S&P 500 Cup and HandleOn the above 4-day chart price action has corrected 10% from the 4600 summer high to find support on the Golden ratio. A remarkable moment now exists to have long exposure. Why?
1) RSI and price action resistance breakouts.
2) Support on 2022 resistance. What a signal!
3) The Cup and Handle pattern confirmation is textbook. The handle breakout follows strong buyer demand on the Golden ratio. This only happens in a technical bull market.
4) The sentiment, overwhelmingly bearish. The Put/Call ratio (2-week chart below) tells us dumb money is massively short. Retail traders have not been this bearish since the Covid correction of 2020. March 2020 was the buying opportunity of a lifetime. November 2023 will be the next date history records as an opportunity no one saw coming. Cough..
5) The target is straight forward enough. The depth of the cup is taken from the bottom of the handle to measure the target. 5500 sometime in 2024.
6) Gold bugs, seriously? If this happens..
Is it possible price action corrects further? Sure.
Is it probable? No.
Ww
Type: Trade (not investment, will explain why elsewhere)
Risk: The farm and your neighbours farm.
Timeframe for long: Remainder of year.
Return: 30%
Monthly Put/call ratio