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Trading Alert: S&P 500

by Antonis Benis, on Jan 10, 2020 5:40:39 PM

This is a follow up of my previous reports on December 27th and January 8th.

In the last couple of weeks stock markets have just ignored military tensions in the Mideast, excessive bullish sentiment, slowing economy and the Repo crisis and pending impeachment before that, thus moving higher until now; it is better for a market top to not be news related. However, I still believe that we are on the verge of a price reversal right now, that will catch most of the market participants by surprise; looks a lot like the January 2018 top.

Advance/Decline Line

The Advance/Decline line made a new all time high yesterday, no divergence there (see chart 1)

NYSE Advance Decline Line Trading Signals

Courtesy of sentimentrader.com
 

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Smart/Dump Money

Smart/Dump money confidence spread at levels typically seen at important market tops (see chart 2)

 

Smart Money Dumb Money Confidence Spread Trading Signals

Courtesy of sentimentrader.com


Equity Put/Call

Equity Put/Call ratio also at levels that mark market tops (see chart 3)

Equity put/call ratio trading signals chart

Courtesy of sentimentrader.com


Cycles

There is bearish divergence in the daily RSI(14) and the VIX index which are not making higher highs/lower lows respectively to confirm the higher stock markets price highs.

Rare confluence of multiple daily TD sequential 9 and Compo 13 sell setups, that should get recorded today (with a higher close); TD weekly sequential 9 sell setup @ 9+3.

Cycles have topped around the turn of the year, suggest a decline into early February, a bounce into March and renewed weakness into April. Please note that cycles are only about time, not about the magnitude of the moves (see 4)

Cycles trading signals March to April 2020


Gann Analysis

Gann analysis: I posted the charts for the S&P 500 again two days ago, noting that I was expecting slightly higher highs. That was because the long standing resistance was at 3271/3283 (March future) accompanied by very reliable and exact Gann angles in both the normal and even more so in the “converted into euros” one. Resistance has been met, if you go short put your stop loss just above today’s high (see updated charts 5,6). I created a chart for the Nasdaq 100, also converted into euros.

S&P 500 Trading Signals

S&P 500 Trading Signals Gann Angles

Looks like it has found very important resistance (a double from the 2009 major low), this is textbook Gann! (see chart 7)

Nasdaq 100 Index Trading Signals Chart


Conclusion

Bottom line: there is overwhelming technical evidence that a market top is nearby (if not already in the market). The line in the sand is the low of January 8th (SPX), a close below would confirm the bearish price flip. Investors are advised to take some (if not all) money off the table; traders should look for and take sell signals. I fully understand that my advice is massively against the trend, however all the technical tools that I use show the same thing: an important top right here, right now.


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Topic:Trading SignalsOnline Trading PlatformAsset AllocationActive TradingInvestment StrategyS&P 500NASDAQ
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