CarlsonCryptoTrading
Short

SPX - TA and Analysis - 23/05/20

SPCFD:SPX   S&P 500 Index
1310 views
21
Please leave a comment if you have any questions and a LIKE if you agree with the idea.

I am BEARISH on the SPX as I believe the problems in America have not been fixed.

Fundamentally, there is a lot of problems that have uncertainties such as
  • When will consumerism get back to normal for big business
  • People will feel safe financially and in regards to health
  • Is there going to be any new innovation during these trying times or are they going to be trying to prop up existing businesses

I have put up the scenario of a head and shoulders pattern playing out with the necessary points stated on the chart.

Also, end of financial year is coming so we will have businesses who will be putting out their forecasts for the future which will have 2 outcomes.
  • Forecast low figures as they expect a slow down on average and investors will price this in
  • Forecast great business and trade and then have a shock when actual numbers get compared to the forecasted numbers (In this scenario we might have a delayed head and shoulders with the right shoulder higher than the left shoulder)

As much as it would be good to have the world back to how it was before COVID-19 I think due to the global issues that this is posing it will need to be rebuilt which will cause a downturn in the market.

Disclaimer: I have done this idea for SPX as I believe there is still a strong correlation with BTCUSD so I will be using this drop to time when to trade with BTCUSD . I believe the correlation is strong as a lot of institutional investors have a 1% allocation to this asset class (You would be stupid to not get exposure in your portfolio considering the history of this asset.)

FOLLOW me if you would like to stay engaged with my ideas.

Maintain or gain.
Comment: We are currently at the point where I expect to be the top of the right shoulder. This is where I would be using my correlations to other markets to determine if a rally will continue or if we are at the turning point.

Lets get the popcorn and watch :)

Comments

IMO it will break hard in June. The 200DMA is at 3K. 2008 crash retraced to 200DMA before the main break.
+3 Reply
@DaddySawbucks, i guess June could be when investors start getting a clearer picture of what is coming in 2020-2021 year to come and can price it in.
Reply
Yea I like the conservative estimate and agree in principal but I think your timeline might need more compression.
+2 Reply
@lauc42, I'm not sure if i put the right dates in there but I had the big drop lining up with the November 2020 elections in the US to confirm a depression and the initial decline after July 2020 where we dont go above 3000ish.
+1 Reply
Wanted to build on this with some 1W trend and technical analysis:
+1 Reply
@ProfitHarvest, share the link here when you do your analysis :)
+1 Reply
Isn't that the masses positioning? Bearish on stocks?
+1 Reply
@ZoltanBalogh, it may be the retail masses but someone's holding the price of the markets above water, and it looks to be purely the Fed and by proxy institutional investors IMO. What happens when that stops working because there is only so much you can do with QE for the stock market and that is the only tool they have?

Are you implying that you have a bullish case for stocks right now?
+1 Reply
Oh god, the 1W looks terrifying! First I’ve seen this. What a freaking massive H&S setup call.

Your timeline is a great reference but yea we’re almost certainly gonna retest lows in June if not July. Not 2021, no way. Programmatic selloffs move the market too damn fast these days.

+1 Reply
@ProfitHarvest, Yeah definitely need to compress this projection in a bit more. Thanks for the feedback
+1 Reply
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