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Possible trend change on SPY


Allsopp
(@mma)
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Earlier this week, Bearish divergence got printed on the weekly timeframe on the S and P 500 and now it looks like a double top may be forming on the daily timeframe to signal a trend change to a downtrend.

Usually when you get a trend change on something that has been in an uptrend for a long time, the move in the opposite direction occurs quite quickly.

I've circled the double top on the daily timeframe. The candle hasn't closed yet, but it'd need big bull volume today to prevent the first sign of a likely trend change.

As each day ticks by, more evidence starts to emerge for a pullback. I am, as a result being very cautious at the moment. So far this week we've had:

1. Bearish Divergence on weekly timeframe.

2. Big bear volume on market open everyday.

3. Meme stocks like GME and AMC pumping for absolutely no reason. It looks like a pump and dump trap.

4. Double top on daily SPY timeframe signalling likely trend change.

Let me know what you think.


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Allsopp
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JB826
(@jb826)
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Haha...you called it. Rugpull Thursday.  Watching out for margin calls tomorrow.


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Allsopp
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It's quite hard to express how bad certain things look in text and images in the chat room, so I made a video about the current way that the S and P 500 is looking. How you find this useful:


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kirby
(@insanekirby)
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@mma bruv i'm stupid, by double top you mean the high on Feb 17 and the lower high on Feb 24 right? If so the price now has fell below the support (the low between the double top) and the pattern is confirmed. Thanks and great analysis!

btw been following your stuff for a bit now and just joined the club, cheers!


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Allsopp
(@mma)
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Hey Kirby mate,

Thanks a lot for joining us.

The double top on the Daily SPY chart got printed yesterday, which could be the first sign of a trend change to a downtrend.

I've drawn a blue line indicating a new line in the sand on SPY at $3925. Unless price action closes a daily candle back above that, it's possible that SPY could be about to change trend to a downtrend. 

You are right in that the low has been confirmed, but it doesn't mean SPY can't find support on the 55 EMA and break back above $3925 to keep the uptrend going. In the chart below we've seen it likes to do this a lot. 

 


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Mysticmoose
(@mysticmoose)
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So what would be the smart thing to do in a situation like this, knowing that if things do go bad then they may happen quicker than we can react.

Should we:

1. Set stop losses on all of our stocks.

2. Sell out a proportion (say 50%) of all our positions.

3. Sell out of everything and wait on the sidelines.

4. Something else?


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Allsopp
(@mma)
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Posted by: @mysticmoose

So what would be the smart thing to do in a situation like this, knowing that if things do go bad then they may happen quicker than we can react.

Should we:

1. Set stop losses on all of our stocks.

2. Sell out a proportion (say 50%) of all our positions.

3. Sell out of everything and wait on the sidelines.

4. Something else?

Hey Moose,

I think that's a huge question and not really one that anyone can answer for you, you have to make the decision for yourself.

I'm personally short on the Nasdaq, SPY and the FTSE100 right now. If we break the resistance lines that have been established on these indexes, I'll close the shorts and start buying into stocks again.

Until we break those lines in the sand we spoke about, I'll stay short. Obviously not forever, I'll need to take profit at some point, but this stuff is exactly the same as betting on MMA. All we can do is make the best decision possible with the information we have available and right now I think the information we have available leans towards stock markets around the world having a bit of a dip and cooling off period.

Sorry I can't give you more specific advice. 


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timm
 timm
(@timm)
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Funny thing is for as much as the market looks like its about to crack the VIX isnt exactly spiking...yet perhaps. 


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kirby
(@insanekirby)
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The 55 EMA support has been broken today...but like Chris said (also see pic above) the previous two times that the price dipped below the support line, it bounced right back up each time. The same thing could happen again this time, or we could see a massive drop. I guess just be aware and be prepared... lol :'(


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Nordic
(@nordicflight)
White Belt
Joined: 6 years ago
Posts: 1
 

@mma

Not relevant to this thread, but...

 

I keep remembering Dana and Mazzagatti's love story when I see your cartoon image Chris

"Mazzagati should do his job, not hearts with his hands like a 12 year old girl"  🤣 🤣 🤣  

 

If only Steve did his job 10% as well as you do, many a fighter would have gotten less excessive punishment...

Happy I am not a ref though


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