cacus

SPX500: rolling over or goldilocks economy coming back?

FX:SPX500   S&P 500 Index
2 Scenarios here, blue for bull, red for bear.

Bull scenarios:
Is this a huge bull flag?
A breakout above that top red line is definitely a bull signal for the coming months. So far, it is showing weakness.

Are we in a ABCDE triangle wave?
For this scenario we need an extra leg for D completion, a new wave meeting the lows again for E and finally a breakout at top is expected.

Bear scenarios:
Range action, rolling over
There's a nice price action between 125 and 200 MAs. Price seems trapped, sweet range action for short swings. Watch for price breakouts below 200 MA.

Bear Cypher pattern
There is an advanced             Cypher pattern , and possibly an intermediate Anti Crab at 61.8 fib.

There's more lines there to be drawn, long term trendline seems to be broken and price is trapped below, there's another down trendline on intermediate lower highs that is bearish too.
I won't draw those just to keep the chart as clean as possible.

On the fundamental side, we have:
  • HUGE expectations on Earnings reports. Multiples might surprise to the downside causing the market to drop, heavily.
  • Furthermore, there's a lot of geopolitical stuff going on that can cause an stampede.
  • Add to those the fact that fund managers are now switching to Bonds. If you take a look at the price action between 10Y Treasury bond yields and S&P500             you'll get my point. After 2.85 yield was achieved, both assets started competing.
  • Insiders action, since october last year they have been net SELLERS, coinciding with the last parabolic rise while mass media was inviting retail traders IN.


Hope you find it useful. I'll be updating with trading action as soon as I see fit.
Comment: Apparently, 61.8 it seems to be.
This might be a nice opportunity for shorts.
I already shorted some on DJI and Nasdaq. Didn't enter on SPX for now. I'll be looking for good setups and try to post some of them in the following days.
Stay tuned.