S&P 500 (SPX) bounces off the 200W SMA Bear Trap Fully In Play
The bounce we have seen of the stock market generally has been attributed to comments made by this or that member of the Government or Fed, or it has been attributed to Crisis Response Teams, or whatever financial conspiracy people like to follow. But the chart simply shows that the price action of the S&P found support on the 200 MA on the weekly chart. The price action was torn apart by bearish divergence on the weekly timeframes, and now it is bouncing based off of indicators on the weekly timeframe. Please see my linked charts where I called the top and went over my thoughts on QT.
If you want to laser in on the timing to see when the bear trap will roll over dig into a 1d or 3d chart and start looking for hidden and classic divergence. Maybe look for the price action to die at the 20 or 50 MA on the weekly timeframe. Just know that the price action is going to continue down in a big way as quantitative tightening continues to restrict the money supply, crash prices, and in about two years, give us the best entry into the next uptrend we could ever hope to see.
The chart below should give you some perspective of the time scale I am looking at. That is the 3 Month or quarterly chart. I am looking to see a repeat of the pattern I outlined twice. We have a substantially tall green candle after severeal quarters of increasing red volume. We will then see, within a quarter or several, a red quarterly candle showing that the first sell off is complete, and then Imma be going in big.
If you want to laser in on the timing to see when the bear trap will roll over dig into a 1d or 3d chart and start looking for hidden and classic divergence. Maybe look for the price action to die at the 20 or 50 MA on the weekly timeframe. Just know that the price action is going to continue down in a big way as quantitative tightening continues to restrict the money supply, crash prices, and in about two years, give us the best entry into the next uptrend we could ever hope to see.
The chart below should give you some perspective of the time scale I am looking at. That is the 3 Month or quarterly chart. I am looking to see a repeat of the pattern I outlined twice. We have a substantially tall green candle after severeal quarters of increasing red volume. We will then see, within a quarter or several, a red quarterly candle showing that the first sell off is complete, and then Imma be going in big.
And I promise every Floridian that you will all be rich... because we're gonna print some more money! Why didn't anybody ever think of this before?
~Nathan Explosion
~Nathan Explosion
Below is a drill down into a lower timeframe to see why I think this bounce is about to reverse (where my original post said it would). The 2h chart shows how the RSI/MACD has displayed hidden bullish divergence since mid January. The RSI has a clear double top forming but a lower high on the price. The MACD trend line is drawn from the Signal line rather than the MACD proper and I hope to see the widening channel absolutely widen and the MACD to fall out the bottom. The histogram is in decline and so I expect we will see clear declines shortly.
I have a macro-post coming on how I think this will be one of the largest hits SPX has had in a 100 years. Stay tuned.