SPY- The Most Important Week in a Decade
Bounce Complete, now lets Peg the top too.
I have decided to go with the pitchfork type drawing today to show that at the end of everything for a year and a half we have been oscillating around this ascending channel if you will. This channel is not a pattern of itself but it is following a bullish breakout that rose almost 100% in price over 6 years. Now, for a year and a half, a potential top is being put in on that breakout. This top almost broke down once before but got supported and so we are staying within our ascending consolidation. Ascending typically break down. The Odds are in our favor. We also have a three drive MONTHLY bearish divergence ... Just wow.
Make no mistake about it ... We are in deciding factor crucial moments right now. This is the bulls chance to take this to the finish line and power through the extreme barriers that lie above price. If they fail, to impulse out of this ascending pattern and hold above it then nature will most likely take its course. Unfortunately, the course of nature is to summon a cyclone of man-eating bears fueled by a perfect storm of external factors. And much like the Tasmanian devil this storm will rip down and up the chart whipping leveraged positions in and out of margin and thoroughly confusing bulls and bears alike.
The recent bounce that we received in the SPY will likely be the last significant bounce in a while as our chart shows that our bottom support in this ascending pitchfork channel could be tested very soon, just as fast as it went up to it very well could crash down. This would show us that market behavior is still erratic and volatile, just as it does when in a bear market.
On the Smaller time frames, we have a very aggresively slopped Ascending Wedge from this past week's impulsive buying. Though it was impulsive, that chart has shown us in the past that this type of volatile price action acts more as a consolidation to recharge its batteries and start impulsing big moves, like our plunge to Christmas. I anticipate a waterfall sell-off that simply burns a hole through the chart, as opposed to 'Melting Up' I think we have already topped. Today's price action made that pretty evident to me as we gapped up once again but dropped down fading not only the gap but yesterdays gap up as well. Thats impressive. Most probable IMO? To go down VERY SOON, and don't stop until it hits the 275 lows.
If the bearish scenario does take place please consider that this will affect many things in day to day life. I think that It would be wise to be prepared for life in America in another "recession" Living in the midwest, factories get hit hard and I know that my hometown will suffer mass layoffs once again. Oh, yeah and if companies have to downsize because of economic uncertainty this will affect the subsequent interest rate hikes based on their "formula and data."
Please take a moment to look at the most important trendline that can so so easily be overlooked, because it doesn't come out looking nice on a chart : (... the discrimination. With long term trendlines it's hard to know if you have them lined up perfectly or not, but I do like the confluence of this placement (Higher TF of 10 yr support below) If we drop much more in price from here then we will be in danger of living below that historic trendline and that will be the easy way of deciding if we are in a bull or bear market.. Under or above that 10-year support.
Ladies and Gentlemen: We are at THE precipice right now, what happens in this next week of trading could determine the next 10 years of the Global Economic Condition.
Please be protected, please be patient
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Every day that this type of weak bullish/ distributive behavior further confirms to me that this breakdown is soon approaching.. Keeping my eye on the potential pennant, and watching futures closely as this breakdown could happen in the night, resulting in a gap down.
Every day that this type of weak bullish/ distributive behavior further confirms to me that this breakdown is soon approaching.. Keeping my eye on the potential pennant, and watching futures closely as this breakdown could happen in the night, resulting in a gap down.
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Price doesn't have to fill this pennant 90% full before breaking down support.
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Futures
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We look to be all set for a test of the lower support in white through the morning session today
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Today will Most Likely be the day we break support and start to drop, like a bomb. making it all the way back to 273 in 72hrs!?
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Nice Pump buying in the aftermarket. This will surely li cause some squeezing. We see volume declining as people nervously hinge on every second that slowly ticks by until the Fed imparts is sublime wisdom so us Wednesday. Is this squeeze in the futures clearing a path for the real bears to get into these fresh positions or is it real organic buying? I suppose one's answer depends on your disposition on this overall market. I am anticipating down Thursday or before.
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Watch for the lows of the purple for trade entry or at resistance, as we are currently.
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Also, there is a slight possibility that we might get some more upside before the meeting Wednesday in anxious anticipation. IF we were to get there I would't call that price action very organic... Remember buy the hype... sell the news.
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The alternate scenario played out, now we have divergence amongs the peaks of this ascending pattern. This pattern is is streanously pushing higher awaiting the fed announcement tomorrow. I would call this Baked in the Cake. whatever fed announcement could happen tomorrow, This type of price action at these levels is screaming "sell the news" we will see tomorrow. We should sell off from here. breaking of the lower support of this pattern will be the trade plan
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Mico Chart looking for a top
Mico Chart looking for a top
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Now we have 30-minute Bearish divergence on an already mature (enough) pattern. Ascending Channel usually breaks down and can cause reversals easily enough. Now that we have the bearish divergence which is a wonderful confirmation. I would consider this pattern ready to start breaking important supports finally.
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Zoomed In we see that now only are we in a larger bearish pattern, but in the manner in which we are approaching resistance is not acting so impulsively, but more in a corrective fashion. We see that this pattern is an ascending wedge which i expect for this to reject and sell from here most likely being the top.
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Note the Volume Decline
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Aftermarket pump has been sold into hard as we rest on the previous ATH. Its very important in these next weeks to see if we are living above or below the cluster of tops in the SPY over the past 2 years. So far with this kind of selling its saying weakness, and people want out, distribution. I would not be surprised if we continue selling more today and start breaking important ATH Supports.
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On attempt to break ATH's so far we are rejecting. The last two days have been a change in behavior as we have seen distribution in the open market.
This pattern is overall an ascending wedge /channel and ascending patterns typically break down. I say typically because that's technical trading 101, but if the market would decide that there would be no bear market, no crash, but instead continuation after this 2 years of very volatile consolidation. We would need to impulse out of this area like a rocket ship and put 295 in the rear view mirror and then hold above that level for a few months. IF that were to happen, I would be completely out of this market on a bearish position and would be starting to establish swing bullish positions, with less weight to them as I would still be a little suspect.
This pattern is looking pretty mature to me, I expect to see down impulses coming in soon.
This pattern is overall an ascending wedge /channel and ascending patterns typically break down. I say typically because that's technical trading 101, but if the market would decide that there would be no bear market, no crash, but instead continuation after this 2 years of very volatile consolidation. We would need to impulse out of this area like a rocket ship and put 295 in the rear view mirror and then hold above that level for a few months. IF that were to happen, I would be completely out of this market on a bearish position and would be starting to establish swing bullish positions, with less weight to them as I would still be a little suspect.
This pattern is looking pretty mature to me, I expect to see down impulses coming in soon.
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We have broken down out of the Red Pennant. Not only that But we have re-entered the primary ascending channel pattern. That means that whatever bull impulse, has potentially already failed, and now we are back within bearish control. Falling back within a channel after breaking out of it is akin to a bull trap, or a gap and fade. They both are situations where bulls have the total chart set up and were expected to carry price higher, and they failed so far. Then after that, just like in a turn-based game, we will soon get the bears time to show their strength. This next week will be the bears turn to speak; observing the impulsiveness of the selling during this week should give us a good idea of which market cycle the SPY will choose at these very critical levels. If price were to get above 295 and stay there for over a month, then I will look to close my bear position and wait longer, for more data before going long. Until that happens I am going to remain bearish.
We have broken down out of the Red Pennant. Not only that But we have re-entered the primary ascending channel pattern. That means that whatever bull impulse, has potentially already failed, and now we are back within bearish control. Falling back within a channel after breaking out of it is akin to a bull trap, or a gap and fade. They both are situations where bulls have the total chart set up and were expected to carry price higher, and they failed so far. Then after that, just like in a turn-based game, we will soon get the bears time to show their strength. This next week will be the bears turn to speak; observing the impulsiveness of the selling during this week should give us a good idea of which market cycle the SPY will choose at these very critical levels. If price were to get above 295 and stay there for over a month, then I will look to close my bear position and wait longer, for more data before going long. Until that happens I am going to remain bearish.
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Large TF. 2 Years of Consolidation --- Here are where the tops come in, we are below the upper red resistance and resting on the lower resistance, breaking below this red line would be considered another bull trap.
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Correction, we are actually living below this red line, as it's drawn, this makes the bearish case slightly better.
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This breakdown could be very very soon, possibly within last 3 hours.
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Looks to be the start of the impulsive selling we will see.
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We May touch 295 one last time before selling off begins.
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Waiting for horizontal support to break
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We had backtested the breakdown of the wedge pattern in blue, and have sold off impulsively so far. We are now just below a Point of Control type line for this consolidation. I expect that we make our way down to the red box territory to prepare for a possible break of this flag. We can get there slowly or quickly, makes no difference.
We had backtested the breakdown of the wedge pattern in blue, and have sold off impulsively so far. We are now just below a Point of Control type line for this consolidation. I expect that we make our way down to the red box territory to prepare for a possible break of this flag. We can get there slowly or quickly, makes no difference.
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zoomed in, Notice the Declining Volume. We are ready for a breakup or down. IF up, very very limited upside potential. Down, is preferred as that was the direction we came from.
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Breaking on the SPY chart
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Below pattern. IF we do not get within the structure then we should be going down.
Below pattern. IF we do not get within the structure then we should be going down.
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Zoomed in
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a peek into the futures last night we see that we had been here before and had formed a consolidation trendline that we are sitting on currently. The markets are preparing for a big sell off IMO.
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Futures and Open market both look like they want to drop. There could be a retest as shown above but I am giving that a 30% probability. I think that Impullisve selling could happen at any moment.
Futures and Open market both look like they want to drop. There could be a retest as shown above but I am giving that a 30% probability. I think that Impullisve selling could happen at any moment.
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Up or down we go because Volume is gearing up for a break one way or another. Beautiful declining volume. Still, I am a biased bear, preference to the breakdown.
Up or down we go because Volume is gearing up for a break one way or another. Beautiful declining volume. Still, I am a biased bear, preference to the breakdown.
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Our Point of Control is looking pretty even in this game of tug of war. I would say the Bull's have shown lackluster performance, and the bears will have one last chance soon to show their strength.
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It's not healthy to spend too much time consolidating near the lows of support. From looking at ES! or SPX500USD we can see that we had been living in this area much longer than the open market traders would see.
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at this point, we could bounce around a little longer, or decide to break at any moment. I think we could be attempting this break now, we will see.
at this point, we could bounce around a little longer, or decide to break at any moment. I think we could be attempting this break now, we will see.
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Lets see if we get supported here for the overnight session, or continue the selling.
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ALERT: at this time 6:45 6/26/2019 and for about an hour beforehand, we have been experiencing very very large changes in market behavior in many different assets. The winds will blow tonight and until the end of the week, which could be the kick start to a very important event.
If we Get Much lower and break this support then I would fear that we could make our way back to the bottom of final support. For right now all that matters is 2913 horizontal support. If that cannot be retaken and held above tonight then expect a large gap down tomorrow at open.
If we Get Much lower and break this support then I would fear that we could make our way back to the bottom of final support. For right now all that matters is 2913 horizontal support. If that cannot be retaken and held above tonight then expect a large gap down tomorrow at open.
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We are creating a base type consolidation that could appear to be an inverse h&S. It most likely is not. I do think that a backtest of the ascending channel's old support could happen, but I am only giving it the same 30% as before.
We are creating a base type consolidation that could appear to be an inverse h&S. It most likely is not. I do think that a backtest of the ascending channel's old support could happen, but I am only giving it the same 30% as before.
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The above chart mimics the ES! and shows the extended hours of trading. We are outside of structure, below our prior supports. I do not see too much upside left for this ol boy.
