Decision day is now THIS Monday?

 It has been 5 DAYS and the market can't break lower!   The S&P 500 has pierced the June low 3 times, but NOT on a closing basis!

Other indexes, not the S&P 500, have made NEW LOWS on a closing basis.  But the SPY is the primary hold out.    The news has been trumpeting new lows, which in charting is really bad at this stage, to scare investors to sell. 

But if its such a terrible market, why is the S&P 500 levitating for FIVE DAYS above the June low, barely, on a closing basis?  This is why I use the SPY as a gauge, it has a broader representation on the core 500 companies in the USA.

The market is either trying to build energy for an epic fail, which would likely be Monday morning, or a 'come back'.  .

This weekend is shaping up to be the decision.  I wrote a week ago we would know Monday, but here we are!  Who could have guessed multiple market indexes would fail, but not the SPY 5 days later?

Don't get me wrong the US and world markets will be sliced 20% lower in the next 6-9 months, and I think 70% lower from here is in the cards.  But for now I am looking to get short on a rally, I may buy some short instruments today incase Monday is the epic fail, but without leverage.  The leveraged ETF's should get hammered on a relief rally due to the various indexes failing this week, and running 'time off the clock' 5 days later.

Charting wise an SPY closing below 362 its bad, indicating going lower 20% in quick order.   But dancing on this June low for 5 days makes a 'new low' squishy now, this line doesn't have the same meaning as it did on Monday.  There is now wiggle room!

A perfect close will be 359.50-361.90 range, making it a coin toss for Monday, nobody will go all in in either direction unless you like to put your life savings on lottery tickets hoping to pay off.

A break below 359.50 on a closing basis is as good as any bet you could make that there WILL be in quick order a 20% haircut! 

Good luck!

Target is 30% lower from the high

I have been posting about the critical points in the market decline, and is has been triggered.

The market has broken the trend line in place since the low in March 2020, I expect fall of 20% lower from here is in the cards.  If you are more optimistic, a VERY strong confirmation is breaking the SPY low of 363 in June 2022 on a CLOSING basis, we are headed to ~300.  IF we break the up trend in place since 2009, on a CLOSING basis, we can see an 80% stock market collapse.

I don't think we will break the up trend since 2009 for a bit, maybe in a year (if ever).

Click on the chart at bottom for greater detail.

So if you want to catch a falling knife, a good place to go from cash to the market is on the up trend from 2009.  The question is what to buy? Why the future of course!

My current list:

India
Mexico
Artificial intelligence & Robotics
Crypto financial companies - SERVING the existing banking system,
Gold / Bitcoin / US Bonds  mix.

Monday is Decision day!

 EOD of Friday the market was 'saved' and it recovered above the line I have been posting about.

Over the weekend the Fed asserted the next raise maybe 1%.  I believe this was done specifically to try to get the market to tank at this critical level.  Why? Because the Fed DOESN'T want to keep hiking rates, but believes it does if we are seeing markets ignore their efforts and inflation comes in higher.

They want to craft a story that when the Fed raises rates, markets and inflation falls.

Today we will get our answer.  Can the market close above the line yet again? If it does the bull is resuming!  If we are below the line today, I wouldn't go all in short just yet.  We need some follow through.   Cash is best right now, good luck!

Breaking support - 20% decline ahead?

 Today is quadruple witching, and this morning we are breaking the trend line I posted about.
If we are going to reverse it will be by EOD today or Monday with an "event" announced over the weekend for a 'save' breaking the trendline.

By EOD Monday we will have a definitive direction of the market, 20% lower ahead or a rally for a bit, perhaps into the midterm elections?

Take bets, get rewarded big (long or short) or wait for the directional choice.

Good luck.

Closer look at support levels

 If you haven't read my previous post Meaningful Support levels, please do so before reading on.

I wanted to pull in for a closer look at the support level, if broken, on a market CLOSE (not a open below and closes above, etc) we can expect a meaningful stock decline. Depending on when, the close must close below the green rising line, range of S&P 500 385 (tomorrow) -395 (oct 24th).  A break above the line is a bullish indicator.

This trend line up has been in tact since March 2020.  A close below we should expect the market to decline by a full 20% over the month(s) following.

On a positive note, the world is worse off, much much worse off than USA.  For this reason, we may see INFLOWS of capital into USA and we may resume the bull for up to 9 months ahead.  I am not convinced the market will fall 20% in the near term.  This is a watch and wait to understand the direction.

Meaningful Market Support Levels

The chart below is the S & P 500 support lines.  Red lines are resistance, if the market breaks above it on a weekly closing basis, we have a bull case for the market.  A break below green support lines, the bear will roar.  

Below this summary I have the details.  Given above we are about 2% striking distance downward to first support, but if broken, another down of 20% from current levels on the index.  That level if ever broken is entering the realm of panic.  On the upside if sold today, you would 'miss out' on 10%  gain before the all clear to buy.  

Details

As I write this, S & P is at 390, the first major support line is at 383ish.   A break below will have a next support at 300-315 range (depending on time).  That is material support and should have a multi year recovery.  Breaking below that is dismally lower at 120 ish. ( depending on time).

On a positive note a break ABOVE 429 is very bullish, and on a closing basis a good risk to buy.  Obviously anything above the all time high is pure bull run at  481.  

Action

Take note of the levels above, they are critical for the health of your 401K.

NOTE: I Purchased RGLD today at 90, since the Dollar is strong, euro weak, gold is weak.  For risk v reward we need stronger dollar, weaker euro, weaker gold price.   All have moved to extremes already, I am trying to catch a falling knife. :)