SPX to complete the full extension - enroute
See the weekly chart - where a correction after completing the full Fibonacci extension has reached.
Currently neutral until signs of profit taking has occurred and or a sign of a change of hands is presented.
Hello Traders and Analysts,
Breakdown:
1. Note
2. Contents
3. Research breakdown
4. Education recap
5. Information on Lupa.
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged short, due to purchasing further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities. However, note - the overall trend is bullish.
Master Key for zones
Bearish Channel upon a diagonal forming?
8Hour time frame.
Not looking trade this pattern as yet, due to the fact, the channel upon the higher time frames, looks to create a high probability of rejecting the 4400 mark and creating a further high.
However, keep in mind this scenario will form an opportunity for short term traders.
See below for the measured update to the 8-hour rising channel. You can look for a test, retest break sell - which is known as a
The Daily chart shows us a steep wedge formation - just like the three day chart.
Weekly Chart
The Fibonacci from the swing low - to the top of the market, which created our new "0" as the new all time high part of the structure.
The Continuation of the weekly imbalance had created a new area on the weekly, and bi-monthly timeframe - which offered a 0.236 Fibonacci retracement, indicating that the buying imbalances are still present. [This is now the weekly zone to add long positions].
Now the -0.27, -0.618 extension targets are reached.
The Wedge channel had begun and created a very strong channel with an effective structure of the sellers attempting to make an imbalance. The channel has now provided areas where price can pivot to.
The monthly has a future strong imbalance formed.
The three month indicates where price can be used for buying activity* So long as price reacts to the 61.8 & 70.5% levels.
See the Pathway where price can take us, using the probability of a bearish imbalance formation.
Entry zone?
Positions of where we will enter, based upon two scenarios.
Starting upon a clean rejection from -0.618 Fibonacci extension.
Why? Due to the highly probable imbalance which is forming upon the daily and three day charts respectively.
Scenario II - consists of a pullback of the market once the low has been made, where price always corrects. Keep in mind the -0.618 can and has the likelihood of returning to 4465*+, assess the reactive level again upon an impending sell. Do your due diligence. Where price makes an all time high, price will revert most like back to "0" Fibonacci zero before reloading a bullish run. However, with the -0.786 Yet to be reached, price can offer this level to provide a large pivot point upon an imbalance created, with a liquidity spike capturing stop losses to most [but in reality is completing the sequence].
See the second chart proposing the outlook where the full completion occurs.
SPX VS VIX
Refer to the weekly negatively correlated SPX and associated Volatility index.
Vix Chart - please keep in mind that the VIX has correlation, causation is caused from the associated short term risk of the sentiment change within profit taking, impending policy changes, health warnings, war and other macro-factors.
Refer to the DXY chart to follow the imbalance.
Adding Volume analysis
to assist identifying the current up, down interest where buyers, sellers are at present.
This helps assist with searching for High Volume Nodes ( HVN ) which are peaks in volume at or around a price level, the operation behind this is buyers, sellers provide high volume , keeping price steady over a trading range e.g. 1-2weeks+ offering an area of fair value. This will help look for shorter term ranges to trade.
Cross-asset comparison;
Looking to the DXY, US05-US02Y short term yields, look towards the critical levels here where DXY and USDJPY shows an opportunity where imbalances have established.
Quantitative easing (QE) is where the increasing the money supply of the system, where the Central Bank creates new money and uses the money to make asset purchases. These asset purchases inject the new money into the system.
(QE) tapering will be seen on interest rates. The impact is almost immediate - affecting the sentiment. (QE) can be used where interest is at zero %, as the central bank(s) want to introduce more stimulus.
Conversely - when easing occurs, adoption of a new introduction is will send the interest rates shooting, the money to those who can offer the highest interest rates and this competition will send the interest rates skyrocketing. This directly affects the Equity market and the FX safe-haven pairs immediately.
Employment
In relation to employment is closely linked to that state of inflation or deflation in the economy. When there is excess money in the economy, the confidence is upbeat and CPI [consumer price index] aligns with goods production resulting in people getting employed in the economy or in this case - returning to the original job before the pandemic. Therefore quantitative easing (QE) is positively correlated to a higher employment level* subject to NFP "True" figure of new jobs created, not in the aspect of 'Return to work'.
See the article snippet below affecting the US Market.
"On Labor Day, COVID-era expanded unemployment benefit programs expired. Those temporary programs included the $300 weekly bonus checks as well as coverage for those who are normally ineligible for unemployment insurance, like gig workers and the long-term unemployed. More than 11 million people were impacted by the cutoff, and roughly 7.5 million people lost their benefits entirely". - Source CNET.com/personal-finance/your/money
Inflation or Deflation?
inflation is likely to turn into deflation through (QE) where tapering pulls money out of the system, where less money (as compared to before) chasing the goods available, making every good less expensive. Great for consumers?!
Daily Fibonacci using the USD JPY as an example
The technical aspect here is price will need to engineer a long movement so when coming to a pivotal point on the Fibonacci extension target, price will react here, allowing discounted buy opportunities. However, price is within a trading range at this moment - this is a point of interest or (POI), where price has consolidated heaps
Using the inverse Fibonacci based upon a channel formation for the short covering position, based upon a tapering scenario
Chinese situation:
A quick insight to how the Chinese market works
The chinese property is leased for 70 years from the government who will be brought up by Real estate companies who will design and pre-sale units to investors, who will buy off plan using deposits.
The cycle of funds will allow the developer to fund the next, complete or buy further leases for the next project, leaving a debt cycle
Referring to China A50 USD - the FTSE China 50.
Collapse of Evergrande
Regulators have warned that its $305 billion of liabilities could spark broader risks to China's financial system if its debts are not stabilised. This will have ripple effects upon the US, Australian market relating to commodity imports from Australia with Copper, Iron has hit these commodities with creating imbalance sells upon the metals.
China - will the CCP allow Evergrande to default?
"Evergrande's woes also pressured the broader property sector, with Hong Kong-listed shares of small-sized Chinese developer Sinic Holdings (2103.HK) down 87%, wiping $1.5 billion off its market value before trading was suspended" Reuters.
Whilst the Chinese real estate market has large multiple ratio where the Chinese seek the real estate to be a wealth inidcator.
Despite the prices of price to income ratio as a whole in china the property price is 27.89x the avg income.
Expressed as a mortgage % of income is 223% of monthly income.
Source:
numbeo.com/property-investment/rankings_by_country.jsp?title=2021-mid®ion=142
What do you think about the current state?
Do you enjoy the setups?
*Professional analyst with 5+ years experience
*Focus on technical output not fundamentals
*Position and swing trades
*Provide updates where necessary - with new updated ideas tracking the progress.
If you like the idea, please leave a like or comment.
To all the followers, thank you for your continued support.
Thanks,
LVPA MMXXI
Currently neutral until signs of profit taking has occurred and or a sign of a change of hands is presented.
Hello Traders and Analysts,
Breakdown:
1. Note
2. Contents
3. Research breakdown
4. Education recap
5. Information on Lupa.
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged short, due to purchasing further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities. However, note - the overall trend is bullish.
Master Key for zones
- Red = Three Month
- Blue = Monthly
- Purple = weekly
- Scarlet [Red] - Four day
- Orange = Daily
- Green = 8 Hour, 16hour
- Grey = 4hour
- Pink = 1 hour
Bearish Channel upon a diagonal forming?
8Hour time frame.
Not looking trade this pattern as yet, due to the fact, the channel upon the higher time frames, looks to create a high probability of rejecting the 4400 mark and creating a further high.
However, keep in mind this scenario will form an opportunity for short term traders.
See below for the measured update to the 8-hour rising channel. You can look for a test, retest break sell - which is known as a
The Daily chart shows us a steep wedge formation - just like the three day chart.
Weekly Chart
The Fibonacci from the swing low - to the top of the market, which created our new "0" as the new all time high part of the structure.
The Continuation of the weekly imbalance had created a new area on the weekly, and bi-monthly timeframe - which offered a 0.236 Fibonacci retracement, indicating that the buying imbalances are still present. [This is now the weekly zone to add long positions].
Now the -0.27, -0.618 extension targets are reached.
The Wedge channel had begun and created a very strong channel with an effective structure of the sellers attempting to make an imbalance. The channel has now provided areas where price can pivot to.
The monthly has a future strong imbalance formed.
The three month indicates where price can be used for buying activity* So long as price reacts to the 61.8 & 70.5% levels.
See the Pathway where price can take us, using the probability of a bearish imbalance formation.
Entry zone?
Positions of where we will enter, based upon two scenarios.
Starting upon a clean rejection from -0.618 Fibonacci extension.
Why? Due to the highly probable imbalance which is forming upon the daily and three day charts respectively.
Scenario II - consists of a pullback of the market once the low has been made, where price always corrects. Keep in mind the -0.618 can and has the likelihood of returning to 4465*+, assess the reactive level again upon an impending sell. Do your due diligence. Where price makes an all time high, price will revert most like back to "0" Fibonacci zero before reloading a bullish run. However, with the -0.786 Yet to be reached, price can offer this level to provide a large pivot point upon an imbalance created, with a liquidity spike capturing stop losses to most [but in reality is completing the sequence].
See the second chart proposing the outlook where the full completion occurs.
SPX VS VIX
Refer to the weekly negatively correlated SPX and associated Volatility index.
Vix Chart - please keep in mind that the VIX has correlation, causation is caused from the associated short term risk of the sentiment change within profit taking, impending policy changes, health warnings, war and other macro-factors.
Refer to the DXY chart to follow the imbalance.
Adding Volume analysis
to assist identifying the current up, down interest where buyers, sellers are at present.
This helps assist with searching for High Volume Nodes ( HVN ) which are peaks in volume at or around a price level, the operation behind this is buyers, sellers provide high volume , keeping price steady over a trading range e.g. 1-2weeks+ offering an area of fair value. This will help look for shorter term ranges to trade.
Cross-asset comparison;
Looking to the DXY, US05-US02Y short term yields, look towards the critical levels here where DXY and USDJPY shows an opportunity where imbalances have established.
Quantitative easing (QE) is where the increasing the money supply of the system, where the Central Bank creates new money and uses the money to make asset purchases. These asset purchases inject the new money into the system.
(QE) tapering will be seen on interest rates. The impact is almost immediate - affecting the sentiment. (QE) can be used where interest is at zero %, as the central bank(s) want to introduce more stimulus.
Conversely - when easing occurs, adoption of a new introduction is will send the interest rates shooting, the money to those who can offer the highest interest rates and this competition will send the interest rates skyrocketing. This directly affects the Equity market and the FX safe-haven pairs immediately.
Employment
In relation to employment is closely linked to that state of inflation or deflation in the economy. When there is excess money in the economy, the confidence is upbeat and CPI [consumer price index] aligns with goods production resulting in people getting employed in the economy or in this case - returning to the original job before the pandemic. Therefore quantitative easing (QE) is positively correlated to a higher employment level* subject to NFP "True" figure of new jobs created, not in the aspect of 'Return to work'.
See the article snippet below affecting the US Market.
"On Labor Day, COVID-era expanded unemployment benefit programs expired. Those temporary programs included the $300 weekly bonus checks as well as coverage for those who are normally ineligible for unemployment insurance, like gig workers and the long-term unemployed. More than 11 million people were impacted by the cutoff, and roughly 7.5 million people lost their benefits entirely". - Source CNET.com/personal-finance/your/money
Inflation or Deflation?
inflation is likely to turn into deflation through (QE) where tapering pulls money out of the system, where less money (as compared to before) chasing the goods available, making every good less expensive. Great for consumers?!
Daily Fibonacci using the USD JPY as an example
The technical aspect here is price will need to engineer a long movement so when coming to a pivotal point on the Fibonacci extension target, price will react here, allowing discounted buy opportunities. However, price is within a trading range at this moment - this is a point of interest or (POI), where price has consolidated heaps
Using the inverse Fibonacci based upon a channel formation for the short covering position, based upon a tapering scenario
Chinese situation:
A quick insight to how the Chinese market works
The chinese property is leased for 70 years from the government who will be brought up by Real estate companies who will design and pre-sale units to investors, who will buy off plan using deposits.
The cycle of funds will allow the developer to fund the next, complete or buy further leases for the next project, leaving a debt cycle
Referring to China A50 USD - the FTSE China 50.
Collapse of Evergrande
Regulators have warned that its $305 billion of liabilities could spark broader risks to China's financial system if its debts are not stabilised. This will have ripple effects upon the US, Australian market relating to commodity imports from Australia with Copper, Iron has hit these commodities with creating imbalance sells upon the metals.
China - will the CCP allow Evergrande to default?
"Evergrande's woes also pressured the broader property sector, with Hong Kong-listed shares of small-sized Chinese developer Sinic Holdings (2103.HK) down 87%, wiping $1.5 billion off its market value before trading was suspended" Reuters.
Whilst the Chinese real estate market has large multiple ratio where the Chinese seek the real estate to be a wealth inidcator.
Despite the prices of price to income ratio as a whole in china the property price is 27.89x the avg income.
Expressed as a mortgage % of income is 223% of monthly income.
Source:
numbeo.com/property-investment/rankings_by_country.jsp?title=2021-mid®ion=142
What do you think about the current state?
Do you enjoy the setups?
*Professional analyst with 5+ years experience
*Focus on technical output not fundamentals
*Position and swing trades
*Provide updates where necessary - with new updated ideas tracking the progress.
If you like the idea, please leave a like or comment.
To all the followers, thank you for your continued support.
Thanks,
LVPA MMXXI
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