Bears! This is Sparta! SPY 300

Hear ye hear ye! Thy SPY chart needeth to drop down to 300. Okay, enough of that. SPY is likely headed down from here and here’s why: For starters, the weekly MACD has had a signal cross failure which is something I’ve been on the look out for since May per the linked idea below. This MACD red alert following on the heels of a head and shoulders with a neckline retest is a recipe for disaster. Okay I’m sounding like Peter Schiff now. Another consideration is the blue channel pair which price has dropped out of. This channel pair is fairly respected going back to 2014 and a break out from it as substantial as the one we’ve experienced this week is sort of a big deal. There is an orange channel which was more relevant in the past but doesn’t seem to be respected as much post-2020. It may serve as support around 357 but I don’t think it will hold based on the above mentioned bearish manifestations. We shall see. There is a green trendline going back to 2011 which looks like the most logical support. I had drawn in some other trendline candidates but they all fell below this level, were not as good, and cluttered the chart, so they were removed. Price falling from here reaches the trendline around $300 which is the price target. There is an AI-generated image of a bear wearing a spartan helmet in the lower-right hand corner. The technology will improve with time, I’m sure.

I’m short futures from the current level ($367.95) over the weekend with a stop 1.5% north of here per the MACD idea mentioned above and linked below:

Trade active:

Trying times my fellow bears. SPY rallied from below the June lows to close at +1.97% today. I think the treasonous hunchback may have guided the enemy behind our flank. Either that or the Bank of England panicked and announced an emergency action of buying 30 year treasuries again rather than selling them like they had claimed they would because the bond market has become fubar.
The SPY rally came within .25% of my stop and has eased up after hours a little bit for now. If this is the end, it has been an honor fighting alongside you and it will also be an honor getting stopped out alongside you.

Trade closed: stop reached:

The weekly moving average gods have been cruel to me. This weekly macd signal cross failure has had a greater initial drawdown than the previous two which led to the previous two crashes. Therefore, I'm stopped out. The bounce off of the 200-week sma and historical pivot high was predictable, but the extent to which price would bounce was unforeseen. There is a lot of speculation driving this bounce; a Q4 bounce, October seasonality, Fed pivoting on interest rates and QT, but this all could have happened last Wednesday, as the Bank of England pivoted at that point and a 2% rally was the result with October being 3 trading days away. Fundamentally, nothing has changed since then imo other than news that Credit Suisse was under threat which has came and went. The only think that changed is that we tagged technical support, the month changed to October, and the quarter changed to Q4 (correct me if I'm wrong). I was already leaning toward the belief that the only things that consistently matter are monthly moving averages, weekly moving averages, daily moving averages, trendlines, channel lines, price patterns, time cycles, and lateral support. This bounce solidifies that belief, particularly the moving average part. What have we done over the past 50 trading days? We tagged the 200-day sma after a major rally, dumped 17%, then bounced off of the 200-week sma. That's what it really boils down to. If anyone lost money following this idea, my apologies, I'm with you. I'd still say it wasn't a bad idea, but it just didn't pan out. I'm still leaning bearish until the weekly MACD turns yellow again and I'll turn bull if it turns green. I still think the weekly MACD is a good indicator to watch and that signal cross failures are important on many timeframes, particularly the weekly and the 15-min. I wouldn't stand in the way of this rally any more than I already have though, the market is erratic right now so I'll be on the sidelines for a bit.

total damage = 3*(3760.5 - 3705)*50 = -$832.5

Comment:

Any bears still lurking out there, next week could be your time to shine. Another bad week will likely yield a double cross of the MACD from green to red which is a rare, extremely bearish sell signal that is so rare I haven't even mentioned it until now and I'm only mentioning it because it's about to happen. I know I'll be putting my bear spartan helmet back on if come Friday at the closing bell the weekly MACD has a double cross.

There are also reasons to be bullish at these levels. Treacherous times.