S&P 500 Quad Top

20 Şub 2019

The S&P 500 has had a historic rally since December, but its time is running out. Previous tops in Oct, Nov, and Dec were all rejected around 2800. 2800 will be significant resistance, especially with the index so over extended. Additionally the rally is running in a huge ascending wedge with its terminal apex just over 2800. This top is so obvious, it makes you wonder if it's too obvious and couldn't be right. But this time I think the obvious top will be the top.

2800 is less than 1% from these levels, so not much farther. It might not make it to 2800 or it might run up and break over for a few days. But IMO I don't see the market getting much above 2800. The fed minutes or a trade deal might be all it takes to push the index to 2800... but then what? Glug, glug, glug.

It could mess around for a number of days before it fails--wait for a break of the wedge to short.

Entertainment only, not financial/investing advice.

21 Şub 2019

İşlem aktif

A bar on the one hour chart (and every time frame less than that) has now closed below the wedge. I'll call that a breech and say the trade is open.

22 Şub 2019

Not

The daily bar closed below the wedge (though it's close and depends on how you draw it).

Bulls are fighting to hold it up so far, but it's a losing battle. Looking around at other ideas, I can see 2800 is even more significant than the points I mention:
- 2800 is also reversal highs in Feb, March, and June of 2018.
- If you take a weekly chart starting in 2009 and connect the lows to make a rising trendline, you'll find the trendline hits 2800 right where we are today showing we're at a resistance line that goes back 10 years.

22 Şub 2019

Not

Bulls don't want to give up and are running it up to recent highs. However the wedge channel is so steep that even with the move this morning so far it hasn't broken back into the wedge.

We'll see how it closes, but it seems the market wants to push off any significant breakdown into next week. I'll watch and see if I should close the trade and look for a better entry next week. The close will be key--if the bulls can put the S&P back up into the wedge and hold it into the close it's probably best to stop out the trade.

22 Şub 2019

Not

Yesterday's entry was clearly a fakeout as there was no follow-through, but I'm going to keep the short open for the weekend. Momentum keeps dropping and despite today's move up, it wasn't able to hold in the wedge channel. I expect the market will continue to grind higher (more and more slowly with the falling momentum) as it seems to need something... to hit 2800, the trade war to end.. something.
But there's also a non-zero chance of more down moves that would' just whipsaw me if I was to get out now just to try to get back in next week. So I'll let it ride for now.

25 Şub 2019

İşlem aktif

Broke over 2800 today on the trade war "news." So far we've run right up to my red resistance line and have now fallen back slightly. I think this is the final, final, final move up. I've been wrong too much on this rally, but to stick my neck out once more--I think we either sell off into the close today or we hold more or less flat today and start dropping tomorrow (making a doji candle pattern).

This rally has been insane. Historically insane. I read something yesterday that we've only been this far extended over the 50 day MA twice in history, and both times there was around a 10% drop once the market turned. I suppose things could always get crazier, but today looks like the epitome of low risk / high reward entry.

1 Mar 2019

İşlem aktif

Rejected hard over 2800 AGAIN this morning. The market knows it has topped, but there's a lot of stubborn bulls that want to lose more $$ before they give up.

4 Mar 2019

İşlem aktif

The red line resistance was violated briefly this morning but was quickly sold back under. Selling is now accelerating. Might this FINALLY be the turn?

7 Mar 2019

Not

HItting the 200 DMA (which we did this morning) was a conservative target for taking profits. But it took months to rally up to this bear market rally top, so it seems a bit soon to take profits. I wouldn't be surprised to see a decline break the Dec lows, or at least test them. So this trade stays open ffor now.

Entertainment only, not financial advice.

20 Mar 2019

İşlem aktif

This is a good place to close this short right here back at a retest of the resistance line for a small loss. I'm going to hold it open though--I still think the bull is done and we're eventually headed lower.

Entertainment only, not investing advice.

22 Mar 2019

Not

Broken back under the red line on strong selling. Let's see how we close.