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Below is a chart of the percentage of stocks above their own 200-day moving averages (symbol $SPX200MA). Unsurprisingly, this thing is cratering, and what’s fascinating to me as a lifelong chartist is how, even though this is a derived number and a non-tradeable instrument, the chart still obeys classic charting dynamics.
Crazy rally today. Stocks are really overbought on a short term basis at the moment. I cover (WEEKLY) AMZN,NVDA,META,GOOG and other markets and stocks with this model, but today I wanted to have a quick look at the SPX and NDX DAILY indices, just to give you an idea of how the market currently looks like, from my perspective.
Let’s start with the SPX DAILY:
It looks like the market may try to rally already this week. If that happens, it’s quite probable that the rally will be short-lived (at least until the current black cloud persists…). So, if the rally is a Bear Market Rally, these models below may help to determine “how far” these rallies can go. These are WEEKLY models, so as a minimum the time horizon is 1 week (or multiples of that), but things are happening VERY fast at the moment, so I would not be surprised to see a 1-week rally and it may even end on Wednesday.
All this said, here are the targets to monitor, to go SHORT again and profit from the next leg down:
As I’ve been working on my post today to look at downside patterns on US equity indices I have realised that this too needs to be split into two posts, so this first TA post will just look at the historical and very compelling current setups on SPX, while the second post will also look at the current setups and targets on QQQ, DIA and IWM.
In my last post overnight, Brave New World, I was looking at the economic reasons why I think that the planned tariff war on the world due to start tomorrow may have a very serious economic impact, particularly on the US economy.
In this post I am looking at last four big bear markets / crash setups on SPX and how they played out, and looking at the setup and targets currently on SPX if we are about to see something similar play out here, as I think we well might.
(more…)One of the things I enjoy most about being a technical analyst is that sometimes we can make calls that almost look like magic as they deliver, though in truth they’re obviously just a combination of math, historical analysis and good pattern recognition. I also love an uncertain market, as while anyone can look like a genius in a strongly trending market, it takes real skill to trace the likely paths ahead in uncertain markets. Whatever else Trump has done or may yet do this year, he’s at least been delivering a an interesting year for me, and I thank him for that. 🙂
Anyway, the story of this rally so far ……..
(more…)
