RespectRiskManagement
Short

It's Time To Predict the Stock Market Crash

AMEX:SPY   SPDR S&P 500 ETF
581 1 7
MACD crossed to the downside back in December of 2014, and has been in a downtrend ever since (additionally, the MACD height reached a double top from the year 2000; the year of the dot-com bubble burst and stock market crash). However, price has not matched this movement, and has instead remained flat or even rose -- to me, this divergence indicates a change in trend is about to occur in the SPY             , and I see the MACD signal line creating a kink and decreasing to the zero line at the very least.

Around August of 2015, the SPY             lost its 8 month and 20 month Moving Average supports that it had held on to for the entire leg up. Vertices were placed on their respective parabolas, indicating the shift in trend from Bullish SPY             to Bearish SPY             (according to my vertex hypothesis, before major trend changes, vertices on parabolas occur, beginning with the 8 and 20, and then price is reduced as the MA's are pulled down -- in contrast to earlier periods of time in which the MA's rebalanced higher, one can clearly see the slope of the lines vary greatly from the past, showing clear parallels from the stock market crashes of 2000 and 2008). This information can be considered the end of the bull market for the SPY             . It had only lost the 8 month MA temporarily around October of 2014, but found support at the 20 month MA, before the uptrend resumed. That said, after bouncing off the Sling Shot System's upper Slow MA boundary, it seems -- to me, in my own personal opinion -- that the SPY             is making Market Maker stops runs across its monthly MA's as a re-test before further significant downside.

The highs in the SPY             are already in, and the fact that the media keeps pumping bullish SPY             articles leads me to believe that we're close to a market meltdown as stops are triggered, trigger more stops, etc., for prices below $170 by end of year. Furthermore, with all-time complacency in the market, the financial environment is set up to catch everyone with their pants down as the SPY             sheds >25% in the coming months. Even the 50 month MA is down at $170, with the 200 MA down at $132.67 -- effectively, the 200 will be a magnet for the SPY's collapse. We could see, for example, prices decline over 25% by the end of November and December 2015. Prepare for October's monthly candlestick formation to end closer to an inverse hammer, giving the momentum required for next month's financial market collapse, that will have continuity into December.

Right now, we're witnessing many 'good' Earnings' Reports that are propping the markets up from the (in my opinion, smart money liquidation) flash crash down to $180 during August of 2015. Indeed, everyone is so bullish despite the fact that the subtle hints exist -- the SPY             making lower highs (testing its broken down trend line at $208 and failing), the SPY             having been triggered setting off a massive panic mode in the market that showed big money liquidating large volume , and that this most recent run from $190 to $208 is off of ANEMIC volume --, because, for example, tech companies like Google             are beating purposely lowered expectations, etc. The attitude in the market is that the sky is the limit, and this earnings season solidifies the bull run. Most of us know, however, that the market is very contrarian sometimes when it comes to news -- people who watch earnings know, that, for example, a stock can crash on a great earnings report, just like it can gap up on terrible earnings, due to the "forward thinking" nature of the market. In a similar way, perhaps the lofty valuations of the market is finally being realized in this apex season. The culling of profit, and the profit release of billions, will occur, and in my opinion, the day is coming far sooner than most realize.

As a result, I have personally purchased several hundred Spy             Put options with a strike price of $175, due for expiry in December. We all know the old aphorism that stocks can be an "elevator down". I'm betting it's going to look just like that, be
Trance-Man
a year ago
Hmm nice writeup, agree with alot of what you are saying, let's see how it goes.
Reply
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