 90 ema? 🧵
Since 1973 it's only happened 5 times and currently doing it for the 6th time
$SPX closed right at the top of the wedge. Maybe we get an overthrow tomorrow before pulling back. Otherwise, we should retrace some of today's massive move
In 2008 we bounced about 11.5% in two days after making a new low for the year. That ended up marking the final stage before the crash.
I'm not saying we are going to crash or that this is 2008. I'm showing why it's essential to remain cautious during the most volatile markets
$SPX monthly (showing yesterday's close). Huge rejection at the monthly 20sma. The last two times we had similar rejections we were at 3600s within a month.
The monthly 50sma looks like a potential target.
$SPY daily: shows the breakdown is already starting. We've seen this same pattern/setup two previous times this year. Both the CCI and stochastics suggesting another peak is in/near for this bear market rally.
$SPX monthly: Taking a step back from all the short term time frames you can see we are still well above the long term trend.
More importantly, we are back under the steep rising trend that acted as resistance before record QE and 0% rates. I believe we will test the rising
$SPX poked above a trend I pointed out earlier this week but quickly pulled back and closed at it. It has been a point of rejection.
CCI jumped to the 0 line. Notice the trend has been when coming out of oversold levels it spikes towards 0 before a large pullback (arrows)
We are at the level of market insanity that a fed member openly laughs at the thought of Wall Street losing the fight against the Fed, and still markets ignore said risk.
Had a conversation with a money manager that manages accounts for high net worth clients. Here’s one thing he said:
I know a sustainable bottom isn’t in because I haven’t lost sleep yet, and I haven’t gotten sick to my stomach.
The Fed has declared war on the economy and investors are completely blinded by fear of missing the next bull run, or even bear market rally, and instead they will get one of the worst drawdowns ever.
$SPX $SPY My wild guess how I think this year could play out. 2 different paths that I believe are reasonable.
I believe the dominant headwinds are sticky inflation, debt ceiling crisis (early June), and recession/capitulation in the 2nd half.
IMO 3000 min before bear can end.
$QQQ the biggest warning sign for me is QQQ not even coming close to filling its gap like $SPY did last week. Keep in mind that QQQ often peaks a month or more before SPY does. Seeing relative weakness in the Qs vs SPY cannot be ignored.
Sentiment today:
At the open: short squeeze!
2 hours after the open: we’re headed straight to 3500 to retest the low
Just before the close: what is happening?
After hours: netflix earnings confirmed we bottomed
$TSLA what a lovely candle.
If we get a gap down plus a red bar we could be looking at a bearish abandoned baby. Yup, sounds weird but it's a rare 3 day pattern that is often a strong reversal signal.
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$SPY early signs of a reversal on a rising wedge breakdown after running into resistance last week. Always room to backtest the breakdown before heading lower. Based on this current setup I expect new lows before end of the year or very early 2023