In this video I talk about the SPX500 and the potential short opportunities based on the different scenarios we could get from the market.
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So we finally got to the best area. Hit R3 in just one day after opening a gap which opened right in a an area where there was another gap before (2 yellow zones).
Hitting the yearly R1 would be ideal. Get properly overbought, take all the stops that lie in that area, hit the 2821 last resistance on SPX500 (FXCM) and then go lower. In my opinion if the price goes above 2830, I'd be looking for 2860 for the last short.
That's the place where the Bitcoin and SPX bubble would look a lot alike, forming awesome bull traps. At the same time it would be ideal to see the break down area retested and even have that gap filled. Personally I don't believe we'd go above 2900 and if we do then there is no short trade.
So shorting at 2810 with a 2830 stop & 2860 with a stop right above 2900 would be the best shorts at this time. Holding a short from 2810 up to 2900 is also possible, but not optimal.
So we finally got to the best area. Hit R3 in just one day after opening a gap which opened right in a an area where there was another gap before (2 yellow zones).
Hitting the yearly R1 would be ideal. Get properly overbought, take all the stops that lie in that area, hit the 2821 last resistance on SPX500 (FXCM) and then go lower. In my opinion if the price goes above 2830, I'd be looking for 2860 for the last short.
That's the place where the Bitcoin and SPX bubble would look a lot alike, forming awesome bull traps. At the same time it would be ideal to see the break down area retested and even have that gap filled. Personally I don't believe we'd go above 2900 and if we do then there is no short trade.
So shorting at 2810 with a 2830 stop & 2860 with a stop right above 2900 would be the best shorts at this time. Holding a short from 2810 up to 2900 is also possible, but not optimal.
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Final update with a comparison of the BTCUSD and SPX bubble.
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Big picture SPX
Last week we hit R3 right on the open, while gaping up for the second day in a row without closing the previous gap. All that while we hit the top of the channel, along with the SPX500 (e-mini / FXCM chart) where there was a resistance level right at 2814
What I'd like to see is a break above the 2814-2820 resistance to hit the Yearly R1 pivot while taking out all the stops.
Like with my idea the previous week where I explained why 2810 was great for shorts and 2830 to place your stop, now after dumping twice from 2814-2820 I am pretty confident that the R1 pivot will not hold for very long. The best place to short right now is at 2860
The channel is still going, yet momentum and volume are clearly diverging. In my honest opinion this is probably the last push up. Trap everyone and then go lower.
Below we have two magnets: Double gap and VP PoC at the same place (2720-2730)
Above we have 4 magnets: R1 Yearly, Resistance that is weaker after 3-5 touches, breakdown without retesting the broken support (no S/R flip test) and a big gap. All that along with the Bitcoin fractal whose topping process looks pretty similar.
Last week we hit R3 right on the open, while gaping up for the second day in a row without closing the previous gap. All that while we hit the top of the channel, along with the SPX500 (e-mini / FXCM chart) where there was a resistance level right at 2814
What I'd like to see is a break above the 2814-2820 resistance to hit the Yearly R1 pivot while taking out all the stops.
Like with my idea the previous week where I explained why 2810 was great for shorts and 2830 to place your stop, now after dumping twice from 2814-2820 I am pretty confident that the R1 pivot will not hold for very long. The best place to short right now is at 2860
The channel is still going, yet momentum and volume are clearly diverging. In my honest opinion this is probably the last push up. Trap everyone and then go lower.
Below we have two magnets: Double gap and VP PoC at the same place (2720-2730)
Above we have 4 magnets: R1 Yearly, Resistance that is weaker after 3-5 touches, breakdown without retesting the broken support (no S/R flip test) and a big gap. All that along with the Bitcoin fractal whose topping process looks pretty similar.
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Hello everybody!
Updating this as things got really hot with the SPX. Lots to talk about!
The SPX completed a perfect Head and Shoulders pattern and got straight into the 2720-2730 zone I talked about.
Unfortunately I closed my short early and then didn't pay attention to the market while I waited for higher prices. Got too focused on crypto and not without a good reason.
The market gave many opportunities, even late to short and long! Once the Weekly R3 and monthly P along with the Neckline broke, people could had shorted there or on the retest. The trendline break was the first big indication.
The VP PoC (Volume profile, Point of Control) along with the double gap where a very very clean entry and target. On the SPX500 the price reached 2720 closing the gap, but the actual SPX didn't close it, giving shorters a second chance once the price reaches 2860.
However things have changed a lot. Like i expected, we have broken 2820, touched the Yearly R1 pivot and are sitting there. My guess is that we will go higher first. Too many touches for this to stop here. So best short for now is 2860 to 2825 and even maybe 2725.
So what do we do now?
First is we are at a great place to short in case this is a trap with a really tight stop. The price rallied and left way too many gaps without testing any areas, while it has fallen back below the yearly R1. So stop at 2832 and target 2744 -Medium to Low probability, very high reward.
If we break above 2832 then flip long with a target at 2860 and stop below 2803 (below the swing low). This one is medium to high probability but really low reward.
Finally shorting 2860 to 2825 with a stop at 2895 is one that is very high probability but really low reward.
Final observation is that the same way double gaps act as magnets and Support/Resistance, when two Pivots P (central pivots) are at the same place they act like a magnet that usually doesn't act like Support or Resistance, so it breaks and usually in a violent way.
As for why this happens, I really don't know... and I wanna know why. This, along with the gap in a gap pattern are two things I want to find out more about, as there must be a clear explanation. I have some things in mind but not well structured.
Updating this as things got really hot with the SPX. Lots to talk about!
The SPX completed a perfect Head and Shoulders pattern and got straight into the 2720-2730 zone I talked about.
Unfortunately I closed my short early and then didn't pay attention to the market while I waited for higher prices. Got too focused on crypto and not without a good reason.
The market gave many opportunities, even late to short and long! Once the Weekly R3 and monthly P along with the Neckline broke, people could had shorted there or on the retest. The trendline break was the first big indication.
The VP PoC (Volume profile, Point of Control) along with the double gap where a very very clean entry and target. On the SPX500 the price reached 2720 closing the gap, but the actual SPX didn't close it, giving shorters a second chance once the price reaches 2860.
However things have changed a lot. Like i expected, we have broken 2820, touched the Yearly R1 pivot and are sitting there. My guess is that we will go higher first. Too many touches for this to stop here. So best short for now is 2860 to 2825 and even maybe 2725.
So what do we do now?
First is we are at a great place to short in case this is a trap with a really tight stop. The price rallied and left way too many gaps without testing any areas, while it has fallen back below the yearly R1. So stop at 2832 and target 2744 -Medium to Low probability, very high reward.
If we break above 2832 then flip long with a target at 2860 and stop below 2803 (below the swing low). This one is medium to high probability but really low reward.
Finally shorting 2860 to 2825 with a stop at 2895 is one that is very high probability but really low reward.
Final observation is that the same way double gaps act as magnets and Support/Resistance, when two Pivots P (central pivots) are at the same place they act like a magnet that usually doesn't act like Support or Resistance, so it breaks and usually in a violent way.
As for why this happens, I really don't know... and I wanna know why. This, along with the gap in a gap pattern are two things I want to find out more about, as there must be a clear explanation. I have some things in mind but not well structured.
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So from the two trades, the high R/R trade was a loser and the high P trade was a winner. That's why you put more money on the ones that are more probable (Personal preference). The other one (breakout one was a winner) even though it took some time and a lot of volatility.
Right now I am officially short the SPX. Now that there are no more rate hikes like everyone expected, I expect downside. Not only because it was like: buy the rumours sell the news, but because it shows that the US economy is slowly heading into a recession and the FED is the market's bitch. For this one I will actually have no target, just a stop loss. Wherever it takes me :)
Right now I am officially short the SPX. Now that there are no more rate hikes like everyone expected, I expect downside. Not only because it was like: buy the rumours sell the news, but because it shows that the US economy is slowly heading into a recession and the FED is the market's bitch. For this one I will actually have no target, just a stop loss. Wherever it takes me :)
Optimal entries for shorts are at: 2820 and 2860
Getting in at 2778 would only be viable for me with a stop at 2830 and a target at 2722. A 1:1 trade, that currently has a 50-60% chance of success, which isn't that attractive.
Lots of resistance above us, the trend is weakening, but we are still going counter trend. From here we are 6% off the ATH, which means I'd much rather be flat and wait to see if and how we get above it, and then I might go long if the conditions are favourable.
Based on the current data we could have another 2-6 weeks of upside (by looking at the RSi and the Tom Demark Sequential), so plan accordingly.