So far my thesis is proving sort of correct, but not as correct as I want it to be.
My thesis was that, while there is some bullishness impending and I was somewhat expecting (albeit not putting my money on it) to see 378 /379. BUT before we got any sizeable technical bounce (above 379) SPY should see 350s.
This thesis was based on a probability assessment and on time series modelling.
SPY saw 350s today but it was a massive let down. The first bear target on the weekly range was 358 ish. I wanted to see that. We were SOOO close (359). But alas, it didn't quite come. My target was 358 but we got close enough to it that I am very happy. Especially when everyone on tradingview suddenly converted to super bullish this week for some reason.
So let's go over some things very quickly:
My positions:
I am out of everything.
I was in SPXS, I held TZA for a little while as well and I recently added TSLA short.
Between the last 3 days I am now completely out of all shorts.
Just if people want to know.
Where are we now:
SPY is the only stock that I am actively tracking that has failed to touch either its mathematical weekly high targets or its mathematical weekly low targets. Actually.. I think not true, QQQ also is in the same boat? Maybe? Let me check...
Yeah, its true:
Okay, so SPY and QQQ are being annoying.
There is a lot of buying pressure I have noticed and its created this low, tight kite type pattern that you can see in the main chart above. But let us zoom in to show you what I am seeing:
It is coiling very tightly and almost resembles a megaphone esc pattern. We get some more clarity when we look at Heikin Ashi:
These are all fairly bearish signs. HOWEVER! There is a lot of annoying buying pressure going on. Market makers, institutions, etc. They are putting on that buying pressure.
If we look at the averaged out EMA buy and sell volume, we see there has been some impending bullish divergence in the buying and recently some bearish divergence in the selling volume:
So what's next?
Maybe more selling.
We have PCE released tomorrow. IT seems very odd that we are SOOOO close to that 358 math target and SPY is just refusing to go there. Can SPY avoid all weekly targets this week? Of course! Its rare but it happens.
That said, I do see us pretty close to a technical bounce. Like dangerously close to a technical bounce. Which is why I am not actively shorting anything right now.
My ideal area to go long as kind of a swing is 358. The concern is, a lot of technical traders have pointed out that a break below or in this area would signify capitulation and would lead to massive tankage.
I don't know about that personally. I think if SPY hits the upper 350 range its going to be whatever. 350 is within the time series projections. Its within the probability assessments. Its really not a big deal. But I do think psychologically, seeing SPY in the 350s would trigger a lot of buying. We already see a lot of reflexive buying now which I believe is why we are seeing this positive bullish divergence in the buying volume. The thinking by many is we are oversold and we are in an area of support, have a double bottom, etc. etc. so there is just a lot of, I call it "Reflexive buying". Because its very simplistic, basic thinking that plays into the adage of "buy low, sell high".
SPY is low. I buy SPY, it go up and I sell for profit.
That is the major thinking right now. I see it in people's ideas and I see it in the volume profiles coming into SPY. SO I think that is where this buying pressure is coming from, because institutions, retail, etc. they are all doing the same thing. And that is why I think, should SPY actually come back down to the 350s, it will lead to a technical bounce. Not to mention we are a bit oversold.
Can we go lower than 358 before a bounce?
Yes. The math targets are in the chart above and I have discussed them ad nauseum in previous posts.
Deciding factor:
Will likely be PCE and tomorrow. If PCE triggers massive selling again and breaks us back down into the 350s, it will be excellent and I would likely get long.
Alternatively, we may begin our technical bounce tomorrow. Which is fine. SPY saw the 350s and I am calling this a win regardless. I just won't get my ideal entry.
Worst Case Scenario:
SPY tanks into the 340s. SPY dropping to the 340s in the next week would actually be taking SPY outside of the time series timelines and be really bad news. That would be true capitulation in my opinion and I would need to rework some data to see WTF is up.
My thoughts. Per ush, leave your comments/questions and critiques below!
My thesis was that, while there is some bullishness impending and I was somewhat expecting (albeit not putting my money on it) to see 378 /379. BUT before we got any sizeable technical bounce (above 379) SPY should see 350s.
This thesis was based on a probability assessment and on time series modelling.
SPY saw 350s today but it was a massive let down. The first bear target on the weekly range was 358 ish. I wanted to see that. We were SOOO close (359). But alas, it didn't quite come. My target was 358 but we got close enough to it that I am very happy. Especially when everyone on tradingview suddenly converted to super bullish this week for some reason.
So let's go over some things very quickly:
My positions:
I am out of everything.
I was in SPXS, I held TZA for a little while as well and I recently added TSLA short.
Between the last 3 days I am now completely out of all shorts.
Just if people want to know.
Where are we now:
SPY is the only stock that I am actively tracking that has failed to touch either its mathematical weekly high targets or its mathematical weekly low targets. Actually.. I think not true, QQQ also is in the same boat? Maybe? Let me check...
Yeah, its true:
Okay, so SPY and QQQ are being annoying.
There is a lot of buying pressure I have noticed and its created this low, tight kite type pattern that you can see in the main chart above. But let us zoom in to show you what I am seeing:
It is coiling very tightly and almost resembles a megaphone esc pattern. We get some more clarity when we look at Heikin Ashi:
These are all fairly bearish signs. HOWEVER! There is a lot of annoying buying pressure going on. Market makers, institutions, etc. They are putting on that buying pressure.
If we look at the averaged out EMA buy and sell volume, we see there has been some impending bullish divergence in the buying and recently some bearish divergence in the selling volume:
So what's next?
Maybe more selling.
We have PCE released tomorrow. IT seems very odd that we are SOOOO close to that 358 math target and SPY is just refusing to go there. Can SPY avoid all weekly targets this week? Of course! Its rare but it happens.
That said, I do see us pretty close to a technical bounce. Like dangerously close to a technical bounce. Which is why I am not actively shorting anything right now.
My ideal area to go long as kind of a swing is 358. The concern is, a lot of technical traders have pointed out that a break below or in this area would signify capitulation and would lead to massive tankage.
I don't know about that personally. I think if SPY hits the upper 350 range its going to be whatever. 350 is within the time series projections. Its within the probability assessments. Its really not a big deal. But I do think psychologically, seeing SPY in the 350s would trigger a lot of buying. We already see a lot of reflexive buying now which I believe is why we are seeing this positive bullish divergence in the buying volume. The thinking by many is we are oversold and we are in an area of support, have a double bottom, etc. etc. so there is just a lot of, I call it "Reflexive buying". Because its very simplistic, basic thinking that plays into the adage of "buy low, sell high".
SPY is low. I buy SPY, it go up and I sell for profit.
That is the major thinking right now. I see it in people's ideas and I see it in the volume profiles coming into SPY. SO I think that is where this buying pressure is coming from, because institutions, retail, etc. they are all doing the same thing. And that is why I think, should SPY actually come back down to the 350s, it will lead to a technical bounce. Not to mention we are a bit oversold.
Can we go lower than 358 before a bounce?
Yes. The math targets are in the chart above and I have discussed them ad nauseum in previous posts.
Deciding factor:
Will likely be PCE and tomorrow. If PCE triggers massive selling again and breaks us back down into the 350s, it will be excellent and I would likely get long.
Alternatively, we may begin our technical bounce tomorrow. Which is fine. SPY saw the 350s and I am calling this a win regardless. I just won't get my ideal entry.
Worst Case Scenario:
SPY tanks into the 340s. SPY dropping to the 340s in the next week would actually be taking SPY outside of the time series timelines and be really bad news. That would be true capitulation in my opinion and I would need to rework some data to see WTF is up.
My thoughts. Per ush, leave your comments/questions and critiques below!
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We got my TP. Actually one point lower, 357!
WOO!