Don't Fall For S&P 500 Rally. The Worst is Still To Come!
Looking at the weekly E-mini S&P 500 futures chart, we can see that price is continuing to rebound as planned, in a way that looks to be completing the right shoulder of a larger head and shoulders topping pattern. After breaking down severely below the 200 week moving average (in purple) price has recently broken back above it. However, this is not really surprising, after such a dramatic decline from the all time high. I haven't changed the dotted lines on the chart at all, since I called for a relief rally to complete this potential right shoulder, and we can see that price is responding very well to those expectations.
If the S&P can continue to hold above the 200 week moving average, and particularly, if this week's candle closes above the 200 week moving average, there is actually a decent possibility of more upside in this rally. However, I strongly believe that it will fail, and the market will roll back over to the downside. When that happens, I fully expect that the market will make new lows, after it completes this possible right shoulder of a head and shoulders pattern.
Stocks, crypto, and many other markets are rallying because of evidence that the coronavirus is slowing down. However, severe damage has been done. Credit spreads are exploding, debt risk is unprecedented, millions of people are losing their jobs, companies are filing for bankruptcy, entire industries (such as airlines, gambling, and retail) are facing complete devastation, and the world economy has basically come to a complete standstill. Las Vegas looks like a ghost town. No matter what happens with the coronavirus, the world economy has been dealt a crushing blow that it almost certainly won't be able to recover from — especially without a complete meltdown and rest of global markets. To be clear, I mean that we're not going to see new highs in markets, before we see new lows, and in terms of technical analysis, everything is playing out perfectly as the S&P completes this massive head and shoulders topping pattern.
Unemployment is absolutely exploding. The worst is still to come.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
If the S&P can continue to hold above the 200 week moving average, and particularly, if this week's candle closes above the 200 week moving average, there is actually a decent possibility of more upside in this rally. However, I strongly believe that it will fail, and the market will roll back over to the downside. When that happens, I fully expect that the market will make new lows, after it completes this possible right shoulder of a head and shoulders pattern.
Stocks, crypto, and many other markets are rallying because of evidence that the coronavirus is slowing down. However, severe damage has been done. Credit spreads are exploding, debt risk is unprecedented, millions of people are losing their jobs, companies are filing for bankruptcy, entire industries (such as airlines, gambling, and retail) are facing complete devastation, and the world economy has basically come to a complete standstill. Las Vegas looks like a ghost town. No matter what happens with the coronavirus, the world economy has been dealt a crushing blow that it almost certainly won't be able to recover from — especially without a complete meltdown and rest of global markets. To be clear, I mean that we're not going to see new highs in markets, before we see new lows, and in terms of technical analysis, everything is playing out perfectly as the S&P completes this massive head and shoulders topping pattern.
Unemployment is absolutely exploding. The worst is still to come.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
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