SPY: FOMC and next steps

As we approach the end of the year, just to sort my own thoughts out, let's get through where we are now, what is left on the table and hopefully this can provide some insights into what to expect leading into the end of December.

Many moons ago I posted "Has SPY Topped" with the premise being, no...

You can see that post here.

The reason was the various number of high prob targets we had overhead:

We evidently took all of those targets out, but the behemoth target remained.

And which target was that? That was SPX which, at the time of posting "Has it really topped" was a whopping almost 6% away:

Then, we tanked:

All the way down to PL2 on the 6 month timeframe, which put that target at 12% away. An ungodly and unattainable feat.
But alas, the market had plans:

And now, we rest at less than 1% from reaching this target at 0.69% away.. my favourite number!

So What's next?

Probably hitting the target no doubt!

But then what?

Well, looking at where we currently stand, the only remaining upside target is that target on SPX. Which, we is roughly 468, but lets do the actual calculation using SPTS:

Our conversion equation is spy = 0.0997(spx) + 0.48
So solving for SPY
SPY = 0.0997(4675.51) + 0.48
SPY = 466.63

So our target from SPX to SPY is 466.63.

So once this target can get hit, do we have any remaining targets to end off the year?

The answer is yes. A few.

DIA Monthly:

And DIA's miss rate:

14% miss rate.

DJI Monthly:

And DJI miss rate:

8% miss rate. Among the best in reliability.

SPX on the week (this week):

And SPX's success rate:

10% Miss rate.

These are the last remaining high prob targets to bring us into the end of year.
Does it mean we will tank? No, not necessarily.
But it does mean, be careful!

And that's really all I can say now.

BTW, Don't ask, I have no idea what the pink panther is about, I just had the song stuck in my head so felt the need to incorporate the little guy into the idea haha.

Safe trades!

Comment:

BTW,

We finally got a sell signal on the co-integration model of DXY and VIX:

Comment:

On the SPY levels today 466 is PH2

Very interesting eh?

Comment:

Zoomed out look:

Comment:

Well......
We made it

Comment:

The DOW beat QQQ to an ATH this year, shit!
I figured QQQ would do an ATH but kind of ignored the DOW haha.

So, now that I have had some time to review the charts, we overshot the 6 month target, probably because there was some squeeze volume in there, and futures are parabolic in after hours with NQ already approaching like the top of its daily range for tomorrow haha:

Messy messy messy, but there is a bearish 99 on the day on NQ so it will come back down. So if you're short, don't freak out too much.

For tomorrow its important to approach the day unbiased. The probability is shifting to the bearish side and on the volume indicator SPY is indeed topping on the daily timeframe:

We either start reversing tomorrow and we start the decline into EOY, orrrrrr.... we end the year off at ATHs across the board.

Either way, it's setting us up for a tempestuous January.

I am not short yet, because I want to see confirmation of the decline starting and the bulls giving it a rest. I don't see it yet. And again, there is a possibility we end the year with ATHs at this point. Its only a few points away, so I can foresee them being just like "F it, let's take it to there".

For tomorrow, I will post the levels and thresholds to watch like I did today for QQQ and SPY, to help you along in your trading.

Have a great evening everyone!

Comment:

Upside target 474, downside 469

Comment:

Just realizing this now, mostly because I haven't been tracking ES this week, but there is an unhit high prob on ES

Also on NQ.
Be careful, it looks toppy!

Comment:

Seems like ATHs will be the case here.
There is no reversal pressure and insufficient selling pressure.

Perhaps it will be a repeat of 2021, make some ATHs, and begin a precipitous decline into January. Or perhaps it will be a continued bull run like in 2021, where we just see straight up with marginal pullbacks.

It will be helpful to reference the annual and 6-month levels at the beginning of January. I have run projections using the data currently but because we are pushing pushing and more pushing, the current annual high is changing and that is a very important level in the projections.

So, alas, we must wait. The bullish rallying and constant pushing with no pullback at all is annoying af and just completely artificial. But be that as it may, it is really difficult to cling to a short bias with this obnoxiousness,

We needed to start the decline today, so unless we end the day tanking with conviction, the decline has not started and we will just continue to rally up into next week.

Will update after close.

Comment:

Targets and threshold for tomorrow on SPY:

Remember quad witching, so probably trendy in a direction.

Safe trades all!

Comment:

Very whipsay with a lot of shakeout attempts.
Be careful and don't get fooled, bias is bullish today.