Looking for the topIf the current level fails to resist the price the next possible top is ~5652.
Violet line is the trendline from two previous ATH which coincides with the expansion of the descending channel.
US500 trade ideas
The End?Have the fed realized that the economy is broken? Is there something they don’t want to tell us? Why was there 818,000 jobs overstated in the data they ‘react’ to. What is the real data?
Consumer stocks are a more reliable barometer for how healthy the economy. Stocks from Dollar General, to Starbucks, to Nike and LVMH, the spending is weak.
Low income consumer - weak
Mid tier consumer - weak
High end consumers - weak
So did we get a 0.5% reduction because they have reacted too late and realized the economy has underlying weaknesses? Possibly so, they have done so in the past:
Looking at the history of recent cuts followed by crashes due to economic weakness:
2000-2001 - dot-com bubble
2007-2008 - Great financial crisis
Rate cuts were implemented in response to underlying economic issues. The market interpreted these cuts as confirmation that the Fed was worried about economic conditions, which led to panicked selling and eventual market crashes.
2024 - 2025 - the end of the grand supercycle due to massive rise in unemployment or do we get the continuation to more all time highs?
Nobody knows where we are just yet but there are clues to what will happen next, if you know what you’re looking at.
I do firmly believe we are in the 5th wave of a multi decade supercycle. When it ends, it will be very ugly. Stay tuned!
Did SPX just triple top on the 1.61 extension? 1.61 extensions can be a common level for false breakouts.
One of the times in which we know we can see 1.61 false breakouts is in Elliot wave 5.
This perhaps is reason we find so many 1.61 extensions at big highs.
We've been trading at this level for a while now. Tried to sell twice and now we have a wick after the news.
If this sells again, then we may have formed a triple top on the weekly at this big 1.61 level.
Can be a serious dump if that's the case. The termination of wave 5 would imply the spiking out of the 2022 low.
Fed decision had long been priced in - what's next ?It is said that the stock market looks 6 to 9 months ahead. This was probably the reason why today's decision by the Fed to cut interest rates by 0.5% did not cause a major realignment in the markets (so far).
It was a foregone conclusion that the Fed would begin to turn the tide on interest rates. However, it was unclear how big the move would be. Many economists had expected a smaller move of a quarter of a percentage point. The cut marks a turning point in interest rate policy: the Fed had been raising rates at a record-breaking pace since last March to combat stubbornly high inflation, most recently holding them in a range of 5.25 percent to 5.50 percent for more than a year.
SP500 Triple TopBears on the edge of their seats. Market seems indifferent to the rate cut. Look out below.
S&P 500 INDEX (^SPX) short term outlookThe S&P 500 is trading within an upward price channel, indicated by the parallel trendlines. The index is nearing a potential breakout above key resistance near 5650, where previous attempts to breach this level were rejected. The price is currently at 5638.73, with Bollinger Bands showing a squeeze, suggesting increased volatility ahead.
A breakout above 5650 could lead to a rally towards the target zone between 5800 and 5900, shown in the chart. The moving averages are aligned to support bullish momentum, but caution should be taken if the price fails to break the resistance, as this may result in a pullback to the 5500 support area.
In the short term, traders should watch for increased volume and confirmation above 5700 for a potential continuation to higher levels. A failure to break out could signal consolidation or a move back toward lower trendline support.
FOMC Preview & Trade PlansA quick video going over what levels I'm watching and what I expect heading into today's FOMC decision and Powell presser.
How prepared are you for the outcome from FOMC today?Hello traders!
I see one of three possible decisions being made today:
Highest probability, 25bp rate cute
Low probability, 50bp rate cut
Low probability, no change (they did say over many months how committed they were to 2% inflation).
These 3 possible decisions can have multiple outcomes.
25bp rate cut : Market moves in the current direction (up for assets/crypto etc)
50bp rate cut : Market turns heavy bullish
No change : get ready for a very cold and painful winter and QE to turn the market back around in 3-6 months from now.
How are you preparing for these three possible outcomes strategically and mentally?
Here is my play:
I have bets for the long side, so if a bullish outcome happens, I'm ready to take my profits at my targets
And if there is no change and we see a crash over the next few months, I'm mentally prepared and will embrace that outcome with a smile on my face and get ready to buy again at the next bottom once the FED unleashes QE.
There is one last rare possible outcome: selling the news type of event. We could see a sharp decline over the next few weeks, but it will be all very bullish. There could be an attempt to mark down the prices to get folks to sell so they can buy.
Let's play smart and be prepared mentally. Trading is just like any other sport; it's a mental game.
Good luck to everyone today, and green pips to you 🤑
Bulls Bears zone for 09-18-2024Today being Fed day, markets might trade in a range until in the afternoon.
Level to watch: 5702 --- 5704
Reports to watch:
US FOMC Announcement : 2 PM ET
US Fed Chair Press Conference 2:30 PM ET
Supply loaing set-upS&P 500
Price is in an uptrend which is taken as a pullback of price to the recent swing high at 5 653 which formed our swing low at 5 392.3. It must be noted that price returned to this daily supply area within 30 days and we see a reversal candle close which spiked the all-time high and closed back within the supply area. A close above this swing high will invalidate our sell set-up and a further rally in price is expected. The DXY will play a vital role in signalling the flow of money as equities are high risk assets and currencies are low risk assets and gold is a safe heaven, therefore a drop in Gold will cause the equities to drop as well.
Trading Near the Bells Part 2: The CloseIn this second part of our series, we shift focus from the market open to the close—the final hour of the trading session. The dynamics of the close are different from the open because the time to act is much shorter. Unlike the open, where you have the whole trading day ahead of you, the close compresses decisions into a much tighter window. This makes the strategies and the mindset for trading the close unique.
In this section, we'll cover two core strategies for trading the close—one momentum-based and one focused on mean reversion. Whether you're riding the final burst of a trend or capitalising on an overextended market move, these setups can help you navigate this high-stakes period effectively.
The Significance of the Close
The final hour of trading—the "Power Hour" —is dominated by institutional traders and large funds rebalancing their portfolios, closing positions, or placing large end-of-day orders. Retail traders often close out positions as well, creating an environment where liquidity spikes and volatility increases. This surge in activity can lead to significant price swings, especially in individual stocks with strong intraday trends or overextended moves.
What happens during this period can set the stage for the next day’s market action. If the close is strong, closing at or near the high of the day, it suggests that buyers were in control and may continue pushing prices higher the following day. Conversely, a weak close at the low could signal selling pressure carrying over into the next session.
Two Key Strategies for Trading the Close
We’ll explore two strategies tailored for this critical time frame. These setups are designed to take advantage of the distinct characteristics of the close: heightened volatility, fast price action, and end-of-day positioning.
Strategy 1: Run into the Close (Momentum)
The "Run into the Close" strategy tends to work well on days where the market has been trending strongly. This strategy takes advantage of the final surge in momentum as large traders and funds push prices even further in the direction of the trend.
This is particularly effective if the market is breaking out from several days of price compression. The idea is to enter on a pullback in the final hour and ride the momentum into the close.
Setup:
• Look for an established trend during the trading session, with price ideally breaking out of multi-day consolidation.
• Watch for a small pullback in the last hour, ideally to the 9-EMA on the 5-minute chart.
• Wait for price to break back above the 9-EMA after the pullback.
Entry:
• Enter following the break back above the 9-EMA on the 5-minute candle chart.
Stop-Loss:
• Place your stop below the low of the pullback.
Trade Management:
• Use the 9-EMA for dynamic risk management—if price closes below it, consider exiting early.
Target:
• Hold the position until just before the close, capturing the final push of momentum.
Example: The S&P 500 had been trending up all day, breaking out from a tight multi-day consolidation. During the last hour of trading, the market pulls back briefly, touches the 9-EMA, and then breaks back above it. This is your entry signal, allowing you to ride the trend into the final minutes of the session.
S&P 500 5min Candle Chart
Past performance is not a reliable indicator of future results
Strategy 2: Revert to VWAP (Mean Reversion)
The "Revert to VWAP" strategy is a mean-reversion play that tends to work well when the market is overextended going into the last hour of trading. Often, prices can move too far from the day's volume-weighted average price (VWAP), and late in the session, there is a tendency for price to revert back toward it.
This strategy uses the Relative Strength Index (RSI) to identify overbought or oversold conditions and then waits for a break of recent swing highs or lows on a 5-minute chart to trigger the entry.
Setup:
• Look for an overextended market going into the final hour of trading. The price should be far away from VWAP.
• Check RSI on a 5-minute chart for overbought (above 70) or oversold (below 30) conditions.
• Wait for price to break above a recent swing high (for a reversal from oversold) or below a swing low (for a reversal from overbought).
Entry:
• Enter a long position if the price breaks above a swing high (from oversold conditions).
• Enter a short position if the price breaks below a swing low (from overbought conditions).
Stop-Loss:
• Place your stop just below the recent swing low (for long positions) or above the recent swing high (for short positions).
Target:
• Target VWAP as the price reverts back toward the average.
Example: As we approached the final hour of the day, the S&P 500 index had moved into an oversold position on the RSI when it tested a key level of swing support. This was followed by a break above a small swing high – triggering a move back towards the true average price for the day – VWAP.
S&P 500 5min Candle Chart
Past performance is not a reliable indicator of future results
Conclusion
Whether you’re aiming to ride the trend with a "Run into the Close" or seeking to capitalise on an overextended market with a "Revert to VWAP" strategy, trading the final hour requires sharp execution and discipline.
Even if you don’t trade the close directly, understanding how the market finishes the day can provide valuable insights for the next session. Watch how the price closes in relation to the day’s range, as this can set the tone for the following day’s market sentiment.
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SPX: Danger level aheadFor sure we will get a drop in S&P these day's, but how big will it be ? At the best it is going to be a rebalancing from large cap so small (as suggested by Tom Lee), but tumbling down to 5350 an below should result a correction till 4300 range (till next summer) when the extend of the recession should be visible. On soft landing up to 15000 in 2030 ?
SPX500 H4 | Approaching multi-swing-high resistanceSPX500 is rising towards a multi-swing-high resistance and could potentially reverse off this level to drop lower.
Sell entry is at 5,675.99 which is a multi-swing-high resistance that aligns close to the 127.2% Fibonacci extension level.
Stop loss is at 5,750.00 which is a level that sits above another 127.2% Fibonacci extension level.
Take profit is at 5,565.20 which is an overlap support.
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S&P 500 Sets Record Ahead of Fed DecisionS&P 500 Sets Record Ahead of Fed Decision
As shown by the S&P 500 index chart (US SPX 500 mini on FXOpen), yesterday's trading saw the index hit a new intraday high of 5,678.9, surpassing the previous record of 5,677.5 set on 16 July. However, the bulls were unable to maintain this historic peak, which is a negative sign, suggesting the possibility of a bear trap scenario.
Nevertheless, this first new record in two months is significant as it shows the market's recovery from the panic-driven drop on 5 August, which was linked to fears of a potential recession.
Yesterday’s rise was boosted by the US Commerce Department's August retail sales report, which exceeded expectations. As Forbes noted, this supports the view that the US is not on the brink of a recession.
The market now heads into the final stretch before the highly anticipated Federal Reserve decision, expected today at 21:00 GMT+3, which will likely see the first interest rate cut in 4.5 years.
According to Forex Factory, analysts predict a rate cut to 5.25% from the current 5.50%. However, surprises are possible, with a 0.5% cut also on the table. Only a small minority seems to expect the rate to remain unchanged.
Technical analysis of the S&P 500 index chart (US SPX 500 mini on FXOpen) shows that the market is in an uptrend, marked by a blue channel. The index is trading near the median of this channel, suggesting a balance of supply and demand. Such conditions increase the likelihood of a flat market, but this seems unlikely with the Fed potentially starting a rate-cutting cycle.
Prepare for volatility today: the decision will be announced at 21:00 GMT+3, followed by Fed Chair Powell's press conference at 21:30 GMT+3. If a bearish move occurs, support for the S&P 500 index (US SPX 500 mini on FXOpen) may come at the 5,400 level.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
SPX500USD: Capitalizing on Probabilities for a Bullish SurgeSPX500USD: Bullish Momentum Supported by Key Fundamentals
The S&P 500 (SPX500USD) shows strong bullish potential, backed by several key fundamentals
1. Resilient economic growth: Recent GDP data indicates continued expansion despite earlier recession fears.
2. Easing inflation pressures: Core inflation metrics are trending downward, potentially allowing for a more accommodative Fed policy.
3. Strong corporate earnings: Many companies are beating earnings expectations, demonstrating business resilience.
4. Technological advancements: Ongoing AI integration across sectors is driving productivity gains and investor optimism.
Probability-Based Approach for Long Positions
I'm utilizing probabilities to enter long positions. My charts will showcase key probability zones and potential entry points.
Let's dive into the top-down analysis.
12M:
2W:
12H:
I’d love to hear your thoughts on the SPX500USD outlook!
The U.S. Markets are likely to have one last push before....The U.S. markets have been inflated to the point of near exhaustion, propped up by nothing more than a money printer that goes brrr... brrrr... brrrrrrrrrrr. However, this seemingly never-ending run is coming to an end.
Trump will most likely be elected president again. His first term (45) and his second term (47) will likely mark the greatest market crash of all time—the end of the everything bubble! 4 + 5 = 9; 4 + 7 = 11; 9 + 11 = 20. They will likely prop the market up until his administration takes power, then...
Shorting these markets will be the opportunity of a lifetime!
Good luck, and always use a stop loss!
Unveiling Market Sentiment in Trading Unveiling Market Sentiment in Trading
Understanding the market's pulse can offer traders a significant edge. The market is driven by human psychology, and by grasping the prevailing mood, traders can position themselves more effectively.
This article will delve into various methods and indicators that offer insights into market sentiment analysis trading, from media scanning and expert opinions to economic and market-specific indicators.
What Is Market Sentiment?
Market sentiment refers to the prevailing mood or emotional tone that traders and investors exhibit toward a specific financial asset or the market as a whole. It serves as a qualitative measure that captures collective attitudes toward market conditions — optimistic, pessimistic, or neutral.
This sentiment is often influenced by various factors such as economic indicators, news, and trader psychology. Understanding market sentiment is crucial because it can help anticipate market trends, offering insights that purely quantitative indicators sometimes overlook.
Of course, traders can’t just rely on sentiment analysis; price charts and trading tools are also key. FXOpen’s native TickTrader platform offers just that and more. Head over there to get started in minutes.
Media Scanning
In forex, commodity, crypto*, and stock market sentiment analysis, media scanning is one of the most straightforward techniques. News reports from reputable financial news outlets like Bloomberg, Reuters, and the Financial Times often provide timely updates on market conditions, geopolitical events, and economic data releases. These reports offer a snapshot of the current market health.
Expert opinions offer another layer of depth to understanding market sentiment. Analyst statements from established financial firms (banks, hedge funds, venture capital firms, etc.), expert blogs, and whitepapers can deliver nuanced viewpoints.
For example, if multiple analysts from various firms are consistently bullish about a specific asset, it can indicate positive sentiment surrounding it. While these shouldn't be your sole resource, they often provide valuable insights that quantitative metrics may overlook. Remember to consider the source and its reliability, as not all opinions carry the same weight in influencing market sentiment.
Market Sentiment Indicators
Moving beyond the qualitative aspects of media, there are several quantitative indicators that can measure market sentiment directly. The Commitment of Traders Report (COT), particularly relevant in commodity markets, reveals large traders' positions. A skew toward long positions among these traders often indicates bullish sentiment for a commodity, while a skew toward short positions suggests a bearish sentiment.
The Fear & Greed Index is another essential tool, often associated with stock markets but also applicable to other asset classes like cryptocurrencies* and even some commodities. For stocks, CNN’s Fear & Greed Index is commonly cited, while Alternative.me’s version is often used for crypto*.
This market sentiment index uses multiple factors, including market momentum and safe-haven demand, to calculate a score ranging from zero to 100. Lower scores signify fear, suggesting a bearish outlook, whereas higher scores indicate greed, signalling a bullish market environment.
Consumer Surveys
Consumer surveys offer another valuable avenue for determining market sentiment, particularly in sectors like retail, real estate, and commodities. One widely used metric is the Consumer Confidence Index. This index is based on household survey data and measures their optimism or pessimism about current and future economic conditions. A high Consumer Confidence Index typically suggests that people are willing to spend, often driving up asset values in the retail and real estate sectors.
Manufacturing surveys also provide useful data, especially for forex and commodity markets. These surveys, such as the Purchasing Managers' Index (PMI), gauge the health of a country's manufacturing sector. Positive manufacturing data often strengthens a country's currency and can also be an indicator of rising commodity prices.
Social Media & Forums
In the age of digital communication, social media platforms and online forums have become indispensable tools for assessing market sentiment. Trending topics like Twitter can offer a quick pulse on what assets or market events garner attention. Specialised analytical tools can even quantify this chatter into actionable data, highlighting potential market moves.
Online forums are another rich source of sentiment indicators. Places like Reddit and niche trading forums often host passionate discussions where traders share opinions, strategies, and forecasts. While the quality of this information can vary, a consensus view often emerges that can be invaluable in gauging sentiment. For example, an uptick in positive posts about a specific cryptocurrency* on a forum could indicate bullish sentiment, whereas an increase in sceptical posts would suggest the opposite.
Economic Indicators
Economic indicators like interest rates and Gross Domestic Product (GDP) reports provide a macro-level view of market sentiment, affecting everything from currencies to commodities. Interest rates, set by central banks, can indicate the market's sentiment toward a country’s economic prospects. A rise in interest rates often boosts the country's currency as higher yields attract foreign investment. Conversely, a rate cut can indicate economic caution, potentially weakening the currency.
Quarterly GDP reports are another crucial metric, offering a comprehensive picture of a country's economic health. Strong GDP growth is generally seen as a positive indicator affecting multiple asset classes, from equities to currencies, that relate to that country. If a country reports better-than-expected GDP figures, it's often interpreted as bullish, leading to increased investor confidence and higher asset prices.
While these indicators aren’t direct measures of sentiment, they both influence market sentiment and reflect current sentiment. For instance, rising interest rates may send the Consumer Confidence Index lower, resulting in reduced spending and a lower GDP reading. Lower GDP might damage sentiment further, and so on.
Market Indicators
In sentiment analysis for the stock market, the Volatility Index, or the VIX, is particularly informative. Often referred to as the "fear gauge," the VIX measures the market's expectation of 30-day forward-looking volatility based on S&P 500 index options. When the VIX rises, it indicates that traders expect increased volatility, often corresponding to bearish market conditions. Conversely, a low VIX suggests a more stable, often bullish market sentiment.
Trading volume is another key metric that provides clues about market sentiment in a specific asset. High trading volumes often point to strong sentiment, be it bullish or bearish, as it represents active participation and conviction among traders. In contrast, low trading volumes might suggest indecision or lack of interest, signalling a market that could move sideways or reverse.
The Bottom Line
In the ever-changing world of trading, understanding market sentiment is invaluable. From economic indicators to social media trends, these tools provide a multi-dimensional view of market moods.
To put these insights into practice and gain a competitive edge in your trading endeavours, consider opening an FXOpen account. Once you do, you’ll gain access to hundreds of assets to deploy your sentiment analysis skills. Happy trading!
*At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Bearish drop?S&P500 (US500) is rising towards the pivot and could potentially reverse to the 38.2% Fibonacci support.
Pivot: 5,653.09
1st Support: 5,544.83
1st Resistance: 5,727.20
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Long trade
Trade Setup:
Buyside trade on the SPX500 (S&P 500 Index)
New York AM session at 10:00 am
Entry: 5565.8
Profit Target: 5653.4 (1.57% gain)
Stop Loss: 5547.6 (0.33% risk)
Risk-Reward Ratio (RR): 4.81
US500 | SPX | SP500 SHORT 3HThe S&P 500 Index is a market-capitalization-weighted index of 500 leading publicly traded companies in the U.S. The index actually has 503 components because three of them have two share classes listed.
It is not an exact list of the top 500 U.S. companies by market cap because there are other criteria that the index includes. Still, the S&P 500 index is regarded as one of the best gauges of prominent American equities' performance, and by extension, that of the stock market overall.
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.
