SPX just reclaimed Resistance and closed under the trend - ShortThis is as meaningful as it gets. It still might have support here, or it's a triple top. We will find out within 7 days.
SPX500 trade ideas
S&P500 hits all time high before Feds Rates CutClosing all my trades and taking profits for now. No one knows how the market will react off Feds Rates Cut and unemployment claims. If the market continues the rally, i believe it's only to lure in more buyers at this point. I prefer to wait for a good pullback for the next few months before looking to buy again. Buying at all time high is stupid and trying to predict it is just pure gambling.
Long trade Buyside trade
Pair SPX500
NY Session AM
Mon 16th Sept 24
12.00 pm
Entry 5621.3
Profit level 5669.2 (0.85%)
Stop level 5613.6 (0.14%)
RR 4.81
(Trade 2)
Macro Insight #1 - High LevelHigh Level Macro Update - Intro
Understanding shifts in key economic indicators is critical for aligning trading strategies to current and evolving market conditions. I am going to talk about recent trends in inflation, GDP growth, unemployment, interest rates, consumer confidence, and financial market dynamics...
Inflation
Inflation has been one of the most closely watched metrics over the past few years, particularly as central banks globally grapple with its implications for monetary policy. Since 2000, the average inflation rate has hovered around 2.54%, with the most recent year-over-year (YoY) CPI reading at 2.59%. Notably, we are currently in a disinflationary regime—prices continue to rise, but at a diminishing rate.
Current Regime: Disinflation
Sectoral Implications: Technology, Financials, and Consumer Discretionary sectors are best positioned to thrive in this environment due to lower input costs and an expected uptick in consumer spending.
Implications suggest that investors will shift attention towards sectors that are less sensitive to raw material costs and can leverage lower interest rates to expand margins. Disinflation also supports a favorable environment for growth stocks, as lower discount rates can lead to higher valuations for companies with strong future cash flows.
GDP Growth: Slowing Momentum, recovery?
The GDP growth rate has averaged 2.21% from 2000 to 2024, with the latest reading at 3.00%. However, the trend in GDP growth is downward, suggesting that the pace of economic recovery is decelerating in recent years.
The combination of slowing GDP growth and disinflation signals potential headwinds for corporate earnings and consumer spending. Investors are likely to consider underweighting cyclical sectors like Industrials and Energy (more sensitive to economic downturns) and instead focus on defensive sectors like Healthcare and Utilities.
Unemployment: Bubbling Concerns in the Labor Market
The unemployment rate has shown a somewhat concerning uptick in recent months, rising towards its long-term average of 5.72%, with the latest data point at 4.20%. The increase reflects a labor market that is losing momentum, which could further pressure consumer spending and broader economic growth.
Rising unemployment tends to correlate with lower consumer confidence and reduced discretionary spending, which can adversely impact sectors like Consumer Discretionary and Travel. In trading strategies, this may also manifest as increased volatility and risk aversion, favoring a rotation into more stable, dividend-paying stocks or bonds.
Interest Rates: Shifts in Monetary Policy
Interest rates have been a focus as central banks navigate a fine line between stimulating growth and controlling inflation. The average interest rate since 2000 has been 1.89%, with the current rates currently elevated at 5.33%. However, recent trends indicate that rates are on a downward trajectory, signaling potential shifts in policy stance.
A falling interest rate environment typically supports bond prices and provides a tailwind for equities, especially in rate-sensitive sectors like Real Estate and Technology. For traders, this backdrop can create favorable conditions for long-duration trades and strategies that capitalize on yield curve steepening.
Consumer Confidence: A Faltering Economic Bellwether
Consumer confidence has been steadily declining, reflecting broader economic uncertainties and rising financial pressures on households. With a long-term average of 83.07, the current reading stands at a notably lower 66.40, highlighting the cautious sentiment among consumers.
Persistent declines in consumer confidence suggest weaker future consumer spending, which can weigh on earnings in sectors like Retail and Consumer Services. Investors will be focused on watching earnings revisions and consider short positions or hedges against consumer-focused equities.
Markets: Decoupling of Stocks and Bonds
The historical relationship between stocks and bonds is showing signs of decoupling, with the rolling correlation between these asset classes weakening to -0.15. This shift could signal new dynamics in asset allocation and risk management strategies.
A weaker correlation between stocks and bonds enhances the diversification benefits of holding both asset classes in a portfolio. In this environment, investors might favor a barbell strategy, balancing growth equities with high-quality bonds to capture upside potential while managing downside risks.
Rolling statistics
GDP Growth Rate: Rising over the last five years but currently showing signs of deceleration.
Unemployment Rate: Although the 5-year trend is rising, the shorter-term trend shows mixed signals.
Interest Rate: A rising trend over five years, but recent data points to a potential reversal.
Consumer Confidence: Consistently falling, pointing to broader economic concerns that may dampen market sentiment.
In my opinion - what investors will look for:
Sector Rotation: Overweight Technology, Financials, and Consumer Discretionary stocks in a disinflationary environment, while underweighting cyclical sectors as GDP growth slows.
Yield Curve Trades: Utilize falling interest rates to position in long-duration bonds or interest rate-sensitive stocks that can benefit from declining borrowing costs.
Risk Management: With rising unemployment and falling consumer confidence, incorporate hedging strategies or defensive positions to mitigate downside risks.
Diversification: Exploit the weakening stock-bond correlation by diversifying across asset classes to enhance portfolio resilience against market volatility.
Tactical Adjustments: Stay agile with tactical allocation adjustments in response to short-term economic shifts, especially as trends in key indicators like GDP and unemployment evolve.
SPX500USD Is Bullish! Long!
Take a look at our analysis for SPX500USD.
Time Frame: 9h
Current Trend: Bullish
Sentiment: Oversold (based on 7-period RSI)
Forecast: Bullish
The market is trading around a solid horizontal structure 5,676.2.
The above observations make me that the market will inevitably achieve 5,784.8 level.
P.S
We determine oversold/overbought condition with RSI indicator.
When it drops below 30 - the market is considered to be oversold.
When it bounces above 70 - the market is considered to be overbought.
Like and subscribe and comment my ideas if you enjoy them!
Understanding risk to reward and risk management Risk Management
In trading, understanding how to manage risk is just as important as understanding how to identify profitable opportunities. Regardless of your skill level or strategy, no trader can predict the market with 100% certainty. Therefore, managing risk is essential to protect your capital and ensure long-term success. In this chapter, we will explore the fundamentals of risk management, including the importance of setting stop-loss and take-profit levels, and how to determine appropriate position sizing.
Importance of Risk Management
The first rule of trading is to protect your capital. Without proper risk management, even a string of profitable trades can be wiped out by a few bad decisions. Traders who neglect risk management often find themselves caught in emotional trading, leading to unnecessary losses. Here’s why risk management is critical:
Minimizes Losses: Every trade carries a risk. By managing risk properly, you can limit the size of your losses and protect your capital from large drawdowns.
Consistency: Effective risk management allows you to trade consistently over the long term, even if you encounter a few losing trades. Successful traders understand that losing trades are inevitable, but with sound risk management, they ensure that losses are small and manageable.
Preserves Psychological Capital: Emotional decision-making often leads to overtrading, panic, and revenge trading. By following a risk management plan, you reduce the emotional impact of losing trades and maintain the discipline needed to follow your strategy.
Setting Stop-Loss and Take-Profit Levels
One of the most practical ways to manage risk is by setting stop-loss and take-profit levels for every trade. These levels help automate your exit strategy, ensuring that you stick to your plan and avoid emotional reactions to price fluctuations.
Stop-Loss Levels
A stop-loss order is an instruction to exit a trade if the price moves against you by a certain amount. This ensures that you do not hold onto a losing trade for too long, minimizing potential losses.
How to Set a Stop-Loss:
Based on Technical Levels: Identify support and resistance levels on the chart. For example, if you are buying a stock, place the stop-loss below a significant support level. If the price breaks this level, it signals that the market is likely to continue downward.
Percentage-Based: Many traders set their stop-loss at a fixed percentage of the entry price (e.g., 1% or 2%). This method ensures that you risk only a small portion of your capital on each trade.
Volatility-Based: Some traders adjust their stop-loss levels based on market volatility. In a more volatile market, you might set a wider stop-loss to avoid being prematurely stopped out by normal price swings.
Example: You enter a long position in a stock at £50 per share and identify strong support at £48. You set a stop-loss at £47.50 to limit your downside risk. If the price drops to £47.50, the stop-loss order is triggered, and you exit the trade automatically.
Take-Profit Levels
A take-profit order is used to lock in gains by exiting the trade once the price reaches a predefined profit target. This helps you avoid the temptation to hold onto a winning trade for too long and risk losing the profits you've already made.
How to Set a Take-Profit:
Risk-to-Reward Ratio: A common approach is to set a take-profit level that provides a favorable risk-to-reward ratio. For instance, if you risk $1 per trade, you might aim to make £2 or £3 in profit (a 2:1 or 3:1 risk-to-reward ratio). This ensures that your winners are larger than your losers.
Technical Targets: Take-profit levels can be based on technical factors such as resistance levels, Fibonacci retracement levels, or trendline projections. For example, if a stock is trading within a channel, you might set your take-profit near the upper boundary of the channel.
Example: You enter a trade with a risk-to-reward ratio of 1:2, meaning you’re risking £100 to potentially make £200. If your stop-loss is set 2% below your entry price, you’ll place your take-profit order at a level where the price is 4% higher.
Trailing Stop-Loss
A trailing stop-loss is a dynamic stop that moves with the price as it moves in your favor, locking in profits while allowing the trade to continue if the trend is strong. If the price reverses by a specified amount, the trailing stop will close the trade.
Example: You enter a long position in a stock at £100 with a trailing stop set at £5. As the price rises to £110, your stop-loss moves to £105, locking in at least £5 in profit. If the price drops to £105, the trailing stop closes the trade.
Position Sizing
Position sizing is the process of determining how much capital to allocate to each trade. Proper position sizing ensures that you do not overexpose your account to a single trade, helping to protect your portfolio from excessive losses.
Calculating Position Size
To calculate the appropriate position size, follow these steps:
1. Determine Your Risk per Trade:
Decide how much of your total trading capital you are willing to risk on any single trade. A common rule is to risk no more than 1% to 2% of your total account balance on each trade.
Example: If you have a $10,000 trading account and you are comfortable risking 1%, you should only risk $100 per trade.
2. Identify Your Stop-Loss Level:
Determine where you will place your stop-loss, as this defines how much you could potentially lose on the trade. For instance, if your stop-loss is 2% below your entry price, you will risk 2% of the position’s value.
Risk-to-Reward Ratio
Every time you enter a trade, you should consider the risk-to-reward ratio, which compares the potential loss (risk) to the potential gain (reward). A favorable risk-to-reward ratio helps ensure that even if you lose more trades than you win, you can still be profitable.
Ideal Ratios: Most traders aim for a minimum risk-to-reward ratio of 1:2 or 1:3. This means that for every $1 risked, you aim to gain $2 or $3. A higher ratio increases your chances of maintaining profitability even with some losing trades.
Example: If you set a stop-loss that limits your potential loss to £50, and your take-profit level is set to gain £150, your risk-to-reward ratio is 1:3. Even if you only win one out of every three trades, you will still break even or potentially make a profit.
Risk management is the foundation of successful trading. By setting proper stop-loss and take-profit levels, using appropriate position sizing, and maintaining a favorable risk-to-reward ratio, you can protect your capital while maximizing your chances for long-term profitability. Remember, successful trading is not about winning every trade—it’s about managing risk effectively so that your winners outweigh your losers.
S&P500Lookst lik e will form a h&s going down. This could be the start of a downtrend or we contenue to go up more high. Just need to see what the price is doing.
[S&P 500] Inflection point, potential C&H if breakSP:SPX is at inflection point. A potential cup & handle if it managed to breakout. FED & BOJ rate decision are this week, watch out for the volatility.
S&P500 Extremely well supported. This uptrend will continue.Just 6 days ago (September 10, see chart below) we gave the most optimal medium-term buy signal on S&P500 index (SPX) as the price tested and held the 0.5 Fibonacci retracement level:
The price rebounded strongly and is imitating the 0.5 Fib bounces of the previous 12 months that all started very strong rallies (+10.50% the weakest!).
This week we would like to go back to our long-term perspective on the wider time-frames (1W on this chart) as ahead of the Fed Rate Decision on Wednesday, we expect very high volatility that might cloud investor thinking and confidence to a strong degree.
There is no reason to diverge from our long-term bullish outlook (yet) as the index remains extremely well supported on the 1W MA50 (blue trend-line), which was approached on August's low and was last time tested (and held) a year ago (October 23 2023).
A Higher Highs trend-line guides S&P to higher prices, similar to every such trend-line since 2016. The 1W RSI has started to form a Bearish Divergence, which was effective only in early 2022 and the start of the Inflation Crisis. As long as the 1W MA50 holds, the Sine Waves show that this uptrend is far from over.
Technically we should now see a continuation to around 5800 - 6000 and then a new medium-term correction. Our long-term Target is 6500, which based on the progressive nature of cyclical rises within this pattern (+63.50% then 105.00%), seems a modest one.
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SP500 Can Break To All-Time Highs After A Triangle ConsolidationBack in August the SP500 turned down for a deeper correction back to 5k area, at the same time when drop on all major indexes and some big cap names were pretty aggressive. However, there was a huge spike in VIX (not shown on this chart), so it must have been a lot of fear involved, which after initial selling shows extreme pessimism and that's when the market tends to stabilize, when least expected.
Well, what is most important is that we have seen some stabilization through most of the second part of August, but notice that the index did not reach new highs; it turned down at the start of the September, after moving up to 5655 area. So, we think that recent drop to 5400 area is actually subwave (C), ideally part of a complex correction, possibly a triangle in wave 4. Especially because of a recent turn up, that looks like a wave (D), so be aware of a slowdown in wave (E), which is still missing based on basic structure of a triangle pattern.
Anyhow, we think that sooner or later index will break to a new highs, ideally after FED rate decision.
NAS100 Technical Analysis and Trade Idea (NASDAQ)👀 👉 Here's my take on the current NAS100 (NASDAQ) situation:
The S&P 500 index is exhibiting clear signs of smart money influence. We're seeing a calculated manipulation of price action, with recent moves targeting a previous range high followed by an expansion to the downside. This pattern suggests institutional players are strategically positioning themselves for a potential bearish move.
## Interest Rate Speculation and Stop Hunting
The market's reaction to rumors of lower interest rates has created a classic "buy the rumor, sell the news" scenario. This rally has likely triggered a cascade of stop losses, setting the stage for a potentially significant sell-off. Such price action often precedes larger market moves, as it clears out weak hands and creates liquidity for larger players.
## Seasonal Considerations
Historically, mid-September has been a bearish period for the S&P 500. This seasonal tendency aligns with our current technical setup, adding weight to the bearish thesis. It's crucial to note that while seasonality isn't deterministic, it can provide an edge when combined with other technical factors.
## Technical Outlook
The daily chart shows bearish divergence on key momentum indicators. The MACD is displaying a bearish crossover, while the RSI, currently at 67.35, suggests there's ample room for downside before reaching oversold conditions . The index is also approaching overbought territory on the Stochastic oscillator, further supporting a potential reversal .
## Trade Strategy
Given this confluence of factors, my bias is decidedly bearish. I'm looking to initiate short positions targeting previous support levels. Key resistance to watch is around 5,624, which aligns with recent pivot points . For entry, I'll be watching for a break and retest of the current range lows, potentially around the 5,618 level .
Remember, while this analysis provides a strong directional bias, always manage your risk carefully. The S&P 500 can be volatile, especially during periods of economic uncertainty. Position sizing and well-placed stops are crucial for long-term trading success. 📉✅
SPX500 9/17/24💹 Indices:
👁️ Outlook
30m Context Time Frame: we are breaking bullish and accumulating, price just came off the 10ema and is pushing into higher prices. I expect NY to have some sort of pullback into the EMAs and take out some lows then we can see a continuation.
Daly Bias: Bullish
Keeping an eye on this. 👁️
S&p 500 daily time frame Hello traders,
I have observing a potential manipulation zone in the S&P 500. This suggests that the price might be artificially influenced, potentially leading to a rejection from this level. Waiting for the New York time zone for confirmation is a smart move.
Here's why:
* **Manipulation Zones:** These are areas where large players (institutions, hedge funds) might be trying to influence the price to their advantage. This can create false signals and make it difficult to predict the true direction.
* **New York Time Zone:** The New York time zone is crucial because it's when US markets open, and many large institutional players are active. Watching the price action during this period can give you a better idea of how the market is reacting to the potential manipulation.
**Remember:** Never rely on one signal alone. Always confirm your analysis with multiple indicators and the overall market context before making any trading decisions.
Good luck with your trades!
S&P 500 - break of Base AccumulationOn the intraday 1 hr chart , we can see the S&P 500 index is in a Rectangular Consolidation,
with price constrained between 5616 - 5636.
A false breakout occurred in the recent NY session ( Spring) , with high volume . This is a liquidity move and a bullish sign for this index.
We then see an impulse to the upside on low volume ( ie. low conviction with buyers).
Considering a price retracement now to the Fibonacci .618 - .705 level. From there,
price to break the consolidation to the upside with a measured move. This should be with high volume on the VSA to be confident of a true breakout.
S&P500 MAKE OR BREAK ZONE AS FED RATE CUTS APPROACH SIMPLE SCALES - COMPLEX FAILS
- Upside: A daily consolidation that holds 5600 would look great as this was a
previous consolidation area. Acceptance above 5650 would break the previous
range highs opening room into 5675, 5700 & 5750.
- Downside: Acceptance below 5600 can start to break a daily support which opens
room back into 5550, 5516, 5488 & 5435.
- Overall Thesis: ES daily pivot looks great, however there is still room for a
weekly and daily lower high. If we lose 5600, this chart can actually get pretty
ugly again. The 5600-5650 range is going to be an important area this week.
S&P 500 Faces Key Resistance Ahead of Fed Rate Cut DecisionI don't usually cover US stocks on this platform, but for those following the S&P 500, it had a strong rally over the past few days. However, it’s now facing resistance around $5,650, just shy of the all-time high set back on July 16, 2024. Despite the recent run-up, it couldn’t quite reach the resistance line, and everything now depends on how the market reacts to the Fed's rate cuts on Wednesday.
If the Fed cuts rates by 0.5%, we might see a solid push upward. However, with a 0.25% cut, here are the support levels on the downside. Remember, the market can move either way this is just my take. If you have questions, leave them below, and don’t forget to hit that like button!
