#202429 - priceactiontds - weekly update - sp500 e-mini

Good Evening and I hope you are well.

sp500 e-mini futures

Quote from last week:

Don’t know what to tell you here. Market can obviously go much higher for longer and we can print a couple of higher highs. But I will never join the “this time it’s different” crowd. The only sure thing before bubbles popping is that markets print more and more ridiculous highs while more and more people say “it’s really different this time” and they always popped and always will. That’s the nature of the game. Am I saying you should short this right now? No. Do you want to buy this at 5621? If your answer is yes, I do hope you make money, enjoy my letter and take something from it.

comment: Was I wrong about the highs? Yup. SP500 made a higher high by 1 tick. Do I care? Nope. Still convinced this here is the top and I give the market room to prove me wrong again. Have your stop loss in place and live with it if it gets hit. Part of the game. For me the odds of this being the high for the next weeks to months is greater than markets continuing up.

current market cycle: Bull trap and the end of this trend is near. Will soon see a deeper pullback and we will form a trading range where the low is 5000.

key levels: 5500 - 5700

bull case: Bulls printed another higher high and want to stay above the big bull trend line from 2023-01 and inside the bull wedge which could lead to 5800. If bulls actually manage to do so, no reason they can not print 6000 then but that is as low probability as it gets.
Invalidation is below 5580.

bear case: On the weekly and monthly chart this will probably become a bar with a huge tail above, showing a clear rejection above 5600 and market will stay inside the bull wedge that has been going on for 16 months. Bears want to trap bulls who bought above 5600 and they need a strong daily close below 5550 next.
Invalidation is above 5708.

outlook last week:

short term: Most likely outcome for me is a bull trap above 5600 and we will see a correction over the next weeks. I wait for bear strength before shorting. I will only continue to buy quick momentum scalps if we continue upwards.

→ Last Sunday we traded 5621 and now we are at 5664. Bad outlook but still think it will become a bull trap over the next week.

short term: Bearish. Called the top and will stand by that call. If bulls do another higher high and close above 5708, so be it.

medium-long term: Bearish. We will see a bigger correction down to at least 5450 in the near term and likely also 5300. Still think 5000 will be hit in 2024.

current swing trade: Short 5700. Will also hold this until Tesla goes bankrupt or Cathy closes her trashcan of a “fund”.

Chart update: Nope.