Indice S&P 500Short
Be careful at this high, as momentum may exhaust
Daily:
- Some early sign of a possible momentum loss at key resistance (4140 - 4200)
- Watch haDelta+ and haOscillator
Weekly:
- EWO is still deep red (bearish)
- haDelta+ and haOscillator indicators are reaching their range tops, buyers may lose control within 1-3 weeks
- VERY IMPORTANT to see the forward looking Monthly Kijun sen (26 Months average calculated ahead) is up to 4015. This means that the spot Monthly Kijun will be moving up from 3905 to 4015 in two months time. We can also say, that very likely the touch of spot Monthly Kijun forced some long term trend following models to buy, and pushed the price higher.
Should market get any kind of shock leading to break this 3905-4015 zone this year, the Bearish move would become very strong, targeting 3200-3300. Don't forget, SPX hasn't closed below its Monthly Kijun since the Covid collapse in 2020, and if we look further back in time, it has always closed above it since February/2010.
I think the highest probability is that for 1-2 weeks of buy the dips market will turn lower and retest 3915-4000 zone. Some will see that again as a buying opportunity at Monthly support and many people and systems will envision an inverse H&S signal. On the follow we could see one more pop to 4100. By then the Monthly Kijun will rise so much, and get so close to the Weekly Kijun (purple line), that a final decision on direction will have to be made, and I can tell you that move will be massive.
Strategy: It is too early to go outright short, but probably it's time to buy some short dated Put spreads with 1:1 ratio, and maybe some January put spreads with 1:2 ratio, setting the Short Put strike at around 3300.
- Some early sign of a possible momentum loss at key resistance (4140 - 4200)
- Watch haDelta+ and haOscillator
Weekly:
- EWO is still deep red (bearish)
- haDelta+ and haOscillator indicators are reaching their range tops, buyers may lose control within 1-3 weeks
- VERY IMPORTANT to see the forward looking Monthly Kijun sen (26 Months average calculated ahead) is up to 4015. This means that the spot Monthly Kijun will be moving up from 3905 to 4015 in two months time. We can also say, that very likely the touch of spot Monthly Kijun forced some long term trend following models to buy, and pushed the price higher.
Should market get any kind of shock leading to break this 3905-4015 zone this year, the Bearish move would become very strong, targeting 3200-3300. Don't forget, SPX hasn't closed below its Monthly Kijun since the Covid collapse in 2020, and if we look further back in time, it has always closed above it since February/2010.
I think the highest probability is that for 1-2 weeks of buy the dips market will turn lower and retest 3915-4000 zone. Some will see that again as a buying opportunity at Monthly support and many people and systems will envision an inverse H&S signal. On the follow we could see one more pop to 4100. By then the Monthly Kijun will rise so much, and get so close to the Weekly Kijun (purple line), that a final decision on direction will have to be made, and I can tell you that move will be massive.
Strategy: It is too early to go outright short, but probably it's time to buy some short dated Put spreads with 1:1 ratio, and maybe some January put spreads with 1:2 ratio, setting the Short Put strike at around 3300.
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