Hello all,
This analysis is on the SPX weekly, this last trading week (2/24-2/28) was one of the bloodiest in the history of the stock market.
Facts:
-The drop is due to Corona virus fears and the economy slowing down as the world quarantines itself off.
-The price difference tool indicates a -15.90% drop on the SPX if we measure from the very top at around 3390 to the bottom at about 2860.
Unknowns:
-Is this drop simply a correction resulting from retail pumps from communities like r/wallstreetbets?
-Or is this drop the start of a full blown recession which could last months or years?
Correction or Recession!
The Chart:
-The top blue line is is the overhead resistance, it has been respected since at least 2013.
-The bottom red line is the lower support line and has been respected since 2009.
-Think of the word "respect" in the context as a propensity to not want to cross.
- The green line is a shakier support, not as solid as the red or the blue, observe that it HAS been crossed.
The Play:
-These upcoming weeks will be critical for determining what action should be taken going further.
-From the chart we can see that the violent drop to 2850 was bought back up to 2950 by the close of the trading week on Friday.
-This is a fairly strong bounce and evidence for at least a temporary consolidation at these levels.
-This is also evidence for a correction option over a recession option.
Wait until mid next week, if the green line has been violated again then start thinking about selling.
I suspect we will hang in these levels for a bit.
If the red line gets broken next week sell everything and head to your prepper house ASAP cause this ship going down.
HOWEVER
-This is about the only evidence for a correction.
-The fundamentals look really bad, the handling of this so far in the media does not look promising.
-This is because of the nature of the virus to be able to have carriers with no symptoms who spread the virus unknowingly.
-I personally think Trumps recent handling of the virus threat (his comments that the virus might be used as a partisan tool) is going to spook the market. We will see on Monday.
Final Thoughts
-Right now there is evidence that we will probably bounce in between 2800 and 3000 for a few weeks.
-If we don't start moving out of the 2800 and 3000 range in a few weeks start thinking of a sell plan.
-If 2560 breaks sell everything.
If your gambling the buy some puts with a September exp, wait a week or so to do this premiums are really high now.
This analysis is on the SPX weekly, this last trading week (2/24-2/28) was one of the bloodiest in the history of the stock market.
Facts:
-The drop is due to Corona virus fears and the economy slowing down as the world quarantines itself off.
-The price difference tool indicates a -15.90% drop on the SPX if we measure from the very top at around 3390 to the bottom at about 2860.
Unknowns:
-Is this drop simply a correction resulting from retail pumps from communities like r/wallstreetbets?
-Or is this drop the start of a full blown recession which could last months or years?
Correction or Recession!
The Chart:
-The top blue line is is the overhead resistance, it has been respected since at least 2013.
-The bottom red line is the lower support line and has been respected since 2009.
-Think of the word "respect" in the context as a propensity to not want to cross.
- The green line is a shakier support, not as solid as the red or the blue, observe that it HAS been crossed.
The Play:
-These upcoming weeks will be critical for determining what action should be taken going further.
-From the chart we can see that the violent drop to 2850 was bought back up to 2950 by the close of the trading week on Friday.
-This is a fairly strong bounce and evidence for at least a temporary consolidation at these levels.
-This is also evidence for a correction option over a recession option.
Wait until mid next week, if the green line has been violated again then start thinking about selling.
I suspect we will hang in these levels for a bit.
If the red line gets broken next week sell everything and head to your prepper house ASAP cause this ship going down.
HOWEVER
-This is about the only evidence for a correction.
-The fundamentals look really bad, the handling of this so far in the media does not look promising.
-This is because of the nature of the virus to be able to have carriers with no symptoms who spread the virus unknowingly.
-I personally think Trumps recent handling of the virus threat (his comments that the virus might be used as a partisan tool) is going to spook the market. We will see on Monday.
Final Thoughts
-Right now there is evidence that we will probably bounce in between 2800 and 3000 for a few weeks.
-If we don't start moving out of the 2800 and 3000 range in a few weeks start thinking of a sell plan.
-If 2560 breaks sell everything.
If your gambling the buy some puts with a September exp, wait a week or so to do this premiums are really high now.