[Where Are They Now] S&P 500, Time to GTFO?Where is the S&P500 since my last chart back in mid Aug, link:
- Weekly T.D. Sequentials landed a top at an Aggressive13. Commonly a Green9 signals that a price reversal is approaching next. However, around this time the restructuring of NAFTA with Mexico was announced to be completed/ almost completed which drove the market confidence further than expected. This is one case, where news does have the ability to drive price further past its actual turning time temporary.
- Currently the S&P500 on the weekly timeframe is trading on a Red2 candle below the Red1. This, to anyone using T.D. Sequentials, is one of the most assuring indications that it is time to enter a short position, especially considering this is a much larger timeframe as opposed to the daily.
- One thing to observe here is that while a Kijnu rejection led to a continued price up movement in May, once it broke above Kijun resistance the distance between the price and Kumo cloud support is noticeably smaller now than before. This is an increasing bearish signal. Furthermore, I strongly dislike the upper wick we currently have created this week, it had a strong rejection landing it right back under the Kijun resistance.
- C.M.F. volume I commented on last time, not much has changed since. Company buy backs of their stock only holds the price up so long. If higher C.M.F. buy volume does not show up soon, it could be a sign of something worse coming.
- Weekly MACD observed a bearish crossover as well, similar to the last scare we had earlier in the year. What is different now? This one was noticeably more aggressive (illustrated in chart).
I am aware that when it come to News that drive market price up or down, it is purely subjective as to what News specifically was responsible for the price run. It is of my believe that the NAFTA restructuring news was responsible for the exaggerated price movement past the Green9 landing it into an Aggressive13. Those unfamiliar with what an Aggressive 13 is, it is a very strong indication that a harsher than normal (normal being a Green9) price reversal is approaching very soon. My published chart on the S&P500 2 months ago suggested that midterms themselves would be one strong contributing factor responsible for a correction in the US markets due to political uncertainty. Hypothetically, moving political bias aside, should it occur that the election of a party whether new or current to be in power with regards to the House and Senate creates additional changes in price movement. That would indicate some level of proof, at least for me personally, that politics was one of the factors possibly involved here.
That said everyone has a different narrative regarding markets, I am also well aware that it could be a number of many other factors that are responsible for the current situation as well, and that politics may have played no role in this but merely a result of coincidence in timing.
It is important to note that I am not claiming that the market is crashing at the moment as it was at the start of the 08' crash. I am of the belief that a price drop below 2130 (utilizing methods not outlined in this publication) would be the sign of a Market Crash quickly approaching, so we have quite a ways to go. I am advocating, should next week's candle be trading below the current close, thus making it a Red3- that it is time now to start paying attention to the market very closely. Other methods also not included in this publication strongly indicate that prices in the market have been strongly overvalued for a while now, specifically within the Tech sector.
