The 3 metrics are the NYA 40-week MA cross, the SPX 12-month MA cross and the slope of the SPX 150-day MA. For someone new to technical analysis, their eyes glaze over. The whozzit 40-week and the whazzit slope? Whatchu talkin' 'bout Willis?
The television business media calls a -10% pullback from a top a correction and a -20% drop off the top is a bear market. This indicator is too fickle and easy to manipulate as proven on the last day of trading last year. The SPX, the S&P 500, which is the United States stock market, was down -20.2% on 12/30/22 ready to lock in a bear market to end 2022 and begin 2023. The market makers would have none of that receiving their orders from their masters to pump stocks into the close and voila, the SPX rallies +0.8% in the final hour of trading in 2022 to end the year down -19.4% (instead of the bear market -20%) so as not to alarm the public with negative bear market talk. Three cheers for the corrupt Wall Street casino! Hip-hip-hurray!
Anyhoo, the NYA has been battling at the 40-week MA since November. Price pops up through announcing the transition into a cyclical bull but then receives a spankdown back below on the weekly basis. The Friday rally sends NYA into the stratosphere now nearly 5 hundo points above the 40-week MA bull-bear line in the sand at 15081 signaling a cyclical bull market ahead. The bulls are throwing confetti.
Give it a few more days to make sure it sticks but the NYA price action can be assumed to be a break-out, then back kiss to the important 40-wk MA, and this test of support is successful, and price bounces higher with a blessing to continue higher. Keep watching NYA 15081 since stocks will be rallying in the short term as long as price remains above. If NYA falls below 15081, jump into a bunker after you sell your longs because there is blood and carnage on the way. For now, it is party time.
For the SPX daily chart, you easily see that the 150-day MA is sloping lower for 2022 and into 2023 so the stock market remains in a cyclical bear market. Note how the 150 flattened in December and was teasing a move higher to begin a new cyclical bull market but alas, the moving average line rolls over lower again as price drops.
The SPX is at 3895 testing the 150-day MA at 3909. It is not the cross that matters. The slope of the 150-day MA is what matters. By definition, price must be above the 150 for many days to pull the moving average higher, thus, this test of the 3909 price resistance is very important.
You can check the 150-day MA slope for all the positions in your portfolio. If you have longs, you want those 150's to be sloping higher, if not, you have a bad trade. If you have shorts, you want those 150-day MA's to be sloping lower, if not, you have a bad trade.
The SPX monthly chart is next with price below the 12-month MA at 4026 signaling the ongoing cyclical bear market. As price moves higher, the 12-mth MA will adjust higher so call it the 4026-4030 range. This is the big test for the US stock market. If the SPX moves above 4030, the stock market is going to run far higher in a super-charged buying orgy. The cyclical bull market will be back in play. It seems like destiny that price will have to come up to challenge the 12 and make the critical bounce or die decision.
For now, the SPX 12-mth MA cross says the stock market remains in a cyclical bear. Thus, 2 metrics are in the cyclical bear and one in the cyclical bull. The cyclical bear market takes precedence until one of the other 2 flip-flop.
The SPX 10-mth MA is at 3941 and serves as a key resistance test going forward. If the SPX moves higher it will test the 3941 resistance and make a bounce or die decision. If price moves above 3941, the test at 4026 is going to happen. If the SPX is rejected by the 10-mth MA at 3941, the stock market will begin deteriorating.
The blue rectangle is shown for the May 2015 stock market top because Keystone calls it the last legitimate top. Stocks were plenty bloated by Federal Reserve money-printing ongoing for over 6 years back then but the obscenities were only just beginning. Human greed knows no bounds. The little green circle shows the Tweezer Bottom created by the Fed that rode in on the pale green horse to save the stock market and protect the wealthy class, as they always do. It makes sense that as the next couple years play out and the recession occurs, the lower landing range for the SPX is likely between those two blue lines. Are you ready for that?
Watch the 3 metrics above so you can confirm what is occurring and make responsible decisions going forward.
If you are bearish, you are hoping and praying that the NYA will collapse below 15081, if it does not, you are screwed because the SPX will be flying towards 4026.
If you are bullish, you are hoping and praying that the SPX will pop to 4026 and the 150-day MA slope will curl higher, if not, you are screwed because the NYA will begin dropping like a rock. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added 9:44 AM EST: SPX 3917. NYA 15614. The SPX pops above the 150-day MA at 3909 and 50-day MA at 3906. The SPX 10-mth MA at 3943 is the big enchilada moving forward as described above; it is the gateway to a bullish paradise and probably where price will make an important bounce or die decision.
Note Added Tuesday Morning, 1/10/23, at 6:00 AM EST: SPX 3892. 50-day MA is 3906. 20-day MA is 3872. 150-day MA is 3908. 20-week MA is 3855. 10-month MA 3940. 12-month MA is 4026. Stocks fly higher yesterday until munchtime with the SPX falling on its sword ending Monday 3 points lower at 3892. Price pops to 3951 trying to break-out above the 10-month MA at 3940 but is spanked down and rejected. The SPX will likely try again. Remember, 3940 would be the gateway to 4026. The SPX sits between the 20 and 50 so bears win big below 3872 and will create carnage under 3855, while bulls win big above 3906-3908 and will catapult to glory above 3940. NYA 15514.
Note Added Wednesday Morning, 1/11/23, at 6:00 AM EST: SPX 3919. The bulls are flexing their muscles overtaking the 3906-3908 resistance, which now becomes support, and setting their sights on the coveted 10-mth MA at 3940. Bulls will be in trouble if they slip back through support at 3906-3908 because bears will smell blood in the water. Bulls must maintain the 3906-3908 support going forward if they want to rally stocks.
Note Added Wednesday Morning, 1/11/23, at 11:19 AM EST: The battle for the 10-mth MA at 3940-3945 continues with price at..... wait for it ....... wait a bit longer for it ...... 3940. Bounce, or die. The bulls need to close above 3940-3945 since this key resistance has been tested a few times over the last couple sessions. It is time for price to make a decision. Is the SPX serious about going higher or is it going to fold like a cheap suit? The 3940-3945 will provide the answer. Since the key inflation report is out tomorrow, don't be surprised if price ends the day parked between 3940-3945 waiting for the data.
Note Added Wednesday Evening, 1/11/23, at 6:21 PM EST: SPX 3970. What say you, inflation data? It drops at 8:30 AM EST only 14 hours away. The bulls need to hold the 3940-3948 support for a couple days and it will then light the way to 4026-4030.
Note Added Sunday Morning, 1/15/23: The SPX ends the week at 3999 not seen since mid-December. The HOD is the palindrome 4004. SPX uses the 10-mth MA at 3945-3951 for support and is gunning for the 12-mth MA at 4035-4040. If 3945 fails, the bears will retake control of the stock market. If 4040 is taken out, stocks are going to run higher and higher for several weeks.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.