Looking at the daily chart we find a few key points to consider that we can't stress enough. Last Friday saw a low activity day, which closed as an inside day, showing a loss of momentum from the bullish camp. It's possible the burst from the previous session was short lived and we're witneseeing a sideways move before more clear direction emerges, as the market digests the upcoming fundamental events, being the BOJ and FOMC news the most important ones.
We can obtain clues from VIX and other indicators like BID, IBB, as well as USOIL and others, but ultimately, the technicals in the SPX chart will tell us how to operate. If we don't see 2172.8 hit by the close of the 20th, or sooner, we could expect bears to regain strength, and send the index down once more, to test the origin of the bullish thrust. If buyers don't step in, we might retest lower levels of support, and then, the DJIA neowave forecast might be back on track, specially if the weekly validation target explained in my chart is met in time.
For now, we have to analyze the price action in the short term to navigate these murky and volatile waters, and asess if each support level is holding or not, based on our proprietary methods, Tim West's time at mode, and key hidden levels concepts. I will be trading the short term swings in SPX cfds, whilst holding my equity positions and protecting them with options if need be as I've already explained in my other posts, and I'd reccomend you to do the same. Ultimately, if we break below the 2098.9 key level, a more bearish outlook might pan out, possibly sending the market down strongly, but it's a lower probability occurrence. The bullish scenario, I already explained in my 'The market's a buy' publication, but if this time at mode signal were to fail, the bearish outcome could be drastic. See comments for the chart.
My analysis thus, makes me take a neutral stance, and be open to being on both sides, either the bull or bear camp, but with solid evidence backing up each trade, and not a vague argument, or simply an isolated technical pattern in the charts. I'm keeping the bigger picture in mind, and also striving to minimize exposure to market risk in my portfolio. Good luck, stay tuned for more updates. Cheers,
Ivan Labrie.
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Bearish scenario if my 2-month forecast fails, with a breakout below 2100-2073:
Target of 1629.9 becomes valid.
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I'm holding NAS100 longs, and QQQ/QLD. Took back the SPX cfd long at market open today. Risking a drop to my previous long entry at 2131.7 (same size trade)
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(SPX long looks good, we have an interesting rally in oil, AUDUSD, XAUUSD, etc.) I'm holding to see if we hit the validation target (see the green anchor note on chart) If it fails to be hit on time I'll flip short by the 20th's close.
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Closed SPX long at 2150 for now.
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Bought back at 2148.50, stop 2140.5.
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After the stop getting hit I got back in when we found support at the high volume level below. In again, stop is 2131.9 now, entry: 2140.7. I want to see if mutual funds buy the dip today, then see if tomorrow we hit the 2172 mark, otherwise I'll close longs on close, and flip short before the BOJ/FOMC news come out, resuming my short position from 2187.50 (basically, it's a mental trick, to think about risking previous realized profit, this helps you gain flexibility when maneuvering the swings, and avoids 'missing out' on moves)
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Last reentry in good profit now, let's wait and see how it evolves. You know what to look for, if we don't meet the forecasted target in time I'm flipping short with the same size as before, risking a rally above 2181.3
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We didn't hit the target on time, but, I find it hard to see further declines in stocks. I'd reccomend buying SPY puts tomorrow before the FOMC news come out, ideally, to protect other long positions in your portfolios. We could look to sell rallies in SPX if the BOJ manages to send it up to the resistance zone on chart here.
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Exit long and flip short, stop 2155.8
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Short stopped. I'm long NAS100, looking to add on dips.
This is going to be another interesting and historical week. Raise rates before the US Presidential Election or not? Bank of Japan: Hmm... NIRP and maintain 2% inflation or not. I haven't yet checked the VIX or many other weekly routines like I normally do. I am mainly holding winners and losers (potential winners). Hope you havew a good week also with the S&P.
IvanLabrie
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Thanks, all good so far, gradually making money for now.
Crossing fingers the p&l trend remains up :p
MindTrader
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IvanLabrie
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Many are probably shorting it due to this pattern.