alanmasters
Short

S&P 500 Index Will Crash To 2400 Sooner Rather Than Later

SP:SPX   S&P 500 Index
S&P 500 (SPX) has been maxed out for a while now, and I am quite bearish on this index as you might already know from my previous analyses.

The reason I am bearish is because of the signals that I getting from the above chart. So come and read these signals with me, and later share in the comments section and tell me what you think... Let's get started!


S&P 500 Index Prints Additional Weakness

Our main focus for signals in past analyses was mainly a bearish divergence on the MACD and RSI , but now additional weakness is showing up:

  • On the chart above we can see how the ~2815 level, marked with a purple dash line, has rejected the SPX over and over in a 1,2,3 sequence. On the 13 March, the SPX had its third (sixth) rejection from this resistance after the bounce.

  • We can see decreasing trading volume , which is a signal that points to lack of momentum for the move that is in play.

  • The daily candle for the 13 March hit a high at 2821.24, making it higher than the peaks of the 25th Feb. and 4th March. But when you look at the MACD , you can see it going lower and lower; here is the bullish divergence once more. The same can be spotted on the RSI .

In a nutshell, we have a triple top, decreasing volume and strong bearish divergence.

According to the signals above, the SPX will make a strong down move soon. For these signals to be invalidated, the SPX needs to print a high volume candle above 2821 and follow up by breaking its all-time high.

What's your take on the next S&P 500 Index move?

Hit like for more great content and to show your support.

Thanks a lot for reading.

Namaste.
Comment: Update:
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Thanks for your latest update. I think it is wise to keep an open mind about two main possibilities. I know loadsah people wanna short this market - me too. But there's too much going on at the moment. Too many conflicting variables in the geo-political and international trade dimensions. Add to the equation, the flattening yield curve, working hard against that secret war chest of stock-buyback money which may not come to an end until some time in April 2019.
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alanmasters Captain_Walker
@Captain_Walker, Yet the bearish signals are only becoming stronger.
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alanmasters Captain_Walker
@Captain_Walker, Yet the bearish signals are only becoming stronger.
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@alanmasters, Sure. I saw similar happening with the Indian Markets, which I was seriously looking to short when showing similar weakening. Then it busted north like a bat outta hell! I'm not saying what happens in India is bound to happen in America. I'm just saying that an obvious weakening has to be taken in context of the trend.

Weakenings don't really mean that much i.e. it doesn't mean it's gonna just roll over like what happened in late 2018 (though, I'd very much like that as I wish to be short). In a bull trend there are always hidden bulls waiting for a retreat of price. They're looking for good price based on their own positions.

I've been weighing up loads of variables - and there is no neat equation to work out what's what. Join me. (I know Wall Street is not the S&P500).

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Yep reputable reference in hand on what the FED is about to do - so watch out (can share by PM only).

As I was saying somewhere, QE is good for America cuz:
1. The US dollar is likely to be run down
2. Which is good for the US Markets.

So Powell is expected to 'print' more and reduce interest rates, one giant gift package. This is not my expectation or prediction. It is reputable speculation elsewhere.

That means that the FED saves the markets from catastrophic crash - though the FED has said their objective is not to do the latter. Indirectly though, if markets crash this puts the economy into a tailspin and possibly heralds a recession (think 2008 - which is what they wanna avoid). So - I think they're not gonna allow that. If it means printing more money, they'll do it.

Of course speculation is speculation - and Powell could well do the opposite of what is expected.


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Soon? How soon? 😁 😂🤡
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Market price movement feels pretty dead at the open on Sunday night, compared to previous Sundays. Not sure if that means anything. Price has gapped down a little on 15 min time frame and so far at 23:01 UK time has not got close to closing the gap.
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Digging deeper...
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The fall off in the BuyBack index is more robust evidence - though it predicts nothing - of early resumption of the bear market. (It was bear market because a >16% correction in the daily price had happened. This is the most widely accepted definition - and of course not 'everybody' will agree).

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Many of us are looking (or perhaps hoping for a crash), as we'd like to be short.

I don't see very strong fall off in volume. Yesterday 15th March, saw a good pulse in volume which could well be due to the Plunge Protection Team or some effect related to them. I can't imagine middle America ploughing into a market teetering on the edge of a precipice. But maybe middle America has lost its senses - I don't know.

Some are not aware of the $21 Trillion missing from the US Economy (not included in the $22 Trillion national debt). Could some or all of that be the secret war chest of cash that the big boys in the background are using to manipulate the market?! It's anybody's guess, because nobody is entitled by law to have their inquires about missing Trillions, addressed.

S&P


27000 on Wall Street is still possible.

Look deeper. As I hope people know, the money printing presses have been turned up in many countries (when they were supposed to be throttled back. Watch Europe for example). Money printing isn't just happening at a Central Bank level - and people need to read up how that happens by alternative means. The FED has decided to relax on interest rates. But wait - what is the effect on the S&P (and Wall Street) of the money printing? Simple - the US-Dollar 'devalues' relative to others. And - so what next - the usual i.e. indices becomes bullish. This is almost a constant (in the broad brush) across all stock indices (meaning there are minor short term exceptions).

So if anyone is with me on the above, the above is very a bullish pressure-effect. Of course, I'm not saying that the market isn't a house of cards. What I am saying is, don't underestimate the effect of 'political interference' in the markets via the back door or even the front door. Powell et al, are in effect trying to glue each card they put in the 'house'. I don't think it'll work in the long run, but at least in the short run it may work to prevent catastrophic collapse, which is their main objective. In other words your big boys, are probably hoping to glue and unglue the sorry mess as they please - by not allowing true market forces to dominate.

Let's avoid groupthink on this. Address the hard evidence on the technicals - and fundamentals in the background.

Declaration: I was definitely bearish on S&P and Wall Street. Now the evidence confronting me has to put my original position into doubt, perhaps a bit too late. This doesn't mean I'm personally bullish either, nor do I predict the market will not crash soon.

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