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S&P500 - WHAT DOES THE HIGHER TF?My analysis today deals with how the further course of our most popular stock index "S&P500" could look like. The DXY / USD has a non-negligible impact on the S&P500, as the whole economy depends on its behavior. > Meanwhile, this seems to take run-up, for a final upswing, which could bring the S&P500 under massive selling pressure. > Regardless of this selling pressure coming from the USD, a divergence has formed on the MACD + RSI indicators in the S&P500 weekly chart, forecasting a rising S&P500 / falling USD. Below, the analysis goes into detail so that you are aware of the significant levels and areas. For this I have carried out a "MULTI-TIME-FRAME" analysis, which refers to the higher time units (month & week) and thus makes the big picture visible. Normally, all time units below "1h" are called noise, but even a - 1h-4h - analysis is of no use to you, if the knowledge about the big and whole is missing. > We traders know that nobody can predict the future, and that's exactly why you have to be prepared for all initial situations. > If the DXY should rise again, it means "BLOOD" for the traditional and crypto markets. > This creates dangers, but also opportunities - it is important to look at the big picture. > I have explained in detail which levels are RELEVANT in the following pages. . Table of contents 1st part = INTRODUCTION 2nd part = TECHNICAL ANALYSIS = Monthly - Time frame = Weekly - Time frame 3rd part = CONCLUSION PART ONE "INTRODUCTION" After the "S&P500/USD" formed a top at last year's turn of the year, a strong sell-off is subsequently unleashed. > This sell-off paused in October|2022 to test the strength of it. > The two following bullish monthly candles, were interrupted with a "bearish engulfing", - this adds further selling pressure to the index. > That we can expect a price explosion, thus moves further into the distance - however, this is not excluded, for the following reason: = The weeks MACD + RSI, show since October last year, a bullish divergence. > Once you look at the DXY (USD index) on the higher time levels, the further sell-off in the traditional markets, however, becomes more likely. (My DXY analysis is linked below this post, for confirmation purposes.) SECOND PART TECHNICAL ANALYSIS For the analysis of the higher time levels I proceed according to the onion-skin principle. > MONTHLY - Level > WEEKLY - Level > DAILY - Level These are divided into > SUMMARY > CHARTS The charts and fibs are presented in logarithmic scaling, as the given information can be visually presented in a more harmonious way. 1. MONTHLY – TIME FRAME SUMMARY The trend channel shown in the chart formed in March|2009 and has since been able to take a stand as a legitimate trend channel. Its mid-trend line showed reactions when confronted and was respected by the market. > The price is in the area below the middle line and had recently touched it. > In the last 3 months, the price ran up to the middle line, but was not strong enough. > The trend arc is another support, which should be considered for a future sell-off. > The downtrend line, was respected and needs to be broken + tested before a "rally". If we go into more detail about the "SUPPLY & DEMAND" zones, you can look at two "DEMAND" zones on the chart. > The "DEMAND" zone 1, is WEAK, because it is a RBR (Rally-Base-Rally) and was already tested by the course in October. > The "DEMAND" zone 2, is VERY STRONG, because it is a DBR (Drop-Base-Rally) and has not been tested by the price yet. The Fibonacci retracements should serve us as additional confirmation and were taken into account in past movements (last decades). > Should the price fall further, FIB 1 (0.88 FIB) will serve as resistance. Although due to the previous testing of the 0.786 FIB, the resistance will be crumbling. > If the sell-off continues, FIB 2 (1.618s FIB) will be the first point of contact for the price and in combination with the arc, can trigger a reaction on the "smaller" time levels. > The FIB 3 = 0.618 - 0.88 FIB level, in combination with the FIB 4, will trigger the biggest resistance reaction in the market, should such a strong sell-off occur. The past highs and lows usually serve as resistance / support, one of which we have. > HIGH | 02/20 - Already showed reactions = Future support A level of interest is before us, which since 2018, plays a strong role for the market. > This support, represents the drawn - POI (2,950 USD), which at the time of this analysis, is still far from the price. CHARTS S&P500 – Overall picture S&P500 – Overall picture without trendlines ATTENTION In the following time levels, I will only deal with the NEW, added elements. 2. WEEKLY – TIMEFRAME SUMMARY Besides the already mentioned trend channel, further trend lines become visible in this one. - These have caused reactions in the channel in the past and should therefore be kept in mind. (gray) The monthly "SUPPLY & DEMAND" zones are joined by others from the weekly view that coincide with other resistance / support elements. - The near "DEMAND" zone has low significance as it has already been tested once by the price. As other Fibonacci additions, we have two more elements: > Both newly drawn elements refer to a possible upward movement. > If there is an upward movement of fundamental magnitude, these levels will be updated again. CHARTS S&P500 – Overall picture S&P500 – Overall picture without trendlines THIRD PART CONCLUSION "The calm before the storm " Before a thunderstorm breaks out, it suddenly becomes very quiet - currently it is unusually STILL | seen from a macro- and microeconomic perspective. > Will the calm be broken by a sharp sell-off, or by a price explosion? In summary, based on technical analysis, there are strong reasons for a falling S&P500 price. > Since the price top in Jan|2022 - every monthly - Bullish candle, was completely Bearish engulfed. = Which leads us to conclude a very strong sell-off. > The divergence on the weekly level, which indicates a price upswing, should be kept in mind - but this is not a reliable indication. For this reason, I am assuming a weak S&P500 and an accompanying bloodbath in the traditional and crypto markets. > Positioning after confirmation of this thesis = SHORT If this idea and explanation has added value to you, I would be very happy to receive a review of the idea. Thank you and happy trading!
OANDA:SPX500USDShort
by ZielIstDieAutarkie
Man on the shoulders of giantsIsaac Newton, who turned people's view of the world upside down, once said: "If I have seen further than others, it is by standing on the shoulders of giants". And indeed, each of us has a chance to discover something new for ourselves and others by drawing on the wisdom of our predecessors. I want to say a big thank you to Benjamin Graham, David Dodd, Warren Buffett and Peter Lynch, who openly shared their ideas with the world and inspired more than one private investor in their first investments. I'm sure Mohnish Pabrai will join me in saying the same. Born in Mumbai, an engineer by training, he had no interest in the subject of stock investing until he was 30 years old. But by chance, after reading a book by Peter Lynch, he began to study the subject more deeply. Centimeter by centimeter he climbed the shoulders of the giants of value investing to see hitherto unknown horizons. He is now known as a successful investor, author of books on investing, and creator of incredibly kind philanthropic initiatives. Listening to Mohnish Pabrai's lectures, I noted his ideas, which in many ways coincide with my own. I am happy to share them with you: 1. The market is always concerned about what will happen to the company in the future, so it cannot be 100% efficient (*). (*) Let me remind you that according to "efficient market" theory, a company's current price reflects its "fair value" because any publicly known information instantly affects the price. Thus, an investor is unlikely to make a profit on any information, such as a company's strong financial statements, because the market has already reflected the event. However, this theory does not take into account the future, which we all think about every day and act in the present, including the market, based on those thoughts. For example, someone may think that a company's future is murky because of the news that has come out. This concern will be picked up by the crowd, and the stock will go down. Or on the contrary, the success of the company may be perceived as over-optimistic, and a real stir will start around the stock. No one knows the future, but thinking about it affects the present. For this reason, the current price of the company may not reflect its fair value, contrary to the "efficient market" theory. 2. Continuing with the first thought, the waves of pessimism and optimism will always be present in the market. They distort a company's value so much that they give us private investors a chance to buy and sell a company's stock profitably. 3. The more time you spend analyzing a company, the more you "fall in love" with it. Try to grasp this idea. After all, by spending a lot of time studying something, such as a company's excellent financial statements, we set ourselves up for what it must pay off as a profitable investment. Remember: the market doesn't owe you anything. 4. Often the decision to invest in a company can be made based on just a few surprising figures. For example, if the value of a company is equal to 50% of the amount of cash in its checking account. Mohnish Pabrai said that Warren Buffett used a reference book with the statements of thousands of companies, not to spend months studying each of them, but to find something that would really surprise him. 5. Mohnish Pabrai admitted that he has never once played the short and has no intention of doing so for the rest of his life. His math is really simple. If you play the short by selling a stock at $100, your maximum earnings are capped at $100 (which will happen when the stock drops to zero). Whereas a buyer of a $100 stock has a chance to sell it at both $1,000 and $2,000. There is no upside restriction by its very nature. 6. And the thought I want to conclude this post with is don't look for people to hand you a treasure on a platter. Looking for treasure is much more interesting! It's about not trying to replicate someone else's trades or portfolio positions. Try to make your own decisions. Try to see your horizon. The unwavering shoulders of giants will help you in all of this.
SP:SPXEducation
by Be_Capy
S&P 500 WEEKLY ChartThe S&P 500 has been trading in a falling parallel channel since December 2021. It is now trading at the top end of the channel, on past three occasions it has corrected for weeks once reaching the top end of the channel. But on this occasion the MACD & RSI both are showing positive divergence on the bottoms formed in the months of June and October. Consider a long position on S&P 500 at or below the price of 4100, with a stoploss of 3900 The target for this trade is the length of the channel which is 4800 Time frame for this trade is 4-6 weeks
TVC:SPXLong
by SilentTrader871