2024-08-05 - priceactiontds - daily update - sp500
Good Evening and I hope you are well.
Since today was a very special day again, I need to see futures opening later and the Asia session in the morning to give more updates. So only a short one on sp500 and will write more tomorrow morning.
comment: 3 days, -8%. This is either due to an event happening right now or a very climactic but short lived selling, which could produce a huge bounce upwards. 5000/5100 were my targets which I was not sure about if we could get there in 2024 but getting there in a couple of days is something special. I do not know the reasons for the selloff and neither do you or anyone else. Don’t fool yourself because random bro on twitter said it’s because of the jpn carry trade or whatever. All we know is that people are running for the exits and we almost had the first limit down day since covid.
current market cycle: Bear trend
key levels: 5000 - 5300
bull case: Bulls stopped the selling at 5119, which was in the area of the May low. And in between my lower target of 5200 and the most obvious big support 5000. If this is not an event where all technicals are out of the window, a pullback will happen, that’s the nature of markets. Bulls printed a textbook inverted head & shoulders and the target for that is 5420. The 50% pb from the ath to recent low is 5418. I am not saying that we get there tomorrow but bear trends have violent pullbacks and it’s absolutely possible to see that price again. For now bulls should be happy with holding above 5200 and going sideways.
Invalidation is below 5100.
bear case: Bears produced 3 extremely climactic bear bars on the daily chart and that is unsustainable. Market needs a pullback and everyone knows it. Market touched the 1h 20ema twice today for the first time since Thursday. The bear wedge already broke and market is trying to find a bottom. If bears are strong and this selling is the end of it all, any pullback will be violently sold again and market will probably not see 5350 or higher again. If this is not the end all be all, we get a healthy pullback to form a proper channel, which will lead us to 5000 over the next weeks. That is the reasonable and my preferred path forward. If bears go full panic mode, we see 5000 today and probably a bit lower just to get all stops below, before a bounce. This was most likely leg 2 (W3) of this current bear trend.
Invalidation is above 5460.
short term: Can’t be bearish at these lows. 5100/5200 will most likely hold and we trade in the given range for some time or see a bigger pullback to 5400ish.
medium-long term: Bearish. I gave the 5000 target 3 months ago and we almost got there way earlier than expected. There is a reasonable chance we will see an event unfolding over the next days/weeks. Something breaks during these violent moves and this time will not be different.
Since today was a very special day again, I need to see futures opening later and the Asia session in the morning to give more updates. So only a short one on sp500 and will write more tomorrow morning.
comment: 3 days, -8%. This is either due to an event happening right now or a very climactic but short lived selling, which could produce a huge bounce upwards. 5000/5100 were my targets which I was not sure about if we could get there in 2024 but getting there in a couple of days is something special. I do not know the reasons for the selloff and neither do you or anyone else. Don’t fool yourself because random bro on twitter said it’s because of the jpn carry trade or whatever. All we know is that people are running for the exits and we almost had the first limit down day since covid.
current market cycle: Bear trend
key levels: 5000 - 5300
bull case: Bulls stopped the selling at 5119, which was in the area of the May low. And in between my lower target of 5200 and the most obvious big support 5000. If this is not an event where all technicals are out of the window, a pullback will happen, that’s the nature of markets. Bulls printed a textbook inverted head & shoulders and the target for that is 5420. The 50% pb from the ath to recent low is 5418. I am not saying that we get there tomorrow but bear trends have violent pullbacks and it’s absolutely possible to see that price again. For now bulls should be happy with holding above 5200 and going sideways.
Invalidation is below 5100.
bear case: Bears produced 3 extremely climactic bear bars on the daily chart and that is unsustainable. Market needs a pullback and everyone knows it. Market touched the 1h 20ema twice today for the first time since Thursday. The bear wedge already broke and market is trying to find a bottom. If bears are strong and this selling is the end of it all, any pullback will be violently sold again and market will probably not see 5350 or higher again. If this is not the end all be all, we get a healthy pullback to form a proper channel, which will lead us to 5000 over the next weeks. That is the reasonable and my preferred path forward. If bears go full panic mode, we see 5000 today and probably a bit lower just to get all stops below, before a bounce. This was most likely leg 2 (W3) of this current bear trend.
Invalidation is above 5460.
short term: Can’t be bearish at these lows. 5100/5200 will most likely hold and we trade in the given range for some time or see a bigger pullback to 5400ish.
medium-long term: Bearish. I gave the 5000 target 3 months ago and we almost got there way earlier than expected. There is a reasonable chance we will see an event unfolding over the next days/weeks. Something breaks during these violent moves and this time will not be different.
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