The End or Just the Beginning?

20 thg 1, 2020

The last time we did a SPY update we had mentioned (although it seemed unlikely and irrational) that if the SPY broke the red megaphone pattern, a parabolic move high was likely to occur. We kept the yellow trendline on the chart because it was really the only form of over-head resistance that was seen once a breakout occurred.

Well...here we are...resistance met. Then much like every other time any ounce of resistance was met, the fed helped gap it up above resistance in overnight trading. With that being said, pending a fake breakout, the only real resistance left seems to be in the QQQ's:



If that breaks, one could argue the parabolic/euphoric move higher has plenty of upside left. Sounds ridiculous, but as long as the fed is pouring billions of dollars into repo, t-bills, and coupons on the daily as it has been since October, there is still plenty of gas left in the tank.

Fundamentally, I remain bearish. Technically, I remain bullish. But until the fed takes its foot off the gas pedal a little bit or AAPL actually shows some signs of cracking...all aboard the irrational train bull train!

One last thing I did want to mention was the break of the peach trendline that has been in play for the past decade. The past two times it was broken, major sell-offs followed erasing all the gains from the breakout. This time around was a little different, two minor corrections off the trendline test occured, then a breakout, and successful retest. All the more reason the coiled-spring" reference could be brought up here.



Per the usual, I'll try to update this thread when price-action suggests some potential change in direction. *Always do your OWN analysis before trading!*

22 thg 1, 2020

Ghi chú

Two straight days of sell-offs in the afternoon. Wont call that a bullish sign by any means but....
A retest of the yellow trendline is healthy. As long as there isn't a breakdown below it and the 9 day ma...Still not much to worry about...

23 thg 1, 2020

Ghi chú

Clean bounce or now..

24 thg 1, 2020

Ghi chú

Finally,
All it took was for us to say go long SPY and boom...
It is still intraday...but as of this moment
SPY attempted to open at ATH's, it failed...it then failed to hold the 9 dma...the support line it had just taken over (false break)...all of which is being done on high volume.
Not to mention this virus is not getting better anytime soon. I'd assume the bad news hits this weekend....(Like all bad news does). So a gap down on Monday? But does the dip buying continue from there? I think a lot of people are realizing the risk of holding onto longs going into the weekend though...

24 thg 1, 2020

Ghi chú

This is the reason we bring up the idea of a gap down, and dip buy come monday:


It was the exact occurance last time there was an intraday break and close of below the 9 day....Only difference is it gapped down...hit major resistance. There is no major resistance until around 319 this time around.

24 thg 1, 2020

Ghi chú

AAPL is still green on the day though...Two days before earnings...Still don't see any "serious" selling until Apple tags along. Which could start next Wednesday after earnings....

24 thg 1, 2020

Ghi chú

Price action suggest a bearish move....but the VIX is telling a different story for the time being after a failed breakout today:



Here's where the fun comes in though.....As noticed by the chart...there has been no open above the trendline since the formation, but instead failed intra-day breaks or sell-offs at resistance.

If the bad news does hit the markets over the weekend, and there is a descent sized gap down come Monday morning...that open above the trend is inevitable....and the flood gaps could open...

24 thg 1, 2020

Ghi chú

Here's the wedge break of the January 2018 sell-off:



One thing we always try to cover when talking sell-offs is how there is almost always some form of attempt to make new highs or bounce before the more violent sell-off occurs.

Here's this past July sell-off post fed meeting:


In this case the SPY did attempt to make new highs, and it did for a day or two...but the VIX had again broken outside of resistance and was simply consolidating above the trend signaling the further sell-off....

All in all...the VIX could continue to bounce around in this channel for awhile still...meaning further highs on the SPY....But a bad start to Monday, a lack of dip buying to open the day, or a failure to get back below resistance can be the big red flag for an imminent strong sell-off.

In 2018, there wasn't an attempt to make new highs but there was 2 days off flat trading..which alone may have not seemed like much...but the VIX was retesting the break of the trendline on those two days before flying higher..

24 thg 1, 2020

Ghi chú

of**

24 thg 1, 2020

Ghi chú

The bigger picture:


19ish would be the next resistance zone...which is still not collapse panic selling territory...but if that breaks...it does get ugly.