S&P has serious problems with nested bearish structures
My favorite ticker to track the S&P is SPXUSD as it gets you a whole lot more data on the price action than other tickers with the main draw back that you cannot get any volume confirmation. But due to the cleanliness of the price action these nested bearish structures are very apparent.
From late April to a few days ago SPXUSD was in a very beautiful orange head and shoulders that broke down to target with slight over performance. Since then price action has returned to the neckline of the orange head and shoulders and the market is deciding if it is going to flip previous support into resistance. Given the orange head and shoulder set up it is my assumption that it is more probable than not that the blue head and shoulders will be validated and perform. The orange neckline will confirm as resistance and price will test the neckline of the blue head and shoulders.
Now on to the black lines and target area. This large formation was part of my linked idea about a very disturbing fractal developing in the S&P. These two head and shoulders are tied into a 30 week long rising wedge.
My gut tells me this won't end well. Here is a general trend of some price action pukes over the last couple of years using SPY so we have some volume data. Even through we had a significant pull back the green arrows show OBV was still tracking the price, This divergence hits at a worse dump than the Covid dump, but I don't have any hard and fast justification for that suspicion at this point.
I suspect soon SPX/SPY/SPXUSD see a move down and the OBV will break the OBV bollinger band. All this predicts futhark price puking. I have some slightly out of the money SPXU calls that expire in a couple of weeks.
From late April to a few days ago SPXUSD was in a very beautiful orange head and shoulders that broke down to target with slight over performance. Since then price action has returned to the neckline of the orange head and shoulders and the market is deciding if it is going to flip previous support into resistance. Given the orange head and shoulder set up it is my assumption that it is more probable than not that the blue head and shoulders will be validated and perform. The orange neckline will confirm as resistance and price will test the neckline of the blue head and shoulders.
Now on to the black lines and target area. This large formation was part of my linked idea about a very disturbing fractal developing in the S&P. These two head and shoulders are tied into a 30 week long rising wedge.
My gut tells me this won't end well. Here is a general trend of some price action pukes over the last couple of years using SPY so we have some volume data. Even through we had a significant pull back the green arrows show OBV was still tracking the price, This divergence hits at a worse dump than the Covid dump, but I don't have any hard and fast justification for that suspicion at this point.
I suspect soon SPX/SPY/SPXUSD see a move down and the OBV will break the OBV bollinger band. All this predicts futhark price puking. I have some slightly out of the money SPXU calls that expire in a couple of weeks.
Comment:
Well, it seems the blue head and shoulders has clearly been invalidated. The first ornage one still performed and it remains to be seen if the wedge will perform.
And I promise every Floridian that you will all be rich... because we're gonna print some more money! Why didn't anybody ever think of this before?
~Nathan Explosion
~Nathan Explosion
