This month is the best month I’ve ever had. I’m not trying to brag. I’m just human and when trades don’t work out, it is in my nature to dwell on the losses. As such, I need to also celebrate the wins if for nothing else than to maintain my mental health. I’m going on vacation next week that I feel I’ve earned. I’ll probably still comment here and there, but won’t be doing much else than laying on a beach. So, hooray! Ok. Now that that is out of my system, it’s time to step back, do a post-mortem on my trades and plan the next ones.
This daily chart is feeling very bearish. This tested the 50 Day MA June 11th and tried to squeeze the shorts. This successfully held the June March open (almost to the tick) at 7580 and we’ve been rejecting (in a very grinding way) ever since. This had tested and tried again to hold the 50 Day MA except this time it is very choppily breaking down through. Today’s close should clinch this break but I expect the dip-buyers will continue to give a few pops here and there. Further to this, there is this diamond pattern which had been noted earlier making for a very clear top. We broke the initial diamond supportive line so I redrew it to account for the next lower level.
This is not really a good habit for some as it some people simply delude themselves into believing that the chart may still be bullish/bearish to align with their bias. As such I don’t usually do this, but in this case I am not simply trying to “fool” myself into believing this is still bullish. I simply want to ensure my bearish technical patterns are still in formation. I.e., I’m not buying, but I’m watching for where the next critical break might be. To the downside, the next critical levels which may get tested are the 7200 (which may set off a temporary bounce) which I believe will fail eventually and we end up testing 7k.
I wanted to zoom in to show the action that we’ve been facing. There has been so much chop that I don’t think it would have been easy to actually play a single side of this unless you were already in position last week. These chop zones are slowly getting lower. This feels a lot like the buyers are attempting to squeeze each time but meeting tremendous selling resistance and as these buying attempts get lower and lower, I’d expect them to start giving up and we see a sort of waterfall effect as this picks up downside momentum. 7400 is clearly becoming an important line in the sand. I was hoping today might see 7350 hold but that did not happen (though we closed beneath it so far). So I think there is still hope to continue downward pressure Monday.
We’ve seen the large zoomed out charts. 59k is the 50 Month MA so chop is to be expected as we saw today. There is some potential to begin next week on a small break upward attempt but I think that would be short-lived and would look at 62k to hold as resistance. I’m targeting 50k on the next leg down.
This gorgeous chart has really slid hard once it lost that $120 support. It tried to catch itself at $114 but could not do it and here we are at $82. Being a contrarian at heart, I’ve been glad to ride this down during the past few months. Now we are seeing headline news about it and the company and Bitcoin, etc. etc., and I don’t like to be on that side of a trade once it hits peak news. That being said, this is definitely a shit company and shit chart and looks destined for much lower. So what now? Well, I’ve covered my position to give myself a breather and book my profits. Today reached a critical point where it might (“might”) try and catch itself. It feels like catching a falling knife so I don’t want to call a bottom especially after the past two weeks.
But I think a very short-term bottom is possible. After such a direct slide and hitting this area ($80 was a gap left from the breakout on daily chart in February 2024) and putting in this very interesting pattern, I think we could see a green Monday as a snap-back. I’m not willing to buy it myself here of course, but I am certainly welcoming any strength to get this towards very very shortable levels near $100. The key with this candlestick pattern will basically be the open on Monday. If this opens beneath the body of the candlestick (AND holds that as resistance), then it’s not a bottom and I’ll probably short again right there with very close stops. If this gaps up and holds as support, then it may be attempting to actually bottom a bit and we’ll see that rally towards $100. I would love this scenario.
So in a nutshell, I am very lightly positioned as my positions had reached areas where reversals are possible, but it doesn’t mean I am ready to flip. If anything, I think the bear is back in SPX and the wind will be at my back again when trading my shorts. Sell all rips. Good luck next week all.
