S&P and Many Markets to Make L-H Swing? Fed Cutting Rates 100%!
Many equity charts look similar. Amazing how gains from October.3rd/2019- February 20th/2020 got erased in 6 days.
We are now in a downtrend, and we should expect a lower high to be made. I am looking for this swing as long as we remain below the break out zone indicated by the arrow at the 3230 zone. Have some fib targets to watch out for where I will await and see some sort of price action indicating a potential lower high swing.
Remember, a lower high swing is NOT confirmed until we make a lower low, meaning and break and close below recent lows at 2854. If you await that break, it means yes, your risk vs reward may not be the greatest, but the probability of success is higher. Whereas a red candle at just a fib level will give you a better risk vs reward, but a lower probability of success.
What I am watching closely is the Bond market. If I see stocks making a pullback, AND see Bonds go up as well, I would be dubious of markets holding onto gains. If stocks move up AND we see bonds falling, we are seeing money leave bonds and go back into stocks.
Of course bonds are now being traded for capital gains rather than yield lol. People are frontrunning Fed cuts. We now know the Fed is cutting 100%, with fed futures showing the probability of the Fed cutting this month by 50 basis points around 95%.
cmegroup.com/trading/interest-rates/countdown-to-fomc.html
Goldman Sachs also came out saying they expect 75 basis points to be cut from now until June 2020.
If you follow my work, I have been saying this would happen, and that central banks and governments needed an excuse to save face. Enter coronavirus. Economy was already falling apart before this virus. Now they can say they have to cut rates and go back to QE even when they do not really want to because the economy was booming before until this virus came along.
We are now in a downtrend, and we should expect a lower high to be made. I am looking for this swing as long as we remain below the break out zone indicated by the arrow at the 3230 zone. Have some fib targets to watch out for where I will await and see some sort of price action indicating a potential lower high swing.
Remember, a lower high swing is NOT confirmed until we make a lower low, meaning and break and close below recent lows at 2854. If you await that break, it means yes, your risk vs reward may not be the greatest, but the probability of success is higher. Whereas a red candle at just a fib level will give you a better risk vs reward, but a lower probability of success.
What I am watching closely is the Bond market. If I see stocks making a pullback, AND see Bonds go up as well, I would be dubious of markets holding onto gains. If stocks move up AND we see bonds falling, we are seeing money leave bonds and go back into stocks.
Of course bonds are now being traded for capital gains rather than yield lol. People are frontrunning Fed cuts. We now know the Fed is cutting 100%, with fed futures showing the probability of the Fed cutting this month by 50 basis points around 95%.
cmegroup.com/trading/interest-rates/countdown-to-fomc.html
Goldman Sachs also came out saying they expect 75 basis points to be cut from now until June 2020.
If you follow my work, I have been saying this would happen, and that central banks and governments needed an excuse to save face. Enter coronavirus. Economy was already falling apart before this virus. Now they can say they have to cut rates and go back to QE even when they do not really want to because the economy was booming before until this virus came along.
Clause de non-responsabilité
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