We are breaking the long-term ascending wedge:
- We're at resistance that's been in place since May 2019
- We're barely holding support since COVID low (this is 4th touch)
-> I expect we will continue to break down out of this ascending wedge. It may be tomorrow, it may be sometime in March, but it'll happen
-> Frankly, we need some consolidation with all (pick your favorite) indicator(s) signaling overbought conditions lately
New Pattern:
- The lows since June 2020 (roughly when we began understanding COVID and when the market became 'stable' in the new normal) create a new line of support (4x touches so far)
- This will be the new support line to watch and indicates we could go as low as ~355 (7% drop from today's 382 close) on SPY if we have a continued sharp drop (aren't all drops sharp?!)
- If we hold this pattern, we'll end the year with SPY between 415 and 445 (8% to 16% upside from where it is today)
Macroeconomics & Fundamentals:
- The FED will continue to support the markets
- Big names are ready to come back and will do so with higher margins
- The 'laggards' during the last 12 month's tech boom are finding their time (financials, oil, airlines/hotels, and even commodities)
- Inflation and rates increases are actually a good thing
- There is still a ton of cash on the sidelines waiting to be put to work: Wall Street wants to continue the ride, and Retail traders are clearly conditioned to buying the dip (looking at you GME)
- We're at resistance that's been in place since May 2019
- We're barely holding support since COVID low (this is 4th touch)
-> I expect we will continue to break down out of this ascending wedge. It may be tomorrow, it may be sometime in March, but it'll happen
-> Frankly, we need some consolidation with all (pick your favorite) indicator(s) signaling overbought conditions lately
New Pattern:
- The lows since June 2020 (roughly when we began understanding COVID and when the market became 'stable' in the new normal) create a new line of support (4x touches so far)
- This will be the new support line to watch and indicates we could go as low as ~355 (7% drop from today's 382 close) on SPY if we have a continued sharp drop (aren't all drops sharp?!)
- If we hold this pattern, we'll end the year with SPY between 415 and 445 (8% to 16% upside from where it is today)
Macroeconomics & Fundamentals:
- The FED will continue to support the markets
- Big names are ready to come back and will do so with higher margins
- The 'laggards' during the last 12 month's tech boom are finding their time (financials, oil, airlines/hotels, and even commodities)
- Inflation and rates increases are actually a good thing
- There is still a ton of cash on the sidelines waiting to be put to work: Wall Street wants to continue the ride, and Retail traders are clearly conditioned to buying the dip (looking at you GME)
