The SPX traded down for yet another week. Finishing -2.9% for the week after trading in a 200 point range. To begin October price is sitting below the June 17th low, but still above the longer term 382 Fib. There is an h pattern in play which simply means price is has come back into key support setting up a potential reversal and short squeeze on any unforeseen positive news as traders are likely net short and positioned for a big drop. NINE 21 methodology does not confirm a break down until the 1.13 FibX is broken. A break below the 1.13 FibX however would be very bearish and likely lead to a panic sell off targeting the 2020 Peak. Below are a few points I'm considering.
• Price below June 17th low but above the HTF 382 Fib RT
• h pattern in play = short squeeze zone vs panic sell off
• Watch false breakdown zone for hard reversal
• RSI still above 20 = more downside potential
• VIX still below 36 = below max fear
• Break of 1.13 FibX negates bullish harmonic
• 2020 Peak in play below 1.13 FibX on panic selloff
• Early Oct still weak period for stocks
• Seasonal strength period for SPX begins Oct 28
• High bond yield & USD strength remain key data point
• Markets need new information to rally.
• Non-Farm Payrolls wrap up week
WEEKLY EVENTS
Monday US ISM Manufacturing & Fed heads speak
Tuesday US Factory orders, US JOLTS, Fed Heads
Wednesday US International Trade, US ISM Services PMI & US EIA Crude
Thursday ECB Meeting Minutes & US Jobless Claims
Friday US Unemployment Rate & Non Farm Payrolls
NOTABLE EARNINGS
Monday Nothing Notable
Tuesday Nothing Notable
Wednesday HELE
Thursday STZ, LEVI, CAG
Friday TLRY
BULLISH NOTES
Oversold conditions
Still above longer term 382 Fib RT
RSI at 29
Max bearish sentiment = Short covering rally possible
Potential dovish commentary from Fed heads + Powell
Potential positive reaction to economic Data
Still in bullish harmonic reversal zone
Potential new month inflows
Potential drop in USD & bond yields
BEARISH NOTES
Below June 17th pivot low
Below 9/21/55 emas
Max bearishness = self fulfilling prophecy syndrome
Potential Hawkish commentary from Fed Heads + Powell
Potential negative reaction to economic data
Potential failure of 1.13 FibX = panic sell off
2020 Peak within striking distance
Historically strong period for S&P doesn’t start till Oct 28th
USD at 20 year high & 10 year yield touched 4%
• Price below June 17th low but above the HTF 382 Fib RT
• h pattern in play = short squeeze zone vs panic sell off
• Watch false breakdown zone for hard reversal
• RSI still above 20 = more downside potential
• VIX still below 36 = below max fear
• Break of 1.13 FibX negates bullish harmonic
• 2020 Peak in play below 1.13 FibX on panic selloff
• Early Oct still weak period for stocks
• Seasonal strength period for SPX begins Oct 28
• High bond yield & USD strength remain key data point
• Markets need new information to rally.
• Non-Farm Payrolls wrap up week
WEEKLY EVENTS
Monday US ISM Manufacturing & Fed heads speak
Tuesday US Factory orders, US JOLTS, Fed Heads
Wednesday US International Trade, US ISM Services PMI & US EIA Crude
Thursday ECB Meeting Minutes & US Jobless Claims
Friday US Unemployment Rate & Non Farm Payrolls
NOTABLE EARNINGS
Monday Nothing Notable
Tuesday Nothing Notable
Wednesday HELE
Thursday STZ, LEVI, CAG
Friday TLRY
BULLISH NOTES
Oversold conditions
Still above longer term 382 Fib RT
RSI at 29
Max bearish sentiment = Short covering rally possible
Potential dovish commentary from Fed heads + Powell
Potential positive reaction to economic Data
Still in bullish harmonic reversal zone
Potential new month inflows
Potential drop in USD & bond yields
BEARISH NOTES
Below June 17th pivot low
Below 9/21/55 emas
Max bearishness = self fulfilling prophecy syndrome
Potential Hawkish commentary from Fed Heads + Powell
Potential negative reaction to economic data
Potential failure of 1.13 FibX = panic sell off
2020 Peak within striking distance
Historically strong period for S&P doesn’t start till Oct 28th
USD at 20 year high & 10 year yield touched 4%
Comment:
Bouncing off the open. Has broken through the downward trendline of 1H. Would expect a re-test of the lows before heading higher. Fed heads due to speak at 1145 est may be key.
Comment:
Broke through the trendline and is now above the 9 ema and at pivot resistance (red arrow. Chart shows targets/resistance above and the zone the should provide support. Potential for hard reversal back down at any time.
Comment:
After breaking the Sept 28th pivot price moved straight up to the resistance/target zone and the 21 ema. Price has pulled back overnight and is likely to test the 9 ema. The 9ema should provide support if not look for at least 50% retracement of the recent move up. Re-test of recent lows still possible.
Comment:
Same post at NQ except the ES found support at the 9 ema. Price bounced into the 21 ema and is now pulling back. Key levels are the overnight high and the overnight low today. A break higher puts the 55 ema in play. A break lower puts the LTF 618 Fib in play.
Comment:
Market chopped sideways to down yesterday into NFP. The reaction has been negative to the data this morning. Move down to 618 Fib is now likely. Cash session is key. On a break of the 618 Fib below the recent lows are in play. Conversely a reclaim of the 9em would be bullish.
Comment:
At the 618 target. Break below takes us to the June 17th low. On a reversal from the 618 I would be targeting the mid area of the daily range.
