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I just finished reading a premium post over on ZeroHedge (which seems to toggle from bullish to bearish on a daily basis in recent weeks) which made a big stink about how this was a great time to buy stocks, because they have found support at the 200-week moving average. Well, it’s true, ever since the printing presses went white-hot following the financial crisis, the 200-WMA has indeed been an important bounce zone.
Before you take my head off, I am well aware that for any trading strategy, they say having a bias is a profit killer. But what Iām referring to is how I develop a directional bias for each trade. The reason I need a directional bias is because at the end of the day, trading is inherently biased. Every time you buy, you are bullishly biased. You expect your purchase to appreciate in value. Vice versa for shorting. The big question that would affect your disposition is fundamentals and timeframe.
As with all my posts, I am going to speak from my own perspective and how I take this into account in my own trade plan. Some of you may disagree wholeheartedly, and that is fine. But I hope you learn something that helps you in development of your own trading plan.
(more…)Apologies for this being the only post this week. I’m moving house in a few weeks and I’ve been really busy.
In my last post I was looking at the possible hard fail setup on SPX, NDX, IWM and Dow if the inverted H&S patterns that had broken up failed on moves back below the right shoulder lows on those patterns. On that fail there would be targets back at the retests of the 2022 lows and the last of those four low retest targets were hit at the low yesterday.
SPX tested the 200 week moving average for the third time this week and did an impressive pinocchio below it yesterday morning, though SPX recovered back over it quickly. For what it’s worth that was the largest pinocchio down through it since the low in 2009, excluding of course the hard break below it in 2020.
(more…)I wasn’t going to bother with the “Fed Spread” because there’s nothing particularly insightful about it. Indeed, I’m going to drop my “every Thursday” pledge because it’s only useful if there is in fact a big “spread” between the two. As it is now, the S&P is pretty much where it “should” be from a liquidity perspective (this is normally a premium post, but this time I’m showing everyone).
There’s been quite a bit of speculation about a possible bear market low having just been made at the last low, and that is technically possible, though I think rather unlikely. More likely is the possibility that SPX is returning to retest the all time highs to make a second high on a huge double top pattern looking for a retest of the 2020 lows, but even that is doubtful in my view. I think that if the high had been going to get a retest then the rally that ended at 4326.28 would likely have continue higher into that then.
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