The Markets Are Weird...
Diupdate
Just when I thought SPX was bearish...
...the bulls pull me back in.
Not many of us in here made millions from trading. One of the reasons is that the markets are weird.
Just when we believe that the bottom is in, another bottom appears.
Just when we believe that more down is coming, no more down comes.
When you open TradingView, and look at the prices, don't fall for the trap. These are the prices the seller put up. Just like browsing the retail markets, you browse the trade markets.
Price action is what the seller wants you to buy into.
The standard, dollar-denominated SPX is shaping into a bear flag.
The not-dollar-denominated SPX is shaping into a bull flag.
This is basically SPX measured against the average non-US buyer.
Which one is right???
It is at these points when buyers/sellers get trapped. They expect one movement, and the opposite comes. The "I shorted the bottom" motto must not be misused, everyone can fall for the trap.
The Stock Market is about long-term strategies. What matters is the stance you keep. Your stance must not get shaken-up from the news.
Last year was the year the classical investment strategy failed.
And that occurred in a period when the US economy was not in a technical recession.
While we cannot perform meaningful measurements on this chart, the trend change cannot be ignored. From a period of the equity-bond pair being bulletproof, we are heading into a period when it is full of holes. Don't believe me? Listen to one smarter than me explaining it...
youtube.com/watch?v=jJnRfcByzy4
And the culprit of last year's pain was bonds.
I am comparing it with the META price action from last year.
I expect weakness in bonds for many years.
Weakness in Bonds can mean only one thing. Money outflowing from bonds and into alternative investments. Believe it or not, in this environment equities may seem like a reasonable thought.
To confirm this, we must perform some relative analysis on charts.
The KST-Based MACD indicator I developed works beautifully when we want to analyze the performance of a trend.
It basically ignores up-down movement. It takes into consideration the relative strength gained-lost. It is a cousin of RSI, and is analyzed like Stochastic RSI / MACD would be.
This indicator helps us pinpoint trend strength shifts. A bearish signal could mean that a fast growth is beginning to slow down. A bullish signal could mean that a slow growth/drop might turn bullish/go faster. I will not go into much detail as to what is considered a bullish/bearish signal. An explanation might get too long for this idea. For now, take my word for it...
While the US economy (SPX * DXY) might not outright crash, weakness in SPX is apparent.
This chart suggests that the bull-flag that is shaping on the SPX * DXY chart is probably a blow-off-top behavior. This however does not mean that the top is in.
Price has just reached the mean.
From the above we realize that SPX behavior is nearly identical to the 1953 period.
More info about it in this idea below:
Not all is well for SPX however...
Relative weakness of SPX appears, when compared against other continents.
Curiously, a bullish relative performance can be seen when compared against Japan.
There are however many obstacles for SPX to jump through.
The Bitcoin Bubble was born to swallow the Equity Bubble.
Besides crypto, the arch-enemy of SPX are commodities. And the best performer of commodities may be oil.
From this chart we conclude that oil will beat anything SPX + Gold might throw at it.
Perhaps Buffett was right after all, when he called for investing into oil.
Finally, a couple of charts for these eternal Gold Bulls...
Tread lightly, for this is hallowed ground.
-Father Grigori
P.S. Believe it or not, this is a serious idea. Many hate equity bulls, just like they hate gold bears. Some charts do suggest bullishness for equities. Either we trust the analysis or we dictate it.
...the bulls pull me back in.
Not many of us in here made millions from trading. One of the reasons is that the markets are weird.
Just when we believe that the bottom is in, another bottom appears.
Just when we believe that more down is coming, no more down comes.
When you open TradingView, and look at the prices, don't fall for the trap. These are the prices the seller put up. Just like browsing the retail markets, you browse the trade markets.
Price action is what the seller wants you to buy into.
The standard, dollar-denominated SPX is shaping into a bear flag.
The not-dollar-denominated SPX is shaping into a bull flag.
This is basically SPX measured against the average non-US buyer.
Which one is right???
It is at these points when buyers/sellers get trapped. They expect one movement, and the opposite comes. The "I shorted the bottom" motto must not be misused, everyone can fall for the trap.
The Stock Market is about long-term strategies. What matters is the stance you keep. Your stance must not get shaken-up from the news.
Last year was the year the classical investment strategy failed.
And that occurred in a period when the US economy was not in a technical recession.
While we cannot perform meaningful measurements on this chart, the trend change cannot be ignored. From a period of the equity-bond pair being bulletproof, we are heading into a period when it is full of holes. Don't believe me? Listen to one smarter than me explaining it...
youtube.com/watch?v=jJnRfcByzy4
And the culprit of last year's pain was bonds.
I am comparing it with the META price action from last year.
I expect weakness in bonds for many years.
Weakness in Bonds can mean only one thing. Money outflowing from bonds and into alternative investments. Believe it or not, in this environment equities may seem like a reasonable thought.
To confirm this, we must perform some relative analysis on charts.
The KST-Based MACD indicator I developed works beautifully when we want to analyze the performance of a trend.
It basically ignores up-down movement. It takes into consideration the relative strength gained-lost. It is a cousin of RSI, and is analyzed like Stochastic RSI / MACD would be.
This indicator helps us pinpoint trend strength shifts. A bearish signal could mean that a fast growth is beginning to slow down. A bullish signal could mean that a slow growth/drop might turn bullish/go faster. I will not go into much detail as to what is considered a bullish/bearish signal. An explanation might get too long for this idea. For now, take my word for it...
While the US economy (SPX * DXY) might not outright crash, weakness in SPX is apparent.
This chart suggests that the bull-flag that is shaping on the SPX * DXY chart is probably a blow-off-top behavior. This however does not mean that the top is in.
Price has just reached the mean.
From the above we realize that SPX behavior is nearly identical to the 1953 period.
More info about it in this idea below:
Not all is well for SPX however...
Relative weakness of SPX appears, when compared against other continents.
Curiously, a bullish relative performance can be seen when compared against Japan.
There are however many obstacles for SPX to jump through.
The Bitcoin Bubble was born to swallow the Equity Bubble.
Besides crypto, the arch-enemy of SPX are commodities. And the best performer of commodities may be oil.
From this chart we conclude that oil will beat anything SPX + Gold might throw at it.
Perhaps Buffett was right after all, when he called for investing into oil.
Finally, a couple of charts for these eternal Gold Bulls...
Tread lightly, for this is hallowed ground.
-Father Grigori
P.S. Believe it or not, this is a serious idea. Many hate equity bulls, just like they hate gold bears. Some charts do suggest bullishness for equities. Either we trust the analysis or we dictate it.
Catatan
One extra chart regarding macro SPX analysis using KST.Catatan
The Pioneering Daniel DrewThe second half of the 19th century saw men such as Jay Gould, James Fisk, Russell Sage, Edward Henry Harriman, and J.P. Morgan turn the fledgling stock market into their personal playground, and their maneuvers weren't always the most honorable. However, Daniel Drew was a true pioneer of fraud and stock market manipulation.
Source: Investopedia
I never knew that J.P. Morgan was a penultimate fraudster...
Thank God SEC exists, and there is no more fraud ;)
Catatan
Just when I thought DJI was bullish......the bears pull me back in.
SPX to lose more strength against DJI?
If this chart holds true, more recession is coming...
Catatan
Catatan
Indicators are also quite weird...
Catatan
More apples?Catatan
KST works in a peculiar way. It is weird, just like the markets are.Many times before I explained a downward KST as a divergence. It seems though that a downward KST is nothing more than a slow/down wave, in the eternal cycle of the markets.
If the post 2015 era is a slow period in relative terms, how fast can the fast period be?
Catatan
Trading ditutup: target tercapai
Bull Flag broke out. Thank you for the hate comments.
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