SP500 - Some indicators call for a possible small correction
After so long hesitation and sideaway moving the Bulls managed to push the trend further. However we have a few signals here which again suggest a pause and a pull back is very likely.
Daily: Doji candle yesterday. Slow Stoch tuning down from overboght territory (swing sell signal).
Otherwise MACD, DMI and the full Ichimoku setup is still absolutely bullish. I don't say it can not turn down quickly, as anything has some kind of possibility, but for now there are not yet major signs that we should worry about.
4 Hrs: Heiken Ashi started to print in few red candles, with MACD crossing bearish. Slow Stoch is bit bearish and also ADX is too high, while DMI components not widenning further. Most of the times this signals minimum a pause in the trend.
Summary: All in all SP500 is still controlled by the Bulls, but short term it deserves a small correction with a possible pull back tgt ard 1883-1890. In case for some reason it gets any deeper, that could be a problem and make pressure on the bull market, as the major Key Support is up to 1855 by now. But don't worry, stocks can never fall!
By the way it really seems nothing, not any kind of risk can cause even a 10-15 % correction to equity markets, which could not even be called as a big one compared to the performances seen in last 2 years.. Investors confidence in asset price inflation and their faith in CBs is endless. There is a goldilock around, they buy everything! Stocks and bonds same time, core mkts, EM, EUR periferia, etc.
For me this means one thing: If greed doesn't let bull market to correct, then the break could and likely would happen only due to a Black Swan event. And these kind of breaks do not end up in a 10-15 % drop, but rather 25-40 %. Of course you can never get prepared for a Black Swan, it is kind of impossible to catch. You really can not setup a trade based on a black swan expectation. The only chance to be in that kind of selloff on the short side is when you play as a swing trader, and from time to time you have some bearish positions (shorts or Long Puts) which initially you put on to catch only the pullback.... like this one... and who knows, once in every 7-10 years you can get really lucky :-).
One more protection idea for those who are long equities. When VIX behaves like now, it worths to buy volatility. I mean this is extremely rare, that right after the front contract expiry/change the new contract rolls down so close to the spot VIX. So this time June VIX futures which expire 17/June, at current price 13,40-45 is really a gift for those who wanna buy protection.
Daily: Doji candle yesterday. Slow Stoch tuning down from overboght territory (swing sell signal).
Otherwise MACD, DMI and the full Ichimoku setup is still absolutely bullish. I don't say it can not turn down quickly, as anything has some kind of possibility, but for now there are not yet major signs that we should worry about.
4 Hrs: Heiken Ashi started to print in few red candles, with MACD crossing bearish. Slow Stoch is bit bearish and also ADX is too high, while DMI components not widenning further. Most of the times this signals minimum a pause in the trend.
Summary: All in all SP500 is still controlled by the Bulls, but short term it deserves a small correction with a possible pull back tgt ard 1883-1890. In case for some reason it gets any deeper, that could be a problem and make pressure on the bull market, as the major Key Support is up to 1855 by now. But don't worry, stocks can never fall!
By the way it really seems nothing, not any kind of risk can cause even a 10-15 % correction to equity markets, which could not even be called as a big one compared to the performances seen in last 2 years.. Investors confidence in asset price inflation and their faith in CBs is endless. There is a goldilock around, they buy everything! Stocks and bonds same time, core mkts, EM, EUR periferia, etc.
For me this means one thing: If greed doesn't let bull market to correct, then the break could and likely would happen only due to a Black Swan event. And these kind of breaks do not end up in a 10-15 % drop, but rather 25-40 %. Of course you can never get prepared for a Black Swan, it is kind of impossible to catch. You really can not setup a trade based on a black swan expectation. The only chance to be in that kind of selloff on the short side is when you play as a swing trader, and from time to time you have some bearish positions (shorts or Long Puts) which initially you put on to catch only the pullback.... like this one... and who knows, once in every 7-10 years you can get really lucky :-).
One more protection idea for those who are long equities. When VIX behaves like now, it worths to buy volatility. I mean this is extremely rare, that right after the front contract expiry/change the new contract rolls down so close to the spot VIX. So this time June VIX futures which expire 17/June, at current price 13,40-45 is really a gift for those who wanna buy protection.