SPX - It might be time to face it [Bearish scenario]
Hello Traders and Analysts,
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged long, due to purchasing further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
A bullish scenario is needed, as well as a bearish, this is a game of patience.
Bullish scenario here:
Master Key for zones
Rolling returns method:
SPX is in need of a correctional Rolling returns - historical data .
Using the base model of 3 year rolling returns,
the simplified explanation of the model shows a 41/50 years have returned a positive growth. As opposed to 6 years of negative returns. With 2020 closing out 16.26% return .
*Note - the 6 years where the rolling return is negative - the dot com bubble only stood to lose 6.2%* Est.
SPX is in need of a correctional move
using the monthly time frame, ideally the monthly close will indicate an array of imbalance with large wicks providing an indicator of a battle with for example a hammer candle, shooting star, doji, or long bodied and legged wick. This will provide a great amount of support of accumulation before an impending distribution from the monthly imbalance.
It's a game of probabilities.
SPX Weekly Bearish scenario
Monthly imbalances
Un-sustained rally
Current picture - where a good Fibonacci short could take the price from a four hour perspective.
3721.XX was always a test zone for me.
A four hour perspective of where price has moved from for the bullish scenario in the short term to a negative risk, however what price is actually doing is testing the monthly imbalance zone where the zone either breaks or rejects. This zone was a good test, however please note - the probability here is building up a profit take for buyers and an imbalance can cause the sellers to take over with the wick on the monthly close of February indicating the inefficiency is present.
Taking a technical approach with the Fibonacci retracement, using the four hour, price has shown the start of the move - gathering a all time high pivot point, retracing to a low, forming the Fibonacci structure. Targets being said for the 3721 - is the imbalance, which is in between the short term Fibonacci retracement extension zones. However, price will test the low, look for a reversion pivot and continue the sell. The probability with be depending on the wick in focus where price has created a shooting start to 3834*.XX.
US Bonds yield curve, accelerating the USD first
U.S. bond yields gauging performance of the U.S. stock market, thereby reflecting the demand for the U.S. dollar in subsequence.
Where investors move away from stocks and other high-risk investments, the new increased demand for “less-risky instruments” such as U.S. bonds and the safe-haven U.S. dollar pushes their prices higher against respective pairs. However, when it comes to the EUR USD - the Euro will show its weakness with the
Remember: A rising bond yield is dollar appreciation. A falling bond yield is dollar devaluation
Mirrors Edge
EXY Vs DXY - looking here at the Euro Currency Index and the Dollar Currency Index, price has established some very defined levels - which have been marked in Purple - Refer to Master key for zone colours.
With the impact of the DXY - the jaws are looking to close here, from a technical standpoint clear fresh movements are foreseeable with the probability of positional holds for Dollar buys and Euro sales based upon the chart. So long as price reverts back to a clear higher low formation on the EUR USD and respectively on the EXY with the DXY creating a defined point of higher lows, then the holds are clear to the imbalances stated.
Cross Analysis;
USD JPY VS DXY VS Debt instruments - Impact
Simplified - U.S. bond yields gauge the performance of the U.S. stock market, thereby reflecting the demand for the U.S. dollar in subsequence.
Where investors move away from stocks and other high-risk investments, the new increased demand for “less-risky instruments” such as U.S. bonds and the safe-haven U.S. dollar pushes their prices higher against respective pairs. However, when it comes to the USD JPY - the Yen will show it's weakness.
Remember: A rising bond yield is dollar appreciation. A falling bond yield is dollar devaluation.
Inflation further analysis:
Keep an eye on the SPX with Inflation ETF vs SPX500 .
If you as a trader are interested in the price ratio of Shiller P/E ratio , the market is at this moment 35.83x, with low inflation at the moment, the bulls are on the run. Watch this space
Gold discounted
See here for the imbalances on Gold . This can help adjust the situation upon the USD.
Why is gold falling? Well simply put volatile situations where the return of XAU maintains no yield, the Dollar however does Yield through interest rates.
Gold will look to fall to level of around $1500 before examining next where the price is to move next.
Do you enjoy the setups?
*10 years combined analysis experience in capital markets
*Focus on technical output not fundamentals
*Position and swing trades
*Provide updates where necessary - with new updated ideas tracking the progress.
If you like the idea, please leave a like or comment.
To all the followers, thank you for your continued support.
Thanks,
Team LVPA MMXXI
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged long, due to purchasing further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
A bullish scenario is needed, as well as a bearish, this is a game of patience.
Bullish scenario here:
Master Key for zones
- Blue = Monthly
- Purple = weekly
- Orange = Daily
- Magenta = 8 Hour
- Grey = 4hour
- Pink = 1 hour
Rolling returns method:
SPX is in need of a correctional Rolling returns - historical data .
Using the base model of 3 year rolling returns,
the simplified explanation of the model shows a 41/50 years have returned a positive growth. As opposed to 6 years of negative returns. With 2020 closing out 16.26% return .
*Note - the 6 years where the rolling return is negative - the dot com bubble only stood to lose 6.2%* Est.
SPX is in need of a correctional move
using the monthly time frame, ideally the monthly close will indicate an array of imbalance with large wicks providing an indicator of a battle with for example a hammer candle, shooting star, doji, or long bodied and legged wick. This will provide a great amount of support of accumulation before an impending distribution from the monthly imbalance.
It's a game of probabilities.
SPX Weekly Bearish scenario
Monthly imbalances
Un-sustained rally
Current picture - where a good Fibonacci short could take the price from a four hour perspective.
3721.XX was always a test zone for me.
A four hour perspective of where price has moved from for the bullish scenario in the short term to a negative risk, however what price is actually doing is testing the monthly imbalance zone where the zone either breaks or rejects. This zone was a good test, however please note - the probability here is building up a profit take for buyers and an imbalance can cause the sellers to take over with the wick on the monthly close of February indicating the inefficiency is present.
Taking a technical approach with the Fibonacci retracement, using the four hour, price has shown the start of the move - gathering a all time high pivot point, retracing to a low, forming the Fibonacci structure. Targets being said for the 3721 - is the imbalance, which is in between the short term Fibonacci retracement extension zones. However, price will test the low, look for a reversion pivot and continue the sell. The probability with be depending on the wick in focus where price has created a shooting start to 3834*.XX.
US Bonds yield curve, accelerating the USD first
U.S. bond yields gauging performance of the U.S. stock market, thereby reflecting the demand for the U.S. dollar in subsequence.
Where investors move away from stocks and other high-risk investments, the new increased demand for “less-risky instruments” such as U.S. bonds and the safe-haven U.S. dollar pushes their prices higher against respective pairs. However, when it comes to the EUR USD - the Euro will show its weakness with the
Remember: A rising bond yield is dollar appreciation. A falling bond yield is dollar devaluation
Mirrors Edge
EXY Vs DXY - looking here at the Euro Currency Index and the Dollar Currency Index, price has established some very defined levels - which have been marked in Purple - Refer to Master key for zone colours.
With the impact of the DXY - the jaws are looking to close here, from a technical standpoint clear fresh movements are foreseeable with the probability of positional holds for Dollar buys and Euro sales based upon the chart. So long as price reverts back to a clear higher low formation on the EUR USD and respectively on the EXY with the DXY creating a defined point of higher lows, then the holds are clear to the imbalances stated.
Cross Analysis;
USD JPY VS DXY VS Debt instruments - Impact
Simplified - U.S. bond yields gauge the performance of the U.S. stock market, thereby reflecting the demand for the U.S. dollar in subsequence.
Where investors move away from stocks and other high-risk investments, the new increased demand for “less-risky instruments” such as U.S. bonds and the safe-haven U.S. dollar pushes their prices higher against respective pairs. However, when it comes to the USD JPY - the Yen will show it's weakness.
Remember: A rising bond yield is dollar appreciation. A falling bond yield is dollar devaluation.
Inflation further analysis:
Keep an eye on the SPX with Inflation ETF vs SPX500 .
If you as a trader are interested in the price ratio of Shiller P/E ratio , the market is at this moment 35.83x, with low inflation at the moment, the bulls are on the run. Watch this space
Gold discounted
See here for the imbalances on Gold . This can help adjust the situation upon the USD.
Why is gold falling? Well simply put volatile situations where the return of XAU maintains no yield, the Dollar however does Yield through interest rates.
Gold will look to fall to level of around $1500 before examining next where the price is to move next.
Do you enjoy the setups?
*10 years combined analysis experience in capital markets
*Focus on technical output not fundamentals
*Position and swing trades
*Provide updates where necessary - with new updated ideas tracking the progress.
If you like the idea, please leave a like or comment.
To all the followers, thank you for your continued support.
Thanks,
Team LVPA MMXXI
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