LagunitaLLC
Short

SP500 (04/03/2020) - Classic pattern come back!!!

SPCFD:SPX   S&P 500 Index
FA
There are huge conflicts among the government system (FED, Treasury, IRS , and Trump).
- Relief checks arriving on April 13th: there are around 150 million taxpayers, but 70 million of them have direct deposit. More than half of the people will receive checks. However, the IRS capacity is 20 million checks per month. So some folk will receive check really late, probably 20 weeks.
- FED ammunition: In a nutshell, money is being printed; FED is working with Treasury for more buying power.
- Business Disaster Loans are being delayed as banks are not ready for loan applications.
- Unemployment claims skyrocketed to 6.6 million. If 1 person receives $500 dollars per week for unemployment benefit. The government will have to spend $3,300,000,000 per week. (These numbers are based on the minimum payment and unemployment claims data as of today).
All of these things above will place too much pressor on the Treasury. It will take more time than expected to execute all these tasks in a short time.
Unemployment rates will be released tomorrow at 8:30

TA
SP500 formed a classic pattern, head, and shoulder. We will expect a drop tomorrow.
Squeeze momentum is going down. RSI is dropping down in 4 hours chart.
The stock market could retest the low on Monday last week.

FED will definitely involve in trades tomorrow, please be careful!!


Comments

Yep. Fundamentals are shot, and that is the clearest H&S I've seen in years. I think we're basically waiting for the big money players to finish covering their losses by draining retail investors making FOMO plays, then they'll be just as short as the rest of us, and then it's down, down, down. Aside from the first drop that probably floored everyone, the rest of this has played out like just about every other crash, at least on the charts.
+1 Reply
so in your opinion, will this continue to fall early next week? Just looking at next move?should I collar the move?
Reply
@Ginossim, I'm having a lot of puts right now, ready to cash out. However, the stock has broken the average indicator, which I make in NASDAQ. So we will expect to see a huge drop coming. If today the profit is enough for you, sell it.
Reply
Interesting. We also see a bearish case for SPX based on a technical approach

+1 Reply
LagunitaLLC XForceGlobal
@XForceGlobal also with FA, I don’t think it’s a buy.
+1 Reply
any new thoughts, considering that nothing can move this market down for now?
+1 Reply
LagunitaLLC nataliaj2007
@nataliaj2007 coming down, hot
Reply
What about today's bounce? I think the news on the oil deal caused much more intraday optimism than it should have, but what are your thoughts?
Reply
LagunitaLLC tradinginformant
@tradinginformant I think oil is just one piece of the bigger picture. We might have a short term bounce. But in a long run, it’s still very bearish.
+3 Reply
Schmitty1 LagunitaLLC
@LagunitaLLC, Agreed, oil is only one piece of the puzzle. Oil will likely have a different pattern than the overall market. Can't wait to a re-test of last month's lows.
+2 Reply
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