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Weekly Update: Next Stop 4312.25The rally off the August 18th lows is an overlapping mess that stands a high probability of concluding very soon, if not TODAY. However, yesterday's CPI report market reaction marked a unique opportunity to remind followers, that markets are not linear. You can choose to look at the CPI report positively through a bullish or bearish lense. The reality was the pattern forming prior to the release was overlapping and signaled traders were uncommitted to higher or lower price action. In my trading room we debated the micro pattern the night before and, in the end, we had nothing constructive to the downside, nor the upside. Therefore, it really didn't matter what the report said, we had no micro pattern pointing us down. The upside was well contained within a larger counter trend rally and that was because we had no impulsive pattern up either. I commented in my trading room, "Does anyone still feel markets are moved by news or events"? A hotter than expected CPI discredits the narrative the Fed may be done raising rates. Therefore, one would expect the markets to sell off. But the opposite happened. You can choose to embrace any narrative you would like to explain that sort of price action. You can choose to invest or trade based on your personal perspectives…all of those buys and sells create a pattern. In reality, traders were telling us prior to the release...there was indecision about market direction and therefore we remained mired in this consolidation. But I do think market participants will get the memo shortly. That’s because outside of the micro patterns, the larger patterns are telling us we have a meeting at 4312.25 regardless of your narrative, or perspective. …and attendance is mandatory. See you all at the meeting. Best to all, Chris
CME_MINI:ES1!Short
by maikisch
2
S&P500 Short-term buy within the weekly Channel Up.The S&P500 (SPX) hit today the 1H MA200 (orange trend-line) for the first time since September 06, which was before the current 5-day Channel Up pattern. So far it delivers an initial rejection, whose pull-back can extend even below the 1H MA50 (blue trend-line). Based on the 1H RSI though, which is posting a sequence similar to September 07 - 08, we are close to the reversal point, making it already a buy opportunity. You can confirm that after the price closes a candle above the 1H MA200. Regardless, our target is at the end of a +1.27% increase and the top of the Channel Up at 4500. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
CAPITALCOM:US500Long
by TradingShot
3
CPI – Inflation, Disinflation, but No RecessionS&P 500 INDEX MODEL TRADING PLANS for WED. 09/13 Our trading plans published yesterday stated: "Our current bearish bias for positional trading continues, with the bear case appearing a little more plausible in the coming days. It is hard to find what unexpected bullish scenarios could evolve in the near future, so bulls need to be a bit cautious with their current gains. Taking some money off the table could be prudent". This morning's CPI numbers have something for everyone, leaving room for both bulls and bears to adapt them to their case. Immediately after the release, yields spiked up, but then fell back down...essentially leaving everything open to one's own interpretation. It remains to be seen if tomorrow's PPI numbers will be any more clarifying than that. Our models indicate bearish bias for positional trades while the index is below 4470 on a daily close basis. The index has to close above 4507 for our models to abandon the bearish bias. Aggressive, Intraday Trading Plans: For today, our aggressive intraday models indicate going long on a break above 4487, 4480, 4465, or 4450 with a 9-point trailing stop, and going short on a break below 4485, 4475, 4456, or 4448 with a 9-point trailing stop.  Models indicate explicit long exits on a break below 4463, and short exits on a break above 4459. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 09:31am EST or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #softlanding, #cpi
SP:SPX
by TradersAIDotCom
S&P500: Formed new bottom. Expecting a rise.The S&P500 index has hit the 0.382 Fibonacci level after a 4H Golden Cross that turned the 4H technical outlook bullish (RSI = 59.782, MACD = 9.210, ADX = 36.280). As mentioned before, this is the same fractal of December 2022 to January 2023. Holding the 0.382 was key to sustaining a rise to the 1.236 Fibonacci extension. We remain bullish on S&P500, targeting the current 1.236 Fibonacci (TP = 4,670). Prior idea: ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
CAPITALCOM:US500Long
by InvestingScope
5
Trading Plans for TUE. 09/12 - Spikey Consolidation, ContinuedS&P 500 INDEX MODEL TRADING PLANS for TUE. 09/12 Our current bearish bias for positional trading continues, with the bear case appearing a little more plausible in the coming days. It is hard to find what unexpected bullish scenarios could evolve in the near future, so bulls need to be a bit cautious with their current gains. Taking some money off the table could be prudent. Our models indicate bearish bias for positional trades while the index is below 4470 on a daily close basis. The index has to close above 4507 for our models to abandon the bearish bias. Aggressive, Intraday Trading Plans: For today, our aggressive intraday models indicate going long on a break above 4490, 4473, or 4450 with an 8-point trailing stop, and going short on a break below 4487, 4478, 4463, or 4448 with a 9-point trailing stop.  Models indicate explicit long exits on a break below 4470, and short exits on a break above 4481 or 4466. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 10:36am EST or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #softlanding
SP:SPX
by TradersAIDotCom
Trading Plans for MON. 09/11 - Potential Spike-up Ahead?S&P 500 INDEX MODEL TRADING PLANS for MON. 09/11 Our current bearish bias for positional trading notwithstanding, our intraday models point to a possible spike up today. Shorts need to be patient and not jump the gun but wait for confirmation for initiating any new shorts. Our models indicate bearish bias for positional trades while the index is below 4470 on a daily close basis. The index has to close above 4507 for our models to abandon the bearish bias. Aggressive, Intraday Trading Plans: For today, our aggressive intraday models indicate going long on a break above 4492, 4483, 4475, 4466, or 4459 with an 8-point trailing stop, and going short on a break below 4487, 4480, 4472, or 4448 with a 9-point trailing stop.  Models indicate explicit long exits on a break below 4463 or 4457, and short exits on a break above 4450. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 09:36am EST or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #softlanding
SP:SPX
by TradersAIDotCom
The Great StagflationIn this post, I will present a compendium of higher timeframe charts to show why it's likely that the U.S. economy, and likely much of the global economy as well, is heading into a period of stagflation. I have termed this coming period "The Great Stagflation" because I believe this is how the mid-2020s will be characterized in retrospect. The term stagflation refers to a period when economic growth slows or declines, unemployment increases and inflation remains elevated. To listen to my full thoughts on stagflation, and my thoughts on why I believe we're already in a recession, you can watch my video below. Chart 1 - S&P 500 Yearly Chart (SPX) This chart shows a downward oscillation of the Stochastic RSI on the yearly chart of the S&P 500 index (SPX). This degree of strong downward momentum on the yearly chart of SPX is rare and has only occurred just three times in the past 100 years: the Great Depression, the 1970s Stagflation, and the Dotcom Bust. In each case, the stock market stagnated for a period of at least a decade. Chart 1a This chart shows the several important Fibonacci levels on the highest timeframe on the S&P 500 (SPX). What this chart shows is that the market bottom in 2022 was right at the 3rd Fibonacci extension, when using the peak before the Great Depression and the lowest ever price for SPX as our reference point. It's possible that if the stock market falls below the market bottom from 2022 decisively, the next major Fibonacci support on the highest timeframe will be all the way down at the Dotcom peak (or pre-Great Recession peak), which is the 2.618 Fibonacci extension. This price level is highlighted in red. Chart 2 - Producer Price Index (PPIACO) This chart shows the Producer Price Index by Commodity: All Commodities (PPIACO). The Producer Price Index is a measure of the average change in the selling prices received by domestic producers for their output. It is calculated by the Bureau of Labor Statistics (BLS) and is reported on a monthly basis. It covers a wide range of commodities, including those used as inputs for goods, services, and construction, and is grouped into various stages of production, such as raw materials, intermediate goods, and finished goods. The Producer Price Index can be used as a leading indicator of Consumer Price Index (CPI). As we see in this yearly chart, the Stochastic RSI is showing strong upward momentum that is rising up from oversold conditions. This type of upward oscillation can add inflationary pressure for years to come, and can set the stage for stagflation. Chart 3 - Stock Market Deflation vs. Commodity Price Inflation This chart shows the S&P 500 index (SPX) compared against the Producer Price Index by Commodity: All Commodities (PPIACO). During periods of stagflation, the SPX/PPIACO ratio oscillates downward as commodity price inflation causes the Federal Reserve to tighten the money supply to curtail inflation. As a result, the stock market declines as commodity prices inflate. Thus, the yearly chart of the SPX/PPIACO ratio could be sending a warning that what we are dealing with is a period of prolonged stock market stagnation. Chart 4 - Stock Market to the Moon These quarterly (3-month) charts show the entire price history of the U.S. stock market (SPX) dating back to 1871. I applied a log-linear regression channel to give a rough approximation of the extent to which the stock market has deviated from its mean, or average price, over the years. In the fourth quarter of 2021 (Q4 2021), the stock market closed exactly at the +2 standard deviation from its mean price, the highest ever recorded on a quarterly closing basis. The chart on the right side shows a zoomed-in view, which shows how perfectly SPX reached the +2 standard deviation before declining. The mean or average price, which is visualized in the chart as the red line, is so far down, that it does not even appear on the zoomed-in chart. To put the meteoric rise of the stock market during the period of limitless monetary easing into perspective: It has been so extreme that it has actually rendered the extreme bubble of the Roaring '20s, before the Great Depression, as merely being an average stock market valuation. Chart 5 - Supercycle Bearish Divergence This chart ominously shows a major bearish divergence on the yearly chart of the S&P 500 index (SPX). Bearish divergence is when price creates a higher high while the RSI creates a lower high. Bearish divergence can warn of a coming reversal, as it reflects the notion that the bull run is becoming exhausted. Looking back 150 years, such an extreme bearish divergence has actually never occurred before on the yearly chart. This multi-decade bearish divergence could be indicating the start of a new Supercycle, or potentially even the start of a new Grand Supercycle -- one in which the stock market underperforms for years to come, as interest rates, or the cost of money, trends higher. Only time will tell how this will unfold, but this chart provides further evidence that we're likely entering a period that will be characterized by prolonged stock market stagnation. Chart 5a Volume has been declining during the formation of this bearish divergence. Chart 6 - Stock Market Growth vs. GDP Growth This quarterly chart shows Gross Domestic Product (GDP) on the left and the stock market (SPX) on the right. Applied to both charts is a log-linear regression channel. Notice how GDP is barely hanging on to the -2 standard deviation at a time when the stock market has blasted up to the +2 standard deviation. This extreme divergence has been made possible solely by the Federal Reserve's monetary easing experiment. The Federal Reserve has compensated for declining GDP growth by lowering interest rates even faster than GDP growth declines. By doing this, the Federal Reserve has made the cost of money so low that risk assets were able to rally, even as actual increases in productivity did not occur. The extreme divergence of extreme stock market outperformance coupled with extreme GDP growth underperformance is unsustainable, particularly in the face of commodity inflation. The Great Stagflation will likely see stock market returns stagnate, which in turn will more accurately reflect stagnating economic growth. The cycle of boom and bust is largely an inevitable eventuality. Chart 7 - Price of Stocks vs. Price of Bonds In a prior post, I discussed the meaning of this chart. Simply put, this ratio chart compares the price of the S&P 500 Index to the price of a risk-free Treasury bond (defined here as the 10-year U.S. Treasury bond). I applied a log-linear regression channel to illustrate the fact that despite all the tightening that the Federal Reserve has already undertaken, we are only just now at the historical mean for this ratio chart. What I am about to say next is quite dense, but see if you can understand my logic: Since the numerator of this ratio chart (SPX) currently has strong downward Stochastic RSI momentum on its yearly chart (which is depicted in Chart 1 above), and since this ratio chart has strong upward momentum on its yearly chart, then this suggests that the denominator (the price of a 10-year U.S. Treasury bond, written here as the inverse of its yield {1/US10Y}) is likely to head down faster than numerator (SPX) does, thereby allowing the ratio to move up and reach the +2 standard deviation of the regression channel. Since the price of bonds moves inversely to the yield, this ratio chart is ominously warning that the yields on 10-year Treasury bonds may move much higher in the years to come. If Treasury yields are moving higher this is likely because inflation continues to be persistent. Such a tight monetary environment, coupled with persistent inflation, is likely to result in stagflation. To read more on the meaning of this chart, you can view my post below. Chart 7a This chart is similar to the previous, except that real rates are used. With real rates rising so drastically (and therefore bringing down bond prices) as a ratio to the S&P 500, it creates the appearance that the stock market is becoming more and more overvalued, even as it nonetheless sells off! This reflects a massive dislocation in capital. Over time, capital will flow out of the stock market and into less-risky and higher-yielding Treasury bonds, particularly since commodity inflation is unlikely to abate and thus Treasury yields will remain elevated. Chart 8 - The Real Cost of Apple (AAPL) This chart shows the price of Apple's stock (AAPL) compared against the price of a 10-year U.S. Treasury bond. Over the past year, Apple's great balance sheet and high cash flow, has made it seem like a safe haven relative to more speculative risk assets and companies with negative cash flow. Yet, when compared against the actual safe-haven asset (the 10-year U.S. Treasury bond), the premium in Apple's price could not be higher. The price of AAPL for the current yield on a 10-year U.S. Treasury reflects a capital dislocation (the biggest ever). In other words, too much capital is in Apple's stock for the yield on a 10-year U.S. Treasury to be as high as it currently is. An efficient market would cause capital to flow out of Apple's stock and into less-risky and higher-yielding U.S. Treasury bonds over time, especially since persistent inflation is likely to keep Treasury yields higher for longer. Since Apple is a component of many exchange-traded funds (ETFs) and mutual funds, the decline in its value may cause the entire stock market to decline. As unemployment rises, the stream of passive contributions to mutual funds and ETFs will slow and reverse as drawdowns and hardship withdrawals increase. Higher unemployment will also lead to less consumer spending on Apple's products and services causing an earnings recession. Finally, rising geopolitical tensions between the U.S. and China may severely disrupt supply chains. Apple stands to gain little, but lose a lot in the years to come. Chart 9 - High-Yield Corporate Bonds vs. Money Supply The symbol in chart is a bit dense to understand, but upon deciphering it, one can understand that it warns of a coming liquidity crisis for companies with lower credit ratings. First, BAMLH0A0HYM2EY is the symbol for the all-in effective rate of high-yield corporate bonds. This represents the cost of borrowing for companies with lower credit ratings. Second, the denominator is the M2 money supply in the U.S. Finally, the chart is adjusted by an arbitrary multiplier to remove visual distortion. The effective yield that companies (which the market considers to be risky) must pay on their bonds has increased rapidly relative to the supply of money, the latter of which has actually been decreasing at a record pace. This is a liquidity crisis in the making for companies that have low credit ratings and which need constant infusions of new debt to maintain financial viability. If the amount of money needed to finance new debt is increasing at a record pace as the supply of money decreases at a record pace, then the amount of money in the economy available for these companies to earn, so as to be able to finance their debt, will quickly become insufficient as a matter of mathematical certainty. Thus, a liquidity crisis is largely inevitable, particularly since the central bank may not be able to intervene to the extent that would be needed to avert such a crisis without worsening commodity inflation. As we can see in the monthly chart, the EMA ribbon which acted as resistance, has been broken. Even as the Stochastic RSI oscillates down, price is remaining above the EMA ribbon for the first time since the Great Recession. Chart 10 - Persistent Inflation This chart shows just how persistent inflation has been. This ratio chart compares iShares TIPS Bond ETF which tracks an index composed of inflation-protected U.S. Treasury bonds (TIP) to iShares 7-10 Year Treasury Bond ETF (IEF). For the first time ever, the Stochastic RSI (which is shown on the bottom) has oscillated fully down to oversold levels on the monthly chart while price remains above the EMA ribbon. This suggests a major trend change may have occurred in that the EMA ribbon, which has generally held as resistance, may have flipped to support. This leads us to conclude that inflation may be persistently elevated for longer than anticipated. So long as inflation remains high, central banks must keep interest rates, or the cost of money, high as well. Compare the current situation to the Great Recession when inflation quickly turned into deflation, which allowed the central banks to pivot to monetary easing. One might question whether this monthly chart is showing a... bullflag? Chart 11 - Commodity Inflation Supercycle Similar to the previous chart, this chart shows Invesco DB Commodity Index Tracking Fund (DBC). DBC is composed of futures contracts on 14 of the most heavily traded and important physical commodities in the world. Each candlestick in this chart represents a 2-month period. What this chart shows is just how persistent commodity inflation has been. Despite nearly an entire year of monetary tightening at a record pace, commodity futures are only very slowly disinflating. Compare this to the Great Recession, when commodity prices rapidly deflated. This time around it is likely that commodity prices will remain elevated even as economic growth slows. This is occurring because commodity prices have entered into a new supercycle, and this new supercycle of higher commodity prices will likely result in The Great Stagflation. Chart 11a It appears that if anything, DBC is presenting a bull flag pattern on this higher timeframe chart. This could stymie the Federal Reserve's ability to pivot to easier monetary conditions should unemployment begin to rise rapidly or should corporate liquidity issues mount. Chart 12 - Cost of Energy This chart shows the price of American multinational oil and gas corporation, ExxonMobil (XOM). Price has been ripping higher after bouncing on the -2 standard deviation regression channel line during the pandemic shutdown. Now, the yearly Stochastic RSI is showing strong upward momentum. This suggests that the costs of energy, including fossil fuel energy, will trend upward for years to come, even as economic growth slows. Similar patterns as this are appearing across virtually all charts in the energy sector, including in sustainable energy (hydrogen, uranium, etc.). Since energy is considered a commodity, these charts patterns buttress the assertion that commodity prices may continue to inflate in the years to come. In my post below, I note how the hydrogen energy company Plug Power (PLUG) looks to be in a log-scale bull flag pattern. (Not a buy or sell recommendation) Chart 13 - Coffee This chart shows that coffee futures bounced after undergoing a Fibonacci retracement to the 0.618 level. Now, long lower wicks are forming on bullish reversal candles, indicating that prices are likely to attempt a rally on the monthly timeframe. This is yet another warning that commodity inflation may remain persistent. Chart 14 - Eggs This chart, with a seemingly cryptic symbol, shows the price of eggs (specifically, the price of one dozen of large, Grade A eggs) compared against the U.S. money supply (M2). The chart is actually quite ominous, and I'll explain why. The price of eggs is soaring at a record pace even as the supply of money is shrinking at a record pace. For the first time on record, the price of eggs relative to the supply of money has reached a level above the 6-month EMA ribbon, which has historically always acted as resistance. From a conceptual perspective, what this chart actually means is that more of consumers' wealth must go into meeting their basic food needs. Thus, consumers will have less wealth to spend on other goods and services. Since eggs are inferior goods, meaning that one's demand for eggs increases as one's income goes down, the soaring price of eggs may actually be confounded by increasing demand (alongside supply constraints). If demand of these inferior goods increases as unemployment goes up, and eggs remain scarce, the price can soar even higher as the below chart suggests. This chart shows the yearly Stochastic RSI is only now just beginning to oscillate up. This means that the upward pressure on the price of eggs may last for years to come. Of course, eggs are commodities. When commodity prices inflate even as the central bank tightens the money supply, this may result in stagflation. Commodity inflation is a central bank's worst nightmare because it makes it difficult to pivot to easier monetary conditions to stimulate a slowing economy. If a central bank pivots to easier monetary conditions before commodity inflation is mitigated, then commodity prices will not just continue to rise, but they may hyperinflate. Thus, this inflationary spiral in the price of eggs is sending an ominous warning about the coming Great Stagflation. Chart 15 - Money Supply This chart shows that for the first time, when looking back to 1960, the U.S. money supply (M2) actually declined year-over-year. The amount of dollars removed from the money supply in 2022, could carpet the country of Luxembourg and spill into Belgium, Germany and France, or if each dollar were lined up lengthwise, would span the distance from earth to the moon more than 100 times over. Fortunately though, enough dollars still exist within the M2 money supply, that if each dollar was lined up lengthwise, it would reach from earth to past Uranus, the second most distant planet in our solar system. Chart 16 - The Fed's Balance Sheet The chart on the left of the two charts shown above, shows what appears to be the Federal Reserve rapidly rolling off assets off its balance sheet in 2022, and into 2023. However, when put into perspective, as illustrated by the chart on the right, the past year of balance sheet rolloffs barely scratches the surface of the total amount of assets that the Federal Reserve added to its balance sheet over the decades of monetary easing. In the years to come, the global financial system will have to grapple with the consequences of the monetary easing experiment ending. Chart 17 - Dollar Index (DXY) This chart shows what appears to be the U.S. dollar index (DXY) breaking out of a bull flag on this yearly chart. In doing so, it is also breaking out above the resistance of its EMA ribbon, as shown in the chart on the right. On a conceptual level, by tightening the money supply more than the central banks of other countries, the Federal Reserve is effectively exporting inflation to those countries, and averting domestic commodity shortages. Yet, as with everything, there are disadvantages to doing this. Tightening the U.S. money supply too much can cause global liquidity issues since the U.S. dollar is the world's reserve currency and most global debt is denominated in it. Already the Bank for International Settlements (BIS) has warned of dollar liquidity issues in the FX swaps and forwards market. If commodity inflation resurges, and forces the U.S. Federal Reserve to hike more than anticipated, this could cause a global liquidity crisis. Destabilizing the fragile and highly leveraged dollar-denominated global debt and derivatives market could ultimately accelerate the move away from the dollar standard. This Catch-22 is likely to result in a Great Stagflation. Chart 18 - Soaring Risk-Free Rate This chart shows a clear trend break in the yields of 10-year U.S. Treasury bonds. The era of lower and lower interest rates over time is over. In theory, when the interest rate on a bond rises, this occurs because the market perceives greater risks associated with holding that bond. Therefore, the rapid rise in the risk-free rate (10-year U.S. Treasury yield), means that suddenly this risk-free asset is more... risky. Since holding any other asset, except physical cash and physical gold, is considered some degree more risky than holding U.S. Treasury bonds, then all other assets become more risky as well. One would expect this to happen as the monetary easing experiment comes to an end, and the everything bubble deflates. Chart 19 - Extreme Yield Curve Inversion This chart shows the yield curve inversion between the 10-year U.S. Treasury bond and the 3-month U.S. Treasury bill. Just days ago, the inversion slipped to the steepest inversion since the early 1980s. This is often considered a reliable recession indicator because these yields have never inverted without a recession ensuing. Effectively, these yields only invert because the central bank is tightening the money supply. When yields are inverted, bank lending declines because banks can no longer profitably borrow at short term rates to lend at long term rates. Since bank credit creates the most amount of money in a capitalist economy, a yield curve inversion is a warning of impending decline in the money supply, and therefore an impending decline in corporate earnings and consumer spending. Corporations can only earn, and consumers can only spend, some subset of the total money supply. Right now, that warning is blaring the loudest it has in over 40 years. In fact, we've never had such a steep inversion while the global economy is as leveraged as it is. Only time will tell how this will play out, but it's unlikely to end well. Chart 20 - Volatility (VIX) This chart shows the Volatility S&P 500 Index (VIX) in a years-long symmetrical triangle pattern. This triangle pattern will likely end at some point this year, or early next year. Since the yield curve is inverted, this pattern will quite likely end with a breakout. Indeed, the yearly Stochastic RSI momentum for the VIX is upward, as shown in the chart below. Chart 20a As noted above, this chart shows that the yearly Stochastic RSI for the VIX is on a bull run. Chart 21 - Job Openings This chart shows that job openings reached the +2 standard deviation from their mean in early 2022. This was likely not just a business cycle high, but more likely, this was a supercycle high. The U.S. economy is unlikely to achieve such a high amount of job openings again for the foreseeable future. Since GDP growth barely substantiated such a high amount of job openings, one may conclude that this occurred due to excessive economic stimulation that denotes the monetary easing experiment. Chart 22 - Dow Jones Industrial Average Index (DJI) This chart shows that even with the declines in 2022, the Dow Jones Industrial Average Index (DJI) remains at an extremely overbought level. The only other times the DJI has been as overbought as it is now was before the Great Depression and before the Dotcom Bust. Chart 23 - International Stock Markets This yearly chart compares the performance of S&P 500 (SPX) to that of the Deutsche Boerse AG German Stock Index DAX (DEU40). As you can see, it looks like the SPX is set to underperform the DEU40, possibly for years to come. Technically, the DEU40 can outperform the SPX by falling by less than it. Thus, this chart does not speak to absolute performance. Chart 23a This yearly chart compares the performance of S&P 500 (SPX) to that of the NIFTY 50 (NIFTY). The NIFTY is a benchmark Indian stock market index that represents the weighted average of 50 of the largest Indian companies listed on India's National Stock Exchange (NSE). It looks like the NIFTY has formed a years-long bull pennant relative to the S&P 500, and that the former could be ready to outperform its U.S. counterpart for years to come. It seems that in a defragmenting world with rising tensions between global super powers, a largely neutral India could be poised to outperform. So far, India has become a beneficiary of sanctions on Russia in that it has been able to purchase energy at discounted prices from the latter. Discounted energy prices, in a world that is otherwise struggling with commodity inflation, is a unique advantage that may explain why the NIFTY is set to outperform. Cheap energy enables strong economic growth. Chart 24 - Emergence of Bitcoin Let's go on a journey through time to measure just how disruptive the emergence of Bitcoin has become to traditional financial markets. This chart shows that, in just over a decade's time, Bitcoin has generated more wealth for an investor than the S&P 500 has generated in the past 150 years. Of course, such performance is not sustainable, and the returns of Bitcoin will become less and less impulsive with each successive halving cycle, which is mathematically consistent with a log growth curve function. Chart 24a This chart shows that the central bank can use interest rates to deflate the price of risk assets. As Treasury yields rise, risk assets typically decline. This shows that individuals' wealth is controlled by central governments. Chart 25 - Stock Market Decay This chart shows the performance of the U.S. stock market (SPX) compared against the performance of Bitcoin over the past ~15 years. There has never, in the history of the stock market, been an asset class that actually turns the exponential growth of the S&P 500 into a decay function like this. Bitcoin has become too disruptive to traditional financial markets, and is undermining central banks' ability to control individuals' wealth. Thus, central banks are preparing to deal with this problem. The solution will likely be in the form of CBDC which will restrict one's ability to convert fiat currency into decentralized cryptocurrency such as Bitcoin. Yet, CBDC can also result in unprecedented control by central governments of the way in which humans transact. In the coming months, I plan to write a research-based post on Bitcoin, cryptocurrency, and the ways in which blockchain technology and non-fungible tokens (NFTs) will revolutionize the way humans transact, authenticate ownership, and verify originality in a digital space. But for this technology, in a digital world denominated by AI, it will become impossible for humans to distinguish between what is real and what is not. Important Disclaimer Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
SP:SPX
by SpyMasterTrades
72
S&P500 Rising Wedge is forming a bottom. Bullish.S&P500 / US500 is trading sideways as it attempts to form a bottom on the Rising Support of the Rising Wedge pattern. The 4hour RSI rebounded from the oversold territory as on the August 18th bottom. Every Higher High on the Wedge's top was a Fibonacci 1.618 extension from the previous one. Buy now and target 4598 (Resistance B), which is slightly under the next Fibonacci 1.618 extension. Previous chart: Follow us, like the idea and leave a comment below!!
CAPITALCOM:US500Long
by TheCryptagon
10
Weekly Update: We Hear You and Choose NOT to ListenIf you’re a parent, you’ll certainly understand that children do things despite being told not to. Is it out of curiosity? A rebellious nature? An issue with authority? Or my favorite, they know more? Yes, yes, and yes. It could be those answers or a variety of other reasons. Nonetheless, we don’t expect market participants to act like children. Maybe as adults, some of us never grew up and continue to do things for the same reasons we did as children. Impulse control. Patience. Some of the hardest lessons to learn, and undoubtedly can also be the costliest. I recently read an interesting article trying to make sense of why the market has been up since March. In this article an individual, Michael Darda, with Roth MKM is quoted as saying… “ The equity markets are ignoring the bond markets and that is a mistake ”, says Michael Darda, chief economist and market strategist at Roth MKM. “ I (Darda) examined seven-decades of the yield curve and how it relates to the business cycle and equity market performance. I found there have been 12 inversions since the 1950’s. Importantly, during these occasions the inversion was shown to have preceded the eventual recession by a wide range of between seven to 25 months, with an average lag of 14 months. What is more important is my research shows based on news articles for each of the 12 previous inversion cycles, the narrative of a soft or no landing thesis was prevalent. Upon conclusion of the cycle these narratives were proven incorrect .” In my trading room I constantly rail against CNBC. Nowadays they only serve as a mouthpiece for money managers talking up their books or interview anyone with an incorrect, albeit intelligent sounding narrative. Very little push back from the hosts...(ahem, I mean entertainers). As I have mentioned many times to my members, I’ll never know what the catalysts are that tend to fulfill on my analysis…however, they tend to show up on time. But as an Elliottition, I’m fascinated by the behavior of large crowds, and when they act in a manner that the EWT analysis forecasts…it never gets old. To this day, I’m still blown away on how price can go directly to a particular Fibonacci level and reverse, or bounce. On Friday we hit a dozy of a Fibonacci level in the indices, and this upcoming week, we should have a front row seat to witness just how bad it is. But in a broader context I find myself asking the question. If the market has told its participants in 12 of the past 12 cycles that a particular outcome has happened, why would market participants choose to ignore this one? Equally baffling, why would the same narratives be resurrected to validate the flawed perspective? I simply do not have answer. However, I must offer my most gracious thanks to those crowds of traders who continue to act in a manner that defies rational thought…. Nonetheless, is highly forecastable. I thank you irrational traders. My family thanks you…and on behalf of many of my members…keep doing what you’re doing. Rock on. Best to all, Chris
CME_MINI:ES1!Short
by maikisch
11
S&P500 Buy signal within the Bullish Megaphone.The S&P500 index (SPX) is attempting to stage a rise after hitting the bottom of the Bullish Megaphone. This is after the formation of the Golden Cross on the 4H time-frame, the first such pattern since March 31. In addition, the 4H MACD just formed a Bullish Cross below the 0.0 level. This is a strong combination of bullish signals for the medium-term. As long as the Higher Lows (bottom) of the Megaphone hold, we are bullish, targeting 4640 (Resistance 2). If it closes a 4H candle below the Higher Lows, we will close the buy and open a sell instead targeting the 1D MA100 (yellow trend-line) at 4375. If after an initial rebound, it gets rejected on either the 4H MA200 (orange trend-line) or 4H MA50 (blue trend-line), we will re-sell and target the 1D MA200 (red trend-line) at 4220. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
CAPITALCOM:US500Long
by TradingShot
4
Trading Plans for FRI. 09/08 - Back to the Basics - Day 2S&P 500 INDEX MODEL TRADING PLANS for FRI. 09/08 As we wrote in our trading plans published yesterday, Thu. 09/07: "The index failed to close below 4450 yesterday, but showed continued weakness. The price action in the pre-market session after the Initial Jobless Claims is showing the potential for further weakness to develop. The retail positioning and the retail sentiment reinforce our view for a downward push to follow in the coming days. Rising yields are renewed concern for the bulls". This bias is still applicable for today. Our models are sporting outright bearish bias for positional trades while the index is below 4470. The index has to close above 4507 for our models to abandon the bearish bias. Aggressive, Intraday Trading Plans: For today, our aggressive intraday models indicate going long on a break above 4483, 4472, 4459, 4455, 4444, or 4436 with an 8-point trailing stop, and going short on a break below 4480, 4468, 4448, 4441, or 4434 with a 9-point trailing stop.  Models indicate explicit long exits on a break below 4457 or 4453, and short exits on a break above 4450. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 09:31am EST or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #softlanding, #risingyields, #initialjoblessclaims
SP:SPX
by TradersAIDotCom
Trading Plans for THU. 09/07 - Back to the BasicsS&P 500 INDEX MODEL TRADING PLANS for THU. 09/07 As we wrote in our trading plans published yesterday, Wed. 09/06: "In this morning's session so far, markets continue to be listless with the bias sliding towards mildly bearish. Nevertheless, bears need to wait for a confirmation before taking any positional shorts - a daily close below 4450 today might give that confirmation". The index failed to close below 4450 yesterday, but showed continued weakness. The price action in the pre-market session after the Initial Jobless Claims is showing the potential for further weakness to develop. The retail positioning and the retail sentiment reinforce our view for a downward push to follow in the coming days. Rising yields are renewed concern for the bulls. Our models are sporting outright bearish bias for positional trades while the index is below 4470. The index has to close above 4507 for our models to abandon the bearish bias. Aggressive, Intraday Trading Plans: For today, our aggressive intraday models indicate going long on a break above 4490, 4472, 4445, or 4419 with an 8-point trailing stop, and going short on a break below 4488, 4468, 4457, 4442, or 4415 with a 9-point trailing stop.  Models indicate explicit short exits on a break above 4459. Models also indicate a break-even hard stop once a trade gets into a 4-point profit level. Models indicate taking these signals from 09:31am EST or later. By definition the intraday models do not hold any positions overnight - the models exit any open position at the close of the last bar (3:59pm bar or 4:00pm bar, depending on your platform's bar timing convention). To avoid getting whipsawed, use at least a 5-minute closing or a higher time frame (a 1-minute if you know what you are doing) - depending on your risk tolerance and trading style - to determine the signals. (WHAT IS THE CREDIBILITY and the PERFORMANCE OF OUR MODEL TRADING PLANS over the LAST WEEK, LAST MONTH, LAST YEAR? Please check for yourself how our pre-published model trades have performed so far! Seeing is believing!)  NOTES - HOW TO INTERPRET/USE THESE TRADING PLANS: (i) The trading levels identified are derived from our A.I. Powered Quant Models. Depending on the market conditions, these may or may not correspond to any specific indicator(s). (ii) These trading plans may be used to trade in any instrument that tracks the S&P 500 Index (e.g., ETFs such as SPY, derivatives such as futures and options on futures, and SPX options), triggered by the price levels in the Index. The results of these indicated trades would vary widely depending on the timeframe you use (tick chart, 1 minute, or 5 minute, or 15 minute or 60 minute etc.), the quality of your broker's execution, any slippages, your trading commissions and many other factors. (iii) These are NOT trading recommendations for any individual(s) and may or may not be suitable to your own financial objectives and risk tolerance - USE these ONLY as educational tools to inform and educate your own trading decisions, at your own risk. #spx, #spx500, #spy, #sp500, #esmini, #indextrading, #daytrading, #models, #tradingplans, #outlook, #economy, #bear, #yields, #stocks, #futures, #inflation, #recession, #softlanding, #risingyields, #initialjoblessclaims
SP:SPX
by TradersAIDotCom
SP500 Is In A Higher Degree CorrectionSP500 has been bullish most of the year; a trend that can resume after a corrective pullback that is underway now, seen in wave 4 on a daily chart. However, wave 4 should then be made by three waves before correction can come to an end; which is not the case yet, as the recent bounce to 4492-4543 resistance area looks like a corrective wave, ideally wave (B), so be aware of more weakness after recent turn down. Ideally, wave (C) of 4 is now underway towards the lower side of a summer range. If wave (A) low is not going to be broken then wave four can also become a triangle rather than deep A-B-C drop.
CME_MINI:ES1!
by ew-forecast