Bullish and Bearish Alternatives for SPY also read paragraph 2.
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For education and information a technical analysis using waves, fibs and volume profiles showing both a bullish and bearish potential path for SPY.
Those that follow me trading know that I day trade using points of control and not predictions or forecasts. This is entertainment for me and not intended as trading or investment advice.
A little bit about this set up. I used the fixed range profile which begins sometime in July of 2020 at a low below the October/22 low. The value area is defined at 80 (vs default 70) - essentially to line up with the 0.786fib (which SPY seems to enjoy) and also the VAH lines up with the most recent SPY high and VAL seems to align to the Oct/22 low. That was the logic in choosing 80 for value area.
There are 3 patterns on the chart.
The bullish pattern lines up the top of the volume profile with the forecast ATH of 480.
The bearish pattern aligned the specific waves with the volume profile,fibs and Wolfe wave targets.
Fundamentally there are many reasons to be bullish, the liquidity in the global market being preeminent followed by the resilience of the US economy. Equally many reasons to be bearish - the market sensing the end of the the rate hiking cycle re-balancing funds to lean heavier into Tbills, profit taking and repositioning for 2024, and of course the threat of an earnings recession.
For those that don't read these notes, read paragraph 2 again ;-)
Good luck in whatever method you use to trade!
John
Those that follow me trading know that I day trade using points of control and not predictions or forecasts. This is entertainment for me and not intended as trading or investment advice.
A little bit about this set up. I used the fixed range profile which begins sometime in July of 2020 at a low below the October/22 low. The value area is defined at 80 (vs default 70) - essentially to line up with the 0.786fib (which SPY seems to enjoy) and also the VAH lines up with the most recent SPY high and VAL seems to align to the Oct/22 low. That was the logic in choosing 80 for value area.
There are 3 patterns on the chart.
- a Wolfe wave pattern and that can be done in two ways - I published a prior idea that has one alternative, this one shows the second alternative.
- a Bullish ABCDE five wave which extends to an SPY of 480
- a Bearish ABC (B Wave which followed A Wave from SPY ATH) followed by C wave which is 5 waves, where wave 3 is broken down into an ABCDE
The bullish pattern lines up the top of the volume profile with the forecast ATH of 480.
The bearish pattern aligned the specific waves with the volume profile,fibs and Wolfe wave targets.
Fundamentally there are many reasons to be bullish, the liquidity in the global market being preeminent followed by the resilience of the US economy. Equally many reasons to be bearish - the market sensing the end of the the rate hiking cycle re-balancing funds to lean heavier into Tbills, profit taking and repositioning for 2024, and of course the threat of an earnings recession.
For those that don't read these notes, read paragraph 2 again ;-)
Good luck in whatever method you use to trade!
John
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By the way - you can click on the frames or scales and adjust them to see the charts more clearly.
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