a weekly price action market recap and outlook - sp500 e-mini
Good day, I hope you are well and enjoyed the holidays.
This is my post from before US Session open today, sorry for posting late here.
overall market comment
tl;dr monthly update: The following are my very rough guesses what could happen over the next 6 months and why this trend is on it’s last leg
Q1 earnings will show weakness and market stops making new highs and does a small correction before sideways/retest of highs. Economic indicators continue to deteriorate
Q1-Q2 once the price advances stop, more profit taking will follow and we begin a downtrend
Q3/Q4 CBs will start the cutting if inflation does not tick up consecutive months and that’s usually where we see the beginning of the bigger down turn
If the above are roughly accurate, my bearish outlooks on the weekly/monthly could work out. If not, markets could just continue the pump until next event happens.
sp500
Quote from last Thursday:
bull case: Bulls got the more up but barely. The high today was 3 points below the ath and that qualifies as a double top. Do we trade down from here? I don’t know. If bulls can keep it above 5300, it’s as bullish as it gets. Many support lines below on the chart and bears not doing enough to make bulls take profit. If bulls can close this quarter at the highs again, consider me dumbstruck again.
Market gapped up big in Globex for new ath and last week also closed green. Market is staying inside the tight bull channel starting 2024-01-05, which i marked as W3. In my calculations W5 should be done because we already overshot enough but market obviously does not care and could go on. I’m just saying that this is overbought, overdone and i expect a bigger correction very soon. It’s always at the end of moves where it’s not turning where it should have to fool weak traders into thinking “this time is different” and market can only go up. The small bull channel will be broken over the next 1-3 weeks and we will touch the daily 20ema (around 5240) and afterwards break 5200 again and 5000 over the next 1-2 months. Also, Nasdaq is clearly forming a top already and many Generals stopped advancing. There won’t be a -10% on Nasdaq while the SP500 gains +10, that’s not how this works.
bull case: Bulls in full control but as stated above, buying up here is so much risk for a very limited upside imo. Trade small and long until bears show up. For me, all calculated targets are met and I now just wait until market shows weakness. Obviously bulls can continue to grind it even higher. I pay close attention to market generals because they often show the way. Apple shows weakness for many weeks now but banks are melting up. If bank earnings do not surprise upwards, my best guess is, that it will mark the high and last earnings surprised downwards. Earnings will start next week.
bear case: Bears need to stop the bulls from making new highs and break the tight bull channel. Then we can talk. I do think the reasonable trade for the rest of the year is to the down side. Now it’s about being patient and not FOMO into stupid trades. I have drawn my rough guess but market has to turn and selling pressure has to build first for this to have any merit.
short term: overbought and overdone - not doing anything besides small scalps and waiting for market to change character.
medium-long term: All of my calculated bullish targets are met and market is beyond overbought. No more updates here before we see bears showing up.
This is my post from before US Session open today, sorry for posting late here.
overall market comment
tl;dr monthly update: The following are my very rough guesses what could happen over the next 6 months and why this trend is on it’s last leg
Q1 earnings will show weakness and market stops making new highs and does a small correction before sideways/retest of highs. Economic indicators continue to deteriorate
Q1-Q2 once the price advances stop, more profit taking will follow and we begin a downtrend
Q3/Q4 CBs will start the cutting if inflation does not tick up consecutive months and that’s usually where we see the beginning of the bigger down turn
If the above are roughly accurate, my bearish outlooks on the weekly/monthly could work out. If not, markets could just continue the pump until next event happens.
sp500
Quote from last Thursday:
bull case: Bulls got the more up but barely. The high today was 3 points below the ath and that qualifies as a double top. Do we trade down from here? I don’t know. If bulls can keep it above 5300, it’s as bullish as it gets. Many support lines below on the chart and bears not doing enough to make bulls take profit. If bulls can close this quarter at the highs again, consider me dumbstruck again.
Market gapped up big in Globex for new ath and last week also closed green. Market is staying inside the tight bull channel starting 2024-01-05, which i marked as W3. In my calculations W5 should be done because we already overshot enough but market obviously does not care and could go on. I’m just saying that this is overbought, overdone and i expect a bigger correction very soon. It’s always at the end of moves where it’s not turning where it should have to fool weak traders into thinking “this time is different” and market can only go up. The small bull channel will be broken over the next 1-3 weeks and we will touch the daily 20ema (around 5240) and afterwards break 5200 again and 5000 over the next 1-2 months. Also, Nasdaq is clearly forming a top already and many Generals stopped advancing. There won’t be a -10% on Nasdaq while the SP500 gains +10, that’s not how this works.
bull case: Bulls in full control but as stated above, buying up here is so much risk for a very limited upside imo. Trade small and long until bears show up. For me, all calculated targets are met and I now just wait until market shows weakness. Obviously bulls can continue to grind it even higher. I pay close attention to market generals because they often show the way. Apple shows weakness for many weeks now but banks are melting up. If bank earnings do not surprise upwards, my best guess is, that it will mark the high and last earnings surprised downwards. Earnings will start next week.
bear case: Bears need to stop the bulls from making new highs and break the tight bull channel. Then we can talk. I do think the reasonable trade for the rest of the year is to the down side. Now it’s about being patient and not FOMO into stupid trades. I have drawn my rough guess but market has to turn and selling pressure has to build first for this to have any merit.
short term: overbought and overdone - not doing anything besides small scalps and waiting for market to change character.
medium-long term: All of my calculated bullish targets are met and market is beyond overbought. No more updates here before we see bears showing up.