S&P 500 DROP expected = 3900-4000 ZONE after small POP to ~4500!
I have been looking at charts all week and what looked like major rotation from Growth stocks and crypto to "Value" stocks and crypto it appears to now not be the case.
MAJOR Supports zones were broken in just about EVERY sector in stocks and just about EVERY crypto out there except $ADAUSD and $LINKUSD which are not far off from breaking their support as well.
I am expecting there to be some news from the FED next week that may bouy stocks and crypto to bounce up to the $4500 level in S&P 500 and possibly $43-$46K level in $BTC before I think there will be HEAVY resistance at those levels. I would expect a DROP to the 3900-4000 range in S&P and possibly retest $28k in $BTCUSD. I am posting this S&P chart but the BTC chart looks similar except that it had the massive double top everyone has been watching. Cryto has been a bit of a LEADING indicator on the stock market but they have been correlated for the most part so I am showing why I think there will be at least another 10%-12% drop in stocks before they get major support. Crypto has led the way down and I would expect to bounce before stocks do.
The Chart pretty much says it all but EMA 39 has acted as support and resistance every time over last several years and I woould expect it to do the same now. Resistance is at ~4500 in S&P 500 and the LAST time this sort of "tightening" occurred in 2018 the chart looked eerily similar with a 20% drop from the highs. Coincidentally a drop to 3900-4000 zone woud be about 21% DROP from recent highs.
Trade what you see...
MAJOR Supports zones were broken in just about EVERY sector in stocks and just about EVERY crypto out there except $ADAUSD and $LINKUSD which are not far off from breaking their support as well.
I am expecting there to be some news from the FED next week that may bouy stocks and crypto to bounce up to the $4500 level in S&P 500 and possibly $43-$46K level in $BTC before I think there will be HEAVY resistance at those levels. I would expect a DROP to the 3900-4000 range in S&P and possibly retest $28k in $BTCUSD. I am posting this S&P chart but the BTC chart looks similar except that it had the massive double top everyone has been watching. Cryto has been a bit of a LEADING indicator on the stock market but they have been correlated for the most part so I am showing why I think there will be at least another 10%-12% drop in stocks before they get major support. Crypto has led the way down and I would expect to bounce before stocks do.
The Chart pretty much says it all but EMA 39 has acted as support and resistance every time over last several years and I woould expect it to do the same now. Resistance is at ~4500 in S&P 500 and the LAST time this sort of "tightening" occurred in 2018 the chart looked eerily similar with a 20% drop from the highs. Coincidentally a drop to 3900-4000 zone woud be about 21% DROP from recent highs.
Trade what you see...
Comment:
Just updating that this chart is playing out almost exactly as I stated above. We popped to 4591 on S&P 500 before a Bearish Engulfing candle today and w popped up to almost $46k on BTC before HEAVY resistance and we appear to be headed lower.
Comment:
The S&P Futures are showing a pretty ominous sign in my opinion. Not only did we have a Bearish Engulfing candle signifying a reversal, but also we appear to be breaking below KEY support levels. If we break 4460-4463 level tonight expect a rapid move down to 4388 which is the next horizontal support.
Are you SHORT or Neutral this market?? Might want to think about it. I still have downside target price between 3900-4050.
Are you SHORT or Neutral this market?? Might want to think about it. I still have downside target price between 3900-4050.
Comment:
Today is pretty much nothing day as the markets digest yesterdays CPI number.
But there is a MASSIVE Bear Flag that has formed with the downside price target which happens to calculate to EXACTLY 4050 which is again in line with my prior forecast on probable downside target zone.
But there is a MASSIVE Bear Flag that has formed with the downside price target which happens to calculate to EXACTLY 4050 which is again in line with my prior forecast on probable downside target zone.
Comment:
Also realize that we could still bounce higher to about 4700 which would still be within the Bear flag but also setting up a R Shoulder on a massive H&S formation. IF that happens then the downside price target becomes even LOWER at around 3800.
I am giving this as about a 50/50 scenario because most Bear Flags have 4 touches of the extremes of the flag before breaking out. This Bear Flag has only 3 touches so far.
Safe bet is to remain neutral and SHORT on the breakdown of the flag or at the top of the flag around 4700. This would also get all the Perma BULLS back in saying "see we are going to ATH,...Inflation is priced in",...and then the door slams shut.
Trade what you see.
I am giving this as about a 50/50 scenario because most Bear Flags have 4 touches of the extremes of the flag before breaking out. This Bear Flag has only 3 touches so far.
Safe bet is to remain neutral and SHORT on the breakdown of the flag or at the top of the flag around 4700. This would also get all the Perma BULLS back in saying "see we are going to ATH,...Inflation is priced in",...and then the door slams shut.
Trade what you see.
Comment:
Looks like the Market decided based on rumors Russia is about to invade Ukraine.
Either way, truth or not price will need to recover by today's close or early next week or I think 4050 is almost a certainty.
Either way, truth or not price will need to recover by today's close or early next week or I think 4050 is almost a certainty.
