As many know, I have been calling stocks (and gold / silver) sells for weeks. Instead of listening to me, the permabulls decided to call me bipolar for sharing the facts that invalidate their hopium. I even had a few bulls claim that silver is negatively correlated to stocks (it's not) and that yields and the dollar move the same way (they don't). Unfortunately for these permabulls, it turns out that I was right, and they really were buying tops.
As I noted in previous charts, our "bullish trend" on stocks (and other related assets) had the potential to reveal itself as an ascending bearish consolidation within a downtrend, and it seems that this has now been confirmed. As noted before, this could be invalidated by major macroeconomic fundamentals (keep an eye on rates and fed tightening news) but given the fundamentals (would take far too long to explain here) regarding the economy, this does not seem very likely.
We have rejected three times, forming a lower high triple-top, and on the longer-term chart we can clearly see momentum dying, as price weakens and falls downward. This is not your typical bullish momentum, and not what you would expect to see in a bullish rally.
Given the charts today (and what they have been doing the last few weeks) the most likely path for US500 is down, finishing its ascending bearish consolidation, and continuing its downtrend. Again, fundamentals could invalidate this, but as for now, traders should be looking for SELLS (not buys) on all assets positively correlated to stocks, including: silver, gold, us100, us50, EU, and oil. There are of course more positively correlated assets. If you are not familiar with correlation, use online tools or simply add a "CC" indicator to your chart to check individual assets. There is not enough time to explain correlation fully, but the short version is: if stocks do a move, positively correlated assets absolutely WILL follow that move - it's just a matter of "when", not "if", given asset delays. These correlations are 100% reliable for more than 100 years. This is not debatable.
Right now we should be looking for sells, but keeping a close eye on fed news. If investors come to believe that there will be rate cuts or pauses, we could see this outlook change, but given that we are at 5% inflation... well... not likely. Let's watch and see.
As I noted in previous charts, our "bullish trend" on stocks (and other related assets) had the potential to reveal itself as an ascending bearish consolidation within a downtrend, and it seems that this has now been confirmed. As noted before, this could be invalidated by major macroeconomic fundamentals (keep an eye on rates and fed tightening news) but given the fundamentals (would take far too long to explain here) regarding the economy, this does not seem very likely.
We have rejected three times, forming a lower high triple-top, and on the longer-term chart we can clearly see momentum dying, as price weakens and falls downward. This is not your typical bullish momentum, and not what you would expect to see in a bullish rally.
Given the charts today (and what they have been doing the last few weeks) the most likely path for US500 is down, finishing its ascending bearish consolidation, and continuing its downtrend. Again, fundamentals could invalidate this, but as for now, traders should be looking for SELLS (not buys) on all assets positively correlated to stocks, including: silver, gold, us100, us50, EU, and oil. There are of course more positively correlated assets. If you are not familiar with correlation, use online tools or simply add a "CC" indicator to your chart to check individual assets. There is not enough time to explain correlation fully, but the short version is: if stocks do a move, positively correlated assets absolutely WILL follow that move - it's just a matter of "when", not "if", given asset delays. These correlations are 100% reliable for more than 100 years. This is not debatable.
Right now we should be looking for sells, but keeping a close eye on fed news. If investors come to believe that there will be rate cuts or pauses, we could see this outlook change, but given that we are at 5% inflation... well... not likely. Let's watch and see.
Trade active:
Just wanted to post a simpler view of the possibilities here. We could see the price drop from this area or we could see a retest of top of channel, but either way the low has not been retested. This price action is looking very similar to BTC, which turned out to be an ascending bearish channel. The result was a massive drop following the retest (and failure) of the low. The two paths to that scenarios are seen on this chart. As always, fundamentals can invalidate these views.
Comment:
We are now at the do or die zone. If we break any higher than the red line, we're going to see bullish moves until at least the pink line, maybe further. If US500 follows US100 (which makes sense, since tech is the only thing driving this bullish momentum) then we may even see US500 break the pink line. However, if we reject here, it will likely confirm the bearish view, and we'll end up retesting lows. Also keep in mind the two scenarios posted above.
Comment:
We are still at a lower high. If US500 breaks above the previous high, then I'll be bullish, but let's all keep in mind that we never re-tested the lows. In my opinion, tech stocks are holding this house of cards up. If those stocks fall, the entire house will fall. As for now, I'm still seeing this as bearish until we've confirmed a new high. We are still firmly in a head-and-shoulders pattern on lower timeframes as well, and on the larger timeframes, we are overbought. But hey, the market is the market, and it will do what it wants. If Nvidia, MSFT, and Apple continue to pump, they may drag the market higher despite the majority of stocks being bearish, but no price goes up forever, and these assets are already severely expensive. There is no real news or macroeconomic fundamentals to push this much higher, so all eyes are on tech right now.