Where is the next destination for the S&P500?

by birtanpublished on September 10, 2020

Hey traders David Frost my strategic forecast you're here for another episode of common sense market analysis today is Wednesday July 15 2020 we're looking at a daily chart of the s P Y or spider which is the proxy for the S&P 500 what do we have on the docket today market

Was up was up pretty big bulls have the ball what's gonna happen next we're gonna look at all the charts we're gonna talk about a possible breakout we have a double top scenario we have higher numbers or are we gonna have a possible

Failure its options expiration week we have to be prepared or pre prepared for anything expect the unexpected we still do have a divergence or two out here they always have to be of note and they always have to be on the table we'll

Take a look at everything under the Sun but first let's start with the daily chart what jumps off the page at us how about the trend is your friend until it's not I would be remiss if I didn't say that in an uptrend or a downtrend

Every single day because I know there are a lot of traders that are dying to short the market they continue to try and short the market they always want to short the market I get that if any of those people are out there listening now

You just have to ask yourself is it worth it over and over and over again to fight meaning have a fight with the trend now there's a flipside to that you want to catch a high you want the big sleigh ride down on a short trade they

Take the meaning the market takes the express elevator down and the escalator or the stairwell up so we know the allure of the short trade we also can't lose sight of something else and I want to bring back the weekly chart with this

Discussion but first let's have a further discussion on the daily chart we're in an uptrend they're approaching this double top if above that double top you'll see a breakout ensue where would the breakout take price well you have a

Couple of things going on we've already discussed all this but here's a recap so you have some areas up here and the exact numbers will be reserved for inside the numbers members where exactly the actual

Resistance is but above that you get into no-man's land and then you have another gap all the way up at three thirty three and a half we're not going up to three thirty three and a half anytime soon

We may not even get into no-man's land but we have to assess the situation we have to see all the deals all the possibilities and then we Whittle one after the other after the other away at a time so right now

The markets in an uptrend of late other than a one-day thing here and there there has been no rejection of price up here so that's what I really wanted to discuss again I think it's worth emphasizing we did this last night we're

Gonna do it again the weekly chart we have two important breakdown candles this one has a high of three twenty three forty one inside the numbers members will be familiar with that number I'm not always telling you where

The numbers come from it doesn't really matter all the time but the number should be familiar the other one break down candle high is three and a quarter eighty five so here's the way we have to look at the market we have to look at it

Common sense logic we've got to use those two things to make our determination or any assessment that we're willing to make so here's what we're gonna look at let's start with this breakdown candle hi not the most

Recent but the one far away so that's when the market crashed the market really broke down this is a bonafide break down candle high if there was ever a market breakdown that was it so on the way back up the market really did run up

Two tests to break down candle high now sold off so that's a rejection that's enough of price decline to call it a rejection from the break down candle high rejection doesn't have to mean new lows doesn't have to mean crash it's

Just a garden-variety affection away from that general price area 20 or so spwhy points 200 SP handles qualifies as a rejection but now the market found stability and we're back up testing the breakdown candle

High in the midst let me clean this up a little bit we'll do it again in the midst when they ran back up and then we're rejected they created another breakdown candle high so either we're running back up to test this breakdown

Candle high or this one again or get through them both either way that's what's going on the question is which one and how do we know from a logical and common sense perspective here's what we do know the market wouldn't be back

Up here if it wasn't important if they weren't trying to get through this price will the real break down candle hi please step forward is the near-term one the real break down candle hi is that what's operating right now is that what

The market is going to test or are they running a better test of the actual breakdown candle high up almost at 3:26 remember let's use logic once again when they came up they never got to the breakdown candle high doesn't mean they

Have to there's no hard and fast rule that says the market has to go here in order to be a complete and full test that's not the case but remember something we discussed several times on this weekly chart is this a run higher

And then eating time off the clock in a bullish flag –is– kind of formation and that's really essentially what was or is going on here on the weekly chart you see how there are a lot of possibilities depending on what

Perspective you want to look at things and how much of an umpire you want to be check your bias at the door pretty simple stuff here's what we'll say getting above and this is a weekly closed so we have to say it based on a

Weekly close but we know closing hourly and then daily above this breakdown candle high three 2341 will at least signify a likely test of three and a quarter to three twenty six that's just the way the market works

Remember daily chart there above all the moving averages there in an uptrend they're at a double top and they hadn't run up there to be rejected it's not like they got rejected came right back to double top and they'll be rejected

Again in fact what they've done is they've creeped up to double top we don't love creeping markets creeping markets are not crisp when the market is running to a destination it's generally doing it quick think in terms of stocks

On the move what happens a stock will move quickly into a price it'll spin around in the other direction real fast before you know it you're up eight bucks like this morning we'll get to that later but when a market creeps into a

Spot you have to question whether or not that's actually the spot it's more likely the market gets into a certain price in the midst of some kind of a frenzy for example let's say they went to 325 326 tomorrow Friday Monday

Something like that they would likely get there in the midst of everybody thinking that price is going to continue going indefinitely the Bulls would be rampant now the number is represented from a big timeframe a weekly chart so

It could take some time but would they likely just waltz right on through 326 or would they likely have a reaction in the other direction and the answer you're correct they would likely have a reaction in the other direction on the

First run if gotten there quickly as opposed to what we're seeing here on the daily chart were creeping up to a double top that's not the same you need to understand the difference it's not only what the market does what price the

Market does it at it's also how it does it let's go with a short hop for a second take a look at the pre-market commentary from inside the numbers we'll look at stocks

On the move there were only two on the board the market was getting a lift a gap higher a rising tide lifts all boats early in the morning when that happens it takes away a lot of the immediate opportunity for traders looking for that

Juicy morning trade you know the quick rocket ride read the pre-market commentary I'm gonna scroll up there's your three 23:41 early and often we're giving both sides to the coin we have three 20s important we have three

Nineteen you'll see later on as important than in quite get there but they made an effort for it three twenty you'll notice is a big fat round number it coincides with es 3203 22 was important that was represented in the

Early thoughts we'll use this as a teachable or lesson learned type of moment 322 we label it as the most recent breakout and that was based on the futures in the morning now we talked about breakout and break down areas a

Lot so what I want you to do is keep that in mind we're gonna go look at a chart you know the routine it doesn't change 3:22 was essentially the pivot you want to identify important numbers so we know

That area is important in terms of a breakout area so when we see the market trade in and around an area it also draws more attention at least to me so we can see they gave up three twenty two at a pretty good sell-off made a an

Effort for the gap didn't fill the gap we know how that works in fact you'll notice when you read inside the numbers we talked about it before and after it happens each and every time which is sometimes they come up short of a gap

Sometimes they hit it on the button sometimes they'll spike it through we never know exactly which one is gonna be which time but we need to have the awareness that they do that so here they come towards the gap and we were ready

For it how are we ready for it we know that below a certain thing they're gonna do another thing but what did they do they ran right back up to what 322 same area the breakout area from early this morning it's still important the more

The market respects zone and area a number whatever you want to call it the more we can recognize its importance when you see this and at the time you don't know 322 is the number but now you look back and you say alright so they

Centered I'm 322 tried to breakout broke down came back to where 322 and then what happened at the end of the day little bit of shenanigans in and around 322 you think 322 is important yeah you don't have to be a mathematician to see

322 is important let's continue on with the notes you should read the commentary go back to the charts and see where the support was listed as C where the resistance was listed as several times during the day today we had the support

In the resistance numbers not necessarily to the penny each and every time but we had them for the most part lock stock and barrel and you'll also notice that today and we can call it a weird Wacky Wednesday where does that

Come from it's the wednesday of options expiration week and years ago I heard somebody coined the phrase weird Wally Wednesday or weird Wacky Wednesday something like that and you know what it holds true the

Market was doing the whips off thing and I've also heard the term whipsaw Wednesday they're all true the market was up the market was down the market was all around and what happens when there are days like that they chop

Traders up traders looking to short the market get scared away they get squeezed out traders looking to buy the market thinking it's gonna go higher they get shaken out who wins the computers trading back and forth moving right

Along again what I want you to do is take note of the numbers see the numbers read the notes go back to the chart I'm not gonna spoon feed it to you the way I figure it is if in fact you have any interest whatsoever in finding out

Whether this is valuable information then you'll take the time to go see what was written and go back to the chart and see what happened after the fact it's pretty good stuff remember 3:19 just sayin moving along

We're gonna take a look at stocks on the move also we'll look at the two opportunities that were on the board and then we'll look at the chart of the one that hit its number the two on the board were UNH and BK UNH hit its number early

And quickly entry 375 and here it is UnitedHealth over here on the right you see the close yesterday was 308 60 getting a haircut at the open and this was a late addition on the board why does that happen let me explain it I

Have a scanner that runs every 10 minutes starting it I think it's 7:30 a.m. sometimes something begins moving first as we approach the opening bell that happens I happen to notice it I figured

I would put it on the board I put it in the commentary if you read the commentary in the pre market or the early thoughts you saw that it was on the board a late edition UNH the rest is history you can see what happened the

Opening print happens to be 301 12 against a 375 they come into the number they spiked it by a little bit they come down very close to 300 and what do we call that yes a big fat round number they turn around they go back in the

Other direction on what you got it a rocket ride and then they came down later in the day and there's a method to the madness I did that with the chart on purpose because I want to speak to a handful of people that ask a very

Specific question and they always not these people but there are always the same question asked on these trades when a stock begins to come back toward a number like in this case 375 they want to know if they can trade it again or

Trade it for the first time because they missed the trade on the first go-around and the answer is it's a one trick pony a one-shot wonder one and done no sloppy seconds it may work the second time but it's designed as a one-hit wonder first

Hit your best hit the probabilities of the same thing happening twice in a row at the same number are not the same as the first time now this one would have worked as you see but it's not the trade the trade is one and done on the first

Hit it's a valid question but there's the answer spwhy hourly chart let's have this discussion it's important so here we have a flagpole and then we have the makings of another flag developing and this is over and over and

Over again it sounds like a broken record but that's because the market keeps doing the same thing over and over again sound familiar that's why we pay attention so what would we say with this

Well if they come down and fill the gap that's down here around 319 a little below if they come down to fill the gap and they're closing hourly below the gap that takes the bull flag –is– thing off the table if they come down to fill

The gap kind of like on this candle here ending at 12:30 p.m. today it's just a quick run down and they run back up that's running a test if they come down quickly and get right back out of there in the northern direction that doesn't

Really take away the bullish flag –is– thing it's just a test so two scenarios when you show up on Thursday morning mind you in uniform ready to go if they're trading lower below the gap is bad above the gap

They're likely coming down to fill the gap and then we want to see what happens around the gap how do they treat the gap do they begin closing shorter term candles below the gap that would be a signal they're gonna do the hourly

Closed below the gap or did they get out of there quickly that's a bullish sign about another lesson learned and if you already know this lesson then it's a reinforcer 120 minute chart what do we have here the

Look here is a big breakdown candle fine the market gaps up to get above the breakdown candles same conversation off the other charts it's just a different chart different breakdown candle same concept and this

Is important I'm taking a side note for a second it's important because this is really what the foundation of the course really is it represents the fact that all charts act and react the same way you want to trade commodities gold oil

Pork bellies I don't care you want to trade Forex I don't care you want to trade cryptocurrency I don't care all charts act and react the same way doesn't make any difference what the name is I prove that point in the course

Without a shadow of a doubt so here's the situation they gap up to try and get through the breakdown candle high so they don't do it but they're not rejected what do they do

They're making a bullish flag –is– thing trying to build energy to do what exactly get through the breakdown candle hi here's a fact some of you I don't know how many but

Some of you have just had an aha moment take the course you'll have a whole bucket full of aha moments I'll leave you with this one time is more important than price if you don't know what that means you'll have the aha moment in the

Course what else we got we got camp IWM up 4% that in and of itself is an adult number you don't find it very often that an index is up four percent on the day by the way there's a symmetrical move on the board can you see it if you took the

Course you can see it but what are they doing where are they headed at present a buck fifty let's point something out we've discussed this kind of stuff on other charts even on this chart here's the high of a pivot that was important

How do we know it's important because the market went there and was rejected runs up rejected that makes this an important pivot it's not me saying it the market said it here another one important pivot market runs up

Rejected again now the market gaps up and guess what it closed above them both that's bullish in and of itself take it at face value if you wake up to a Black Swan and they pull the rug out open the trapdoor the whole nine yards that's

Fine that was something other than face value this is a duck the duck is telling you 150 it doesn't have to happen tomorrow but the duck is saying 150 by the way or more could be up to double top 155 156

By the way why not and the reason I say why not is because if in fact down here I said or anybody said hey look the Russell's gonna be over 130 in a couple of weeks you would have said no chance guess what that's exactly what happened

Was a little bit more than a couple of weeks but you get the point expect the unexpected nothing is impossible with the market if you haven't figured that out by now stick around it'll become clear what is

A failure look like closing back beneath these pivots before reaching 150 or higher that would be the makings of a failure closing daily this is a daily chart you can get below close our leap below but the daily close it's what's

Important however that doesn't mean the markets gonna fall apart because here's the deal they could still have another situation where they've created another bull flag pattern and it just needs to eat some time off the

Clock build some energy to run higher make that secondary move higher so that is a possibility in the midst of doing all that they can come down and fill the gap real quick and they can certainly come down below this high here intraday

This high here intraday they can close below it daily I don't want you to misunderstand closing above it is normally a tell it's like a tip-off it's a tip-off that they're likely gonna run higher start closing back below 1 2

3 4 days in a row then something else is developing nothing's hard and faster to find this stuff in any books you're not gonna find it on their Chartered Financial Analysts exam this is my stuff what about the folks down at the

Transportation Department same routine nice big break out today from where we were up almost three percent guess what we've been talking about this this gap the two hundred period moving average they closed above um both what they

Didn't close above was this last breakdown candle high but they spiked it closed below doesn't mean it's gonna collapse they just weren't ready yet to go higher nothing wrong with that they should go

Higher but if we wake up to a big gap down and the markets melting down what's the first order of business the gap left open from yesterday's close pretty simple stuff not everything is roses what's going on out in Silicon Valley so

We have a divergence I talked about that early on this is a divergence in terms of the Q's not being as strong as all that other stuff so what are we seeing we're seeing some sector rotation some money coming out of the Q's what does

That mean where is the money coming out of well we know the Q's are top-heavy in just a handful of stocks Apple Google Amazon Netflix you know the routine Facebook we don't know exactly what's happening under the covers all we have

Are the pictures in front of us and the numbers in front of us so here's what we'll do we'll say as long as this reversal candle is intact the market is poised to have more downside before it goes higher above the other days high

That's normal garden-variety stuff close daily above 262 and they're likely on their way to new highs remember the trend is up this is a one-day candle if you just took the candle away and you just had the prices you wouldn't see a

Reversal candle it wouldn't be red you wouldn't see anything other than an uptrend so you have to take it with a grain of salt could be one day wonder it's an awareness you have to look at both sides

Of the tape you have to be the umpire calling balls and strikes we know what happens the majority of the time with these reversal candles so they are an awareness and on the hourly chart we still do have a

Pretty good wedge ish thing going on here of a bearish persuasion be the umpire take each market independent of one another analyze it throw all the puzzle pieces on the table and then you come out with whatever you come out with

This hourly chart on the queues is not a bastion of strength contained by the convergence of the 50 and the 20-period moving average and then guess what I'll go right to Smash Mouth at a turn tonight because Smash Mouth was actually

Down one third of 1% the semiconductor space is generally speaking a pretty good indicator or proxy for the tech space as a whole so we watch Smash Mouth and it was struggling down one third of 1% it wasn't to the magnitude it was

Down it's just the fact that it was down of no puzzle piece on the table the financials here we go up 2 percent remember all those moving averages they were melting down melting down and what we said at the time was they've got to

Get back above the moving averages for any kind of bull case whatsoever they got back above the moving averages and here we are and we know the routine without the financials it's unlikely the markets going to get very far in either

Direction so what we had today which was interesting and it was noted early if you read the notes you saw this the IWM was strong the transports were strong the financials were up and they were strong strong enough to say nothing is

Diverging to the point or melting down to the point where we have to be Buber cautious in the market we use as many tools as possible we put them all on the table and that's just the way we do it around these parts have I told you how

Much I appreciate each and every one of you without you these videos are not possible true and accurate information I'm gonna the ripcord here tonight folks but it's everything that I wanted to and intended

To discuss so hopefully it was good and valuable information I'm David Frost my strategic forecast thanks for tuning in for another episode of common sense market analysis

Related Videos

from daily forex this is chris taking a look at the uh bitcoin market here you can see that we have uh found the market to be bullish we have broken above the ...
from daily forax this is chris taking a look at the um us stock indices this is the s p 500 and you can see that the s p 500 has uh rallied quite a bit did pul...
Hi this is vlad from effects empire euro dollar failed to settle above the resistance at 1.1870 and is trying to get below the support at 1.1830 if this attempt...
from daily forex this is chris taking a look at the uh crude oil marking cwti has gapped a little bit lower and then basically did nothing so uh at this point ...
from fx empire this is chris taking a look at the euro dollar and you can see that we are reaching above 118 as new york gets on board and perhaps trying to ma...
from daily forex this is chris taking a look at the euro and the pound you can see the euro has fallen a bit during the trading session here on friday as there...
Hi this is vlad from effects empire silver is currently trying to settle above the nearest resistance level at 23.30 if this attempt is successful silver will g...
from daily forex this is chris taking a look at the gold and silver markets you can see gold has smashed into this little short-term downtrend line that i have...
from fx empire this is chris taking a look at the british pound japanese gen pair you can see we shot straight up in the air and uh slammed into 136 but at thi...
from daily forex this is chris taking a look at the west texas intermediate crude oil market and as you can see we have a little bit of stability here it looks...
from daily 4x this is chris i'm taking a look at the indices and the e-mini contracts in america this is the s p 500 you can see that we have fallen a bit ...
from daily forex this is chris taking a look at the us dollar japanese yen and the aussie dollar the dollar yen as you can see continues to kind of chop around...
from fx empire this is chris taking a look at the dollar yen weekly chart you can see that we are dancing around 105 at this point if we rally 106 is an area i...
from daily forex this is chris taking a look at the wti crude oil market you can see that we have rallied a bit during the trading session here on wednesday yo...
from fx empire this is chris taking a look at the euro dollar weekly chart you can see that we have a slice through 117 on the weekly time frame now it looks l...
from daily forex this is chris taking a look at the um euro and the pound and you can see that the euro did rally a bit during the training session a lot of th...
good morning this is bob mason from fx empire and welcome to the daily crypto tech review we'll be looking at bitcoin ethereum litecoin and ripples xrp the ...
from daily forex this is chris taking a look at the s p 500 you can see we've rallied quite nicely during the trading session um but uh really at this poin...
from daily 4x this is chris taking a look at the dollar yen and the aussie dollar pairs you can see the dollar yen has broken down a bit during the uh trading ...
from fx empire this is chris taking a look at the s p 500 you can see that we are reaching towards 3200 an area that has previously been resistance and now is ...