SPX Futures, A clear and present danger
In some ways, the bulls have already won. But having a contract change over lead to a 50+ point gap between the actual SPX and the SPX futures is stunning. I mean, wow. How does one trade this? You DO NOT. I have lost enough money this week.
I have drawn in our problems.
1st, From the last fib (which we gapped up onto) I have dropped in the volume profile. The point of control is still very low. At minimum, I assume sideways until FED, to accumulate volume interest in this zone just above the white fib line.
What is that white fib line? On my chart, as always, it is the 23% of a final extension channel to a much larger channel. But for our current position, all that matters to me is these lines.
So, I have this counter narrative of a bear channel, very large, created by the double bottom of 2008, which made a lower low before this very long rally. That red line doesn't necessarily need to be revisited, but it bothers me that we didn't clearly retest. Either it means nothing means anything in this last bubble rally, or we will dump hard and rebound harder.
Honestly, technicals no longer explain price action and position. Volume will get thinner and thinner, and I think the lack of a revisit to the lower point of control will give it a reason to revisit that price in a few years when we shed 60%. But by then, we'd essentially come down to current prices.
So, I'm looking at futures, which are trading above my white 23% fib, and I'm looking at the index which is trading BELOW the same line by 50 pts. Things are messed up. Volumes go up while ADV/DCLN go down, tick is all over the place. Breath is broken for the time being.
I still remain bullish. I think we are in the process of invalidating the forever channel. I think the signal will be an ascending triangle, but we'll break out of it and run for the border of the all time bull channel since 1930, which is roughly the orange line. We already broke it at the all time high. I think we will need to retest this major top. From there we will either crash, or we will fight for that line and explore unknown worlds above for some time. I think that could create the bubble. A zig zag win of the top of the bull channel of all time, and then brief play above it for two legs, then a Wyckoff Distribution for a couple years, then a good and true decent for awhile.
But the path from here to there is riddled with false break outs and major dips. The day the FED says they are done means the stock market will be peaking. And when they say the economy is too fragile to raise, then predictive futures will fall. Right now, raising rates is always a signal the economy and thus profits are doing too well, IMO.
I have drawn in our problems.
1st, From the last fib (which we gapped up onto) I have dropped in the volume profile. The point of control is still very low. At minimum, I assume sideways until FED, to accumulate volume interest in this zone just above the white fib line.
What is that white fib line? On my chart, as always, it is the 23% of a final extension channel to a much larger channel. But for our current position, all that matters to me is these lines.
So, I have this counter narrative of a bear channel, very large, created by the double bottom of 2008, which made a lower low before this very long rally. That red line doesn't necessarily need to be revisited, but it bothers me that we didn't clearly retest. Either it means nothing means anything in this last bubble rally, or we will dump hard and rebound harder.
Honestly, technicals no longer explain price action and position. Volume will get thinner and thinner, and I think the lack of a revisit to the lower point of control will give it a reason to revisit that price in a few years when we shed 60%. But by then, we'd essentially come down to current prices.
So, I'm looking at futures, which are trading above my white 23% fib, and I'm looking at the index which is trading BELOW the same line by 50 pts. Things are messed up. Volumes go up while ADV/DCLN go down, tick is all over the place. Breath is broken for the time being.
I still remain bullish. I think we are in the process of invalidating the forever channel. I think the signal will be an ascending triangle, but we'll break out of it and run for the border of the all time bull channel since 1930, which is roughly the orange line. We already broke it at the all time high. I think we will need to retest this major top. From there we will either crash, or we will fight for that line and explore unknown worlds above for some time. I think that could create the bubble. A zig zag win of the top of the bull channel of all time, and then brief play above it for two legs, then a Wyckoff Distribution for a couple years, then a good and true decent for awhile.
But the path from here to there is riddled with false break outs and major dips. The day the FED says they are done means the stock market will be peaking. And when they say the economy is too fragile to raise, then predictive futures will fall. Right now, raising rates is always a signal the economy and thus profits are doing too well, IMO.