As We Await Remarks From The Fed — The S&P 500! (SPY)
Hi friends! I know that today's candle isn't complete, but you can't deny what it currently looks like. Right now, it looks like a bear flag building just below the head and shoulders that SPY recently broke down from. And look, it projects a fall exactly to major support, at $240.32. Funny how those things work. I know I'm getting ahead of myself, because the market could rally if Fed Chair Powell's comments are dovish today. Just showing what I currently see developing on the chart. If a breakout above the (potential) bear flag happens, I wouldn't get too excited. Price would then have to contend with resistance at the neckline of the head and shoulders pattern, followed by the center-line of the channel, followed b y a rapidly falling 50 MA (in orange) and then the 200 EMA (in purple.) In my opinion, the top is in. At best, we could see one final push higher.
From a fundamental standpoint, EPS growth has capped off, geopolitical issues are weighing on the global economy, the trade war is causing problems, particularly in CHEYENA (Trump voice,) corporations are over leveraged to debt, the auto industry is in a subprime bubble, housing starts are falling because the consumer can't handle new mortgage rates, with these tiny 0.25% increases, and yeah, the market is extremely fragile right now. When we see this much volatility, and dire focus on 0.25% interest rate hikes, when rates are still at historic lows, we have a major problem. So, in my humble opinion, I believe there is a high probability that we are entering a new bear market — one that could be quite nasty.
For an explanation on where I think this (proposed) bear market could fall to, feel free to review my recent analysis below.
Happy Holidays Everyone!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
From a fundamental standpoint, EPS growth has capped off, geopolitical issues are weighing on the global economy, the trade war is causing problems, particularly in CHEYENA (Trump voice,) corporations are over leveraged to debt, the auto industry is in a subprime bubble, housing starts are falling because the consumer can't handle new mortgage rates, with these tiny 0.25% increases, and yeah, the market is extremely fragile right now. When we see this much volatility, and dire focus on 0.25% interest rate hikes, when rates are still at historic lows, we have a major problem. So, in my humble opinion, I believe there is a high probability that we are entering a new bear market — one that could be quite nasty.
For an explanation on where I think this (proposed) bear market could fall to, feel free to review my recent analysis below.
Happy Holidays Everyone!
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Comment:
Comment:
Meant to say 200 MA* not EMA
Comment:
Update, the Fed has raised rates, and projected two more increases in 2019. Fed Chair Powell has expressed optimism for the economic outlook in 2019, and he stated that the recent volatility has not effected Fed policy decision making. Essentially, he suggested that the Fed would continue to hike until the market can't take it anymore. However, recent rate hikes have caused immediate volatility in equity markets, signaling that the market can't take any more hikes. As a result, the bear flag broke down, and stocks are selling off. The Dow was up 350 points, but is now down over 500 points, in a nearly 1000 point swing on the session.
www.cnbc.com/2018/12...conference-live.html
www.cnbc.com/2018/12...conference-live.html
Comment:
Didn't mean to post the CNBC link. Here is the chart...