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S&P 500 Forecast: Index Wipes Out Most of Wednesday LossesThe S&P 500 has rallied significantly during the course of trading on Thursday to wipe out the losses from the Wednesday session. We managed to close above the 50 day EMA, as it looks like markets are ready to continue to go to the upside for a longer-term move. All things being equal, this is a market that I think continues to see plenty of interest, as we have seen so much in the way of bullish behavior over the last several months. Yes, the market has negative for a while, but that has been the most recent behavior, and at this point in time it is but a blip on the radar of the longer-term trend. That being said, the market is likely to continue to see buyers looking for value, especially as the end of the year approaches, and people will be looking to reach some type of benchmark for their clients. Because of this, we have the so-called “Santa Claus rally” that typically happens at the end of every year, and I do not see this year being any different. Because of this, I think what we have is a scenario where every dip will be bought into, and we will eventually go looking towards the 4800 level. The market is currently hanging around the 50 day EMA, so that will attract a lot of trading, but at the end of the day the most important thing to pay attention to here is the fact that the jobs number is coming out on Friday, and it will almost certainly cause a significant amount of volatility. The market selling off quite drastically on Friday will almost certainly be bought back into, which is typically the case with the Non-Farm Payroll Friday situation. This is because liquidity disappears, and people will find some type of narrative to start buying the dips. That is what Wall Street does, it finds reasons to go higher. Furthermore, even though the Federal Reserve is pretending like it is worried about inflation, the reality is that the first time Wall Street throws a serious tantrum, they will step in and save the banks. Because of this, it is not really a market so much as it is a bidding war to see who can push things higher over the longer term.
OANDA:SPX500USDLong
by SmoothJB
3
SPX500USDIt's likely that we will see a little bit of a pullback as we are at the top of the range. The S&P 500 has rallied a bit during the course of the trading session on Thursday before turning around to form a bit of a shooting star. The candlestick of course is very bearish, and it is worth noting that the NASDAQ 100 has formed something along the lines of a “evening star.” That of course is a negative sign, suggesting that perhaps stocks are going to roll over. To the downside, the uptrend line continues offer support, right along with the 50 day EMA. Beyond that, the 4500 level before they are also offer support, so I think it is only a matter of time before we see some type of bounce. We have been in an uptrend, and I think that does not change anytime soon, so therefore it is only a matter of time before buyers get in on dips and take advantage of “cheap stocks.” After all, this has been a bit of a “buy on the dip” type of market for ages, especially as the Federal Reserve continues to offer cheap money for traders to indulge in. Despite the fact that there has been talk of tapering later this year, the reality is that there is no real sense of them raising interest rates anytime soon. If we were to turn around a break above the top of the shooting star, then the market is likely to go looking towards the 4600 level, as the market tends to move in 200 point increments. After that, it will be interesting to see where we go next, but it is very possible it could be 4800. There is always the negative turn of events, and that would be something that I would play via puts, because flat-out shorting the S&P 500 has been a very dangerous thing to do for ages, and as a result it is difficult to imagine a scenario where I would actually do that. You look at the chart and you could see a plainly carved out up trending channel, so as long as that remains in effect, it tells you where you are going to be a buyer and perhaps take a significant amount of profits along the way. Because of this, as we are at the top of the range is likely that we will see a little bit of a pullback.
OANDA:SPX500USDShort
by SmoothJB
S&P Further thoughts(a) is the 50MA, it can be seen to be curling upwards and the comparison point (a) shows this ends in a bearish outcome (b) is a similar points on TSI where I expect a reoccurrence of the pattern in oval to occur, likely acting bearishly. As i have said before, assess the situation based on impact 2008 banking crisis the market collapsed 2020 COVID? Upward movement seems unjustified. Here is a chart that further explains that philosophy. I know the charts are kinda similar but I wanted to restate this for those unaware..
CME_MINI:ES1!
by Bixley
4
ES1! - Not at the top... Not even closeLook at the expansion in the MACD /signal lines. We haven't hit overbought yet. If you step into a weekly chart and examine the last few major advances in the market before 'peaks' (2000 dot com bubble for instance), note that there is negative divergence on MACD and RSI well ahead of the actual peak. We've barely hit the base camp to look at the summit. Does this mean there won't be major corrections in the future? Heck no. Volatility is going to ramp up along with inflation . That's the nature of the beast. Cheers & happy trading everyone.
CME_MINI:ES1!Long
by SLOPolarBear
1
SPY - November to PresentDouble bottom divergence on RSI today. Looking at all the reversals from pullbacks before, this is an excellent time to open a LONG position in the SPY. Starting to see more of the same in my basket of stocks that looked pretty bearish the past few days. Loving that long term MACD trend line. Average volume spikes are not losing their intensity, but they're losing their duration. This tells me that the market is warming up to higher highs. I would like to have seen a 10% pullback here, but it doesn't look like we'll get it just yet. Volatility just hit its long term upper trendline as well, further reinforcing what we see above in the SPY.
AMEX:SPYLong
by SLOPolarBear
9
VIX - Positive ChannelSetups that looked beautiful on Tues/Wed were pretty much broken by Thur. We usually see this happen right before a major pullback in the market (5-10%). We got a fake breakout on the SPY as it gapped up this AM. Sellers took control quickly and as I write this the market is retesting the flag it's been inside of the past week. The VIX is printing a positive trending channel and it's showing lots of bullish micro trends within it. I've moved everything to cash for the time being and waiting patiently for a strong buy signal for volatility or go-ahead to purchase long. The setups I had been stopped out of are at a decent price, but I'm not seeing spring in the price action. A good quality 'low' price shouldn't give you much time to buy it. I've had ample opportunity to secure low prices over the past two days, and that concerns me. This groundhog see's a few more days of clouds in markets...
TVC:VIX
by SLOPolarBear
1
How to Trade a Scythe Pattern (SPY used as example)I see these all the time on 5-m charts. I attribute them to algos trading shares with each other. The way price action advances and declines (and the speed), leads me to believe computers performing high speed day trading with one another. That aside, be on the look out for them! They can sometimes be a wonderful tool to predict a large price movement in short time. I've included a 5-m chart of this pattern below. Refer to it after reading: To trade the Scythe Pattern: SHORT when you see this pattern after an uptrend or high (like the example illustrated below - SPY 2.17.2021), go LONG when you see the inverted scythe at the bottom of a downtrend or low. I treat it as a modified cup & handle. I use the measurement from the base of the scythe beard (lower left edge) to the top of the blade (see rulers in image below) I regularly see this pattern break out above the tip (fake out) before ripping in a cascade fashion lower. Look for this pattern where you see price cascade on lower time frames (1-10m). The tighter the price action in the scythe blade, the more accurate the results. I have not tested this pattern on higher time frames, but I am currently doing so with some hourly/daily/monthly charts I've identified. More often than not , I spot this at a high and realize that I should either avoid going long or open a short. This pattern wrapped up the trading session on 2/16/21, predicting the gap down to follow. Again, the dynamics of the scythe are much more clear on lower time frames. So add the scythe pattern to your tool chest and let me know how you like it. Enjoy!
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AMEX:SPYEducation
by SLOPolarBear
29
S&P 500 Index (8H) / Elliott Wave Update / Tricky S&PAs a reminder, there is not overlap between green submicro W2 & W4 on the cash index which is the one that matters. There is no alternation as both structures are truncated ZZs (!). Remember that a guideline is NOT a rule. And yes, counting waves on the indices has been (very) tricky. Please like and share if you appreciate this market update. We are certified Elliotticians and publish Elliott Wave counts for indices, stocks & ETFs, cryptos, and commodities, in weekly, daily and 4-hour timeframes. Cryptos are updated every day of the week and on Saturday, if necessary. Traditional assets are updated on Monday, Tuesday, Wednesday and Thursday, and if necessary, on Friday. Elliott wave & Fibonacci labelling: Common path in white, bullish count in green, bearih count in red.
TVC:SPX
by TradingSurfers
4