The futures chart show us a reverse H&S in intraday time frame with a descending neckline (in the Nasdaq100 this line is perfectly horizontal) and completely failed the aproach of the right sholder.
Normaly, and it happened for several times in the oposite direction during the rally up, this kind of failure results in an extension of the pattern in the oposite direction.
I expect a target betwwen 1,618 and 2.0 fibo around 3200 in the index and a little lower in futures around 3175.
Here we might attend the first fight between bears and bulls with favorable forecast for bears. Second round should happen in 3000 where a strong reaction of the markets could take place.
And yes, I'm very pessimistic about equity markets in next years. The World economy is completely in idle mode and for each currency created a lot of the existing is being destroyed IMO.
We should expect the continuation of the bear market which should, under normal conditions, have happened in May or June.
I 100% agree. All your analysis is almost the same as mine, word for word. Thanks for sharing.
I picked up on the H&S the other day also. It was very clear when you include the afterhours trading (I use the SPX500USD also). I was very surprised that it failed. I really expected a retest of the ATH given how high the FOMO was. My analysis of past rallies and corrections show that the correction hits a minimum correction of 0.618 of the rally (0.0 March low and 1.0 ATH). That takes us right down to the 3000-3100 level, which is June levels. This is where the market should have stayed, like you pointed out. I am very curious what is going to happen when we hit that level. Will all of the traders who sat out this rally see this as there big chance to get in and we see an even more massive FOMO rally, or does the drop scare the bulls away and we go much lower.
I picked up on the H&S the other day also. It was very clear when you include the afterhours trading (I use the SPX500USD also). I was very surprised that it failed. I really expected a retest of the ATH given how high the FOMO was. My analysis of past rallies and corrections show that the correction hits a minimum correction of 0.618 of the rally (0.0 March low and 1.0 ATH). That takes us right down to the 3000-3100 level, which is June levels. This is where the market should have stayed, like you pointed out. I am very curious what is going to happen when we hit that level. Will all of the traders who sat out this rally see this as there big chance to get in and we see an even more massive FOMO rally, or does the drop scare the bulls away and we go much lower.