Daily chart shows RSI turned down crossing trendline. Fisher Transform flipped bearish. Filter Dots confirm bearish downtrend has stared. In my opinion, this correction should last at least a week up to one month (Christmas). Possibly greater correction if determined in December.
I will update a 30Min Chart for Part 2 of 2.
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Spot on fellas - I appreciate your observations.
The BB / 48.5 EMA appears to support your postulation.
Agree the double top around all time high (<10 days) - after another 1 or 2 days down to go. I'd give 70% confidence on this and 90% on execution to a min 3040 pullback with excellent potential for a move down to approx 2950 (80% confidence) by Christmas.
It would take sign-off on a US/China trade deal (yes, actual ink on paper) to change this analysis - further media gossip/official chat or NR's won't even delay this overdue pull back (the market is jaded).
Buying should recommence once the sp approaches the 200 SMA support ie perceived to be oversold - that's when I'll be hitting buy, unless there's further reason to sit.
MoneyPatterns
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@Chillam, Actually I didn't consider that as a double top, so thank you back. LOL.
Good eyes. CNBC said a few days ago that 70% or so of the SP500 was at ATH.
To me this means there is a broad correction (5-10%) coming.
If we get more because of China, a simple $250 put on SPY can pay big.
So far the three I bought puts on are all in the green.
I really appreciate your positive comment and analysis.
Chillam
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@jbird7839, I'm in Aus (Oz) and don't have access to the US market so can't short
DSB picked up on the potential double top, not me - we'll see.
But it looks like the strongest scenario, especially at this time of the sequence. It all depend if SP holds/bounces from the 13 EMA, if so then a double top should form and a deeper pull back will eventuate. However, if the 13 EMA doesn't hold then we would most likely see a straight drop to the bottom BB/50 EMA intersect around 3020, or just below, and then a bounce back into Christmas ATH's.
DaddySawbucks
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I'm afraid it will simply bull on BTFD FOMO. RUT and DJT are Green and the selling is modest. Of course it can tank anytime but R/R is lousy again. I closed out.
MoneyPatterns
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@DaddySawbucks, Yes, there is some option pricing "creativeness" going on today. Shows me they are squeezing people out.
RSI was at 75 for 6 days before this turn. All other indicators point to further down movement.
This is a shakeout, or stall tactic, to keep complacency in the market.
By 12/1 we go down more severely as monthly options expire and we get closer to Xmas.
Hong Kong protesters backed by US Senate will not help trade talks.
No China deal and we see a correction. I give this probability 70%+ with this Senate backing.
President Xi (communist) does not get told, he does the telling.
I don't know how much FOMO is left here. Either John Doe is going to take profits, or the brokers will.
DaddySawbucks
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@jbird7839, IMO will form a double top - two bumps at 3124 before rollover. Getting higher lows now. Will close the gap IMO.
DaddySawbucks
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@jbird7839, That being said, I rolled my Dec VIX calls into Aprils. Sometime in six months the bastards will sell it!
The BB / 48.5 EMA appears to support your postulation.
Agree the double top around all time high (<10 days) - after another 1 or 2 days down to go. I'd give 70% confidence on this and 90% on execution to a min 3040 pullback with excellent potential for a move down to approx 2950 (80% confidence) by Christmas.
It would take sign-off on a US/China trade deal (yes, actual ink on paper) to change this analysis - further media gossip/official chat or NR's won't even delay this overdue pull back (the market is jaded).
Buying should recommence once the sp approaches the 200 SMA support ie perceived to be oversold - that's when I'll be hitting buy, unless there's further reason to sit.