Hi friends! Welcome to this update analysis on the S&P 500, via the SPY ETF! Let's get right to it! Looking at the daily chart, you can see that the bears have delt a critical blow to this market, closing below the black uptrend channel, and the 200 EMA (in purple.) If you recall from my last post, I said "based on the technical indications, I think there is a higher probability that the market will break down from here, bringing a long overdue correction to the stock market. I realize that this is a bold statement, considering the power and incredible duration of this uptrend channel, which we are still inside of. However, the technical data suggests that a breakdown is likely upon us."
And just like that, the very next session produces the first breakdown close below the channel. Unbelievable! Technical analysis is the greatest tool of investing, by far! This channel originated in February of 2016. To be able to pinpoint the time that it would break down, is an extremely valuable gift indeed.
Now that we've closed below the 200 EMA (in purple) and the bottom of the uptrend channel, the path is clear for some major destruction to occur. As I said in my last post, I believe that we are in the process of creating a new downtrend channel (in pink.) With that said, the selling should continue, but may find support at the bottom of the pink channel. The general target area is around 240.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! I'm outta here!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
@D4rkEnergY, I like the fact you're trying to remain friendly and humble with what must seem like your competition. Something seriously lacking around here lately. I tip my cap to you Sir. Very sporting of you! :)
Lezz
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Lol..
So your bearish, inverted, kickflipped, oh-so-accurate, everything's a head and shoulders pattern, call on crypto fails and you switch to stocks..
And don't bother dropping all the times where you were right..
I don't care..
This was not written with the intent to trigger your "nobody gives head and shoulders like I do.." routine..
Whatever..
ElanGibb
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@Lezz, Markets topping out so you see HS patterns everywhere. Crypto and SPY. Check out his comparison of SPY vs. BTC and you will see that there is some evidence of a correlation between the two markets to some extent.
Lezz
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@ElanGibb, I know this much.. They also move in sync and when something large needs to happen, crypto moves sideways for entire weekends like the one that's just passed until forex reopens..
frogstomper
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@Lezz, so why bother wasting your time posting here. Do you honestly think anybody cares what you think of Magic’s TA ?
MagicPoopCannon
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@Lezz, I've traded stocks and options for longer than crypto has existed. To this day, equity markets are where the majority of my investments are. Its so funny that you're saying my downside calls have failed. The market is just consolidating now. Its been like one day since I made those calls. Come see me in a couple weeks. You'll be asking for an autographed copy of my chart, so you can frame it up on the wall.
-Magic-
Lezz
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@MagicPoopCannon, So let me get this straight once and for all..
Is crypto bearish or bullish in your not so humble opinion?
Pick a side..
TheCryptobaught
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@Lezz, Read his posts, learn to adapt. If you aren't bearish on crypto after the last 3 months then you are crazy. Wait for reconfirmation and buy back in if you aren't already holding bags.