Time for me to give my view on SPX for probably the next month.
The EWT in this chart should only be used as a guide. It's very subjective and price action and geometry are what I give more weight, so lets discuss that for now. I'll also focus a bit on the indicators below the chart as well.
First, notice the sell signal in January of 2022 which was the top of SPX. You had a sell signal on both the wave master and the momentum indicator that was stating that we were are the top of the price action.
Next, notice the two times we got buy signals with confluence in both indicators. June 17, 2022 and October 13, 2022. These are both on the daily timeframes. Both times resulted in significant rallies.
Finally, notice the last sell signal that we got. February 8, 2023. That is the first sell signal we've received in over a year (if you are solely looking for confluence across both indicators - which you should be). We've had a decent decline so far.
Ok, now lets move to trendlines.
First, notice the downtrend line (DTL) from the ATH down to the recent price pivot yesterday. This trendline is very important and I do not expect we will break it. Remember, this is an index made up of 500 stocks, so there's 500 different factors that will move this train. Likely, there will be money rotating in these underlying stocks which will keep price action above this DTL.
Second, notice the uptrend line (UTL) from the low in October which is marked in yellow. We broke it. I suspect we will stay below this for quite a while. If we get back above it in the next few trading days, that would be the most bullish thing I've seen in a long time.
Third, the price action between both trendlines is forming somewhat of a chuvashov fork. We'll likely just stay within the bounds of both trendlines until probably at least april before starting another trending move.
Ok. Now how about sentiment.
I'm starting to see more doomsday charts out there. It's not to the craze I'd like to see in order to flip bullish so this chop is probably going to build some kind of formation to feed the bears. I think we need more time to develop and this fork is going to really help define the future, at least short term, a bit.
There's also a LOT of bulls out there that are talking about this DTL. We just successfully retested it. Is this a valid correction from my green wave A to complete wave B (green)? I don't think so. I think more time is needed.
Why?
TIME TIME TIME TIME TIME
Look at the time it took to get from the bottom in October to the top in January. October. January. 4 months. Are you teling me the whole dang thing finished correcting in 3 weeks? Doubtful. We need more time. At least 8 weeks if we go half of the time. We're at the point now that a lot of people are getting 45DTE options OTM for upside plays and people late to the party shorting as well. Let's decay those options and squeeze them out.
Give the market some time and by all means, make everything a short term play for now. We're likely in for a boring month but if the market decides to really get volatile, I'll be ready for that, too.
The EWT in this chart should only be used as a guide. It's very subjective and price action and geometry are what I give more weight, so lets discuss that for now. I'll also focus a bit on the indicators below the chart as well.
First, notice the sell signal in January of 2022 which was the top of SPX. You had a sell signal on both the wave master and the momentum indicator that was stating that we were are the top of the price action.
Next, notice the two times we got buy signals with confluence in both indicators. June 17, 2022 and October 13, 2022. These are both on the daily timeframes. Both times resulted in significant rallies.
Finally, notice the last sell signal that we got. February 8, 2023. That is the first sell signal we've received in over a year (if you are solely looking for confluence across both indicators - which you should be). We've had a decent decline so far.
Ok, now lets move to trendlines.
First, notice the downtrend line (DTL) from the ATH down to the recent price pivot yesterday. This trendline is very important and I do not expect we will break it. Remember, this is an index made up of 500 stocks, so there's 500 different factors that will move this train. Likely, there will be money rotating in these underlying stocks which will keep price action above this DTL.
Second, notice the uptrend line (UTL) from the low in October which is marked in yellow. We broke it. I suspect we will stay below this for quite a while. If we get back above it in the next few trading days, that would be the most bullish thing I've seen in a long time.
Third, the price action between both trendlines is forming somewhat of a chuvashov fork. We'll likely just stay within the bounds of both trendlines until probably at least april before starting another trending move.
Ok. Now how about sentiment.
I'm starting to see more doomsday charts out there. It's not to the craze I'd like to see in order to flip bullish so this chop is probably going to build some kind of formation to feed the bears. I think we need more time to develop and this fork is going to really help define the future, at least short term, a bit.
There's also a LOT of bulls out there that are talking about this DTL. We just successfully retested it. Is this a valid correction from my green wave A to complete wave B (green)? I don't think so. I think more time is needed.
Why?
TIME TIME TIME TIME TIME
Look at the time it took to get from the bottom in October to the top in January. October. January. 4 months. Are you teling me the whole dang thing finished correcting in 3 weeks? Doubtful. We need more time. At least 8 weeks if we go half of the time. We're at the point now that a lot of people are getting 45DTE options OTM for upside plays and people late to the party shorting as well. Let's decay those options and squeeze them out.
Give the market some time and by all means, make everything a short term play for now. We're likely in for a boring month but if the market decides to really get volatile, I'll be ready for that, too.
