As of right now, the S&P chart’s candlesticks are pushing up to a strong key level (around $3,970 – $3,980), that’s held several times over the last couple of years. If price pushes through that level, it could make a strong run up, and signal strength for the “economy” overall. But it could just as well stall there again and drop, continuing the downtrend it’s been on for the last couple of months.
Looking at chart patterns on the weekly chart, I’m leaning bearish. While an argument can be made that this has been pushing up since October of last year, the pullback over the last roughly 6 weeks is a bit too deep, in my opinion, to be a continuation of that. I think price will drop off of either the next key level, or maybe the next one (at ~$4,100). Dropping down to the daily chart, and there’s actually a key level right where price closed today. Originally, I thought there might be more upside before this dropped, but I’m not so sure.
Price could push through this level tomorrow and make another rally. Definitely. It also could be recovering and make a strong push up for the foreseeable future. The pattern, to my eye, though, suggests further weakness, so that’s my bias for this week. Of course, I’m not going to force anything, and if the market shows me something different, I’ll update my outlook.
For now, though, I’m going to look for shorts. I’ll come back and see how the futures are moving pre-market tomorrow, and a bit after the open, and potentially fade the opening move. Especially if there’s a gap-up. And, as I’ve been doing, look at the stocks on my screener and dive in — looking for a trade — as soon as I see a chart I like. Without forcing anything, but also, without A) forgetting why I pulled the chart our or B) missing the move that I see.
3/21/2023
Equities did make a gap up this morning, and as of right now (8:50) looks to be stalling at that resistance area around $4,000. I still like shorts for today, we’ll see what individual charts look like, and I’ll keep an eye on this to see if it pushes through that level.
AMZN – Short – This is the first chart that’s jumping out at me this morning. Looking at the 3 day chart, this has been pushing down since mid 2021, with a bit of a rally last August, but has largely been pushing down since then. Price looked like it may have made reversal moves earlier this year, making a huge spike at one point, but didn’t hold on to any of those gains. There’s been another small rally over the last roughly 3 weeks, but price reached a resistance area, and looks like it’s failing at that level.
Dropping down to the daily chart, price spiked last Thursday, dropped a bit over Friday and yesterday (reaching a support area that was prior resistance, and rallying a bit), and is up again today. This made a new swing high and a new swing low, so it appears to be making reversal moves to my eye; though at the same time, price is at a resistance area right now and doesn’t seem to want to break it. The market gapped up and I’m overall bearish, so it might not be the worst thing to maintain that outlook and look for a short position here — fade the opening move. I think I might, let me run the numbers and see. I’ll risk a smaller position size, too.
Update – 11:08am
This pushed up above my initial stop level, but I still like this to the downside. I moved my entry and stop 50¢ higher, to adjust for that move higher, and to get in, still, at the first break of support.
Update – 1:32pm
This has continued to push up, but isn’t breaking out, and I’m still overall bearish. I adjusted my entry/stop higher, again, to catch more of this move when/if it drops. Typically, I’d look to cancel this order with this type of movement (as I did with SQ already today), but at this point, it’s also looking like a double-top is forming. I’m still willing to take this if it drops, so my order’s still out there.
GOOGL – Short – This is very interesting. Looking at the 3D chart, price has been pushing down since early 2022, with some sideways movement from mid-April to mid-July. Then came a large drop through September that pushed through the lows of the prior sideways movement, and since October of last year has been moving sideways again — staying within a (fairly wide) range between $85 and $105. Today, price has reached the highs of the range, and given it’s current overall weakness, and the fact that I think the market will drop soon, I wouldn’t be surprised if this were to push down off of this key level. Dropping down to the 2H chart, I’m not seeing and discernable patterns to trade, so I’ll hold off for right now, but I’ll set an alert to let me know if it starts to drop.
SQ – Short – This dropped hard just before 2022, had a bit of a rally at the beginning, but pushed down hard again through the rest of the year. At the beginning of this year, there appeared to maybe be some strength, but since the beginning of February, this has made a new lower low, a lower high, another lower low, and, today, appears to be making yet another lower high. If this is another lower high, then this should drop right around the key level it’s currently hovering at. I’m going to take a stab here, too, given the numbers; with, also, a lesser position size.