3 strikes against the S&P 500

The sharp rally in the equity markets this past week pushes the S&P 500 back into a zone that should present problems. I've included below, three important factors you should be considering in this market:

Strike one is that we've already reached a 50% Fibonacci retracement from the high seen at 1116.59 and the low of 1022.40. This area indicates increasing resistance on the upside for the S&P 500

The second strike against the S&P 500 is the downward trend line from the mid-April high that intersects the market around the 1080 level. This technical force should also act as a resistance level.

The third strike is our monthly "Trade Triangle" which remains in a negative position. The monthly "Trade Triangle" is also confirmed by the weekly "Trade Triangle" which remains in a negative position. The -75 score indicates that the downtrend, while not as strong as before, remains intact.

Based on these three strikes, we expect the market to move first into a trading range and then to resume its downward path.

All the best,
Adam Hewison
President of INO.com
Co-founder of MarketClub

21 thoughts on “3 strikes against the S&P 500

    1. can,

      Thanks for your feedback.

      We will do our very best to help you here at MarketClub. I recommend that you watch our videos and some of our courses that we have online are free to members.

      Welcome aboard,

  1. Yes, I went short on the 5th. Just do the opposite of whatever I do and you'll make millionsw!

  2. It is very easy to jump in on a reversal and be negative to an opinion. BUT...
    I guess everyone would like to know where the market is going. I personally tend to look for bulish sentiment but I have to say this market has me very nervous. I am in gold, cash and a smaller %age broad market ETFs with stops set.
    I think today's action in AAPL tells you very well where the market psychology is. Consumer Reports (hardly an IT guru, and not unbiased IMHO) has a negative report and the stock takes a significant hit.
    In the absence of bad news the bulls will carry the day in a turbulent market that I find hard to trade or invest (and protect positions). I suspect that any significant negative news will carry the day.
    Personally, I think cash, gold and yes, dammit, oil might be the places to be right now with cash holdoing 60-70% of the portfolio.

  3. Hi Adam,

    The S&P is above 1,080 so does that mean it has broken the resistence as per fibo 61.8 and the falling trend line?
    Pl. could u update and enlighten us so we can have a clear picture reg so we can decide our next moves.

    It is showing a -55% reading.Does that mean it is at crossroads and can go up much more now?

    Best Rgds.,

    1. Kishore,

      In today's video we see that our trade triangles both weekly and monthly are still negative despite the sharp rally in the S&P 500. Let's see how the next few days play out in this market .

      All the best,

  4. Hey TD,

    Very good description of Adam's analysis and reply to Charles.

    It's important to understand what the market can do. Some might go so far as to suggest what the market should do. But nobody can tell you what the market will do.

    Except, perhaps, that the market will do whatever makes the majority of traders uncomfortable.

  5. One of the wonderful things about blogs is we get to share...how many of us have been on a LADDER tha has 10 rungs...top to bottom???...the reason is simple, we have tons of indicators and oscillators that range from 0 to 100...or, if we insert a decimal point...0.0 to 1.00...or a 0 to 10 scale...

    Better still, ask ONE question...where would I like to put my money in...at the bottom of the ladder if going long, or at the top of the ladder if going short?...once in, the market 'runs' up or dn" the ladder...look at stochastics runs from 0.00 to 100...or 0.0 to 1.0...ten rungs...so when it is at the lower level or higher level, we have a sense of what to do with the info...

    ADD it...to something like the number of stocks under thier 13 week moving average or if you want, its daily variation of 65 day moving average...plot and graph it and you get a good sense of the depth of oversold..

  6. I agree with your assessment and believe a decline is at hand. Although with 61.8% nearing and a declining trend line it seems as though stops should be in place on any short positions. There isn't much time or % left for a trading range to play out to the upside before triggering mine!

  7. That long bull candle on 7/7 took out my SDS,
    so I'm waiting for a Reversal Candle at the top of this bounce to decide
    about what position to take next. . .
    I'm being cautious during the next few weeks because of earnings reports,
    which may give the Bulls another chance at pushing the Market higher
    -- or a least give it side-ways action which is difficult to swing trade (for me anyway).
    When the SPX closed below 1040 on 30-June, I thought the Market would break lower,
    but alas, Mr. Market threw a curve UP. But I did make some profit on my SDS from my 22-June entry.
    We shall see what we shall see 😉

  8. Charles, to compare Adam to Cramer only proves that you have no idea what this website is about. The method here is about using "objective" price points to determine major and minor trends of markets,sectors,and stocks. It has nothing to do with Adam's opinion. He is expressing how markets work the majority of the time. For example, normally, after a market makes a protracted down move, it retraces some portion of that move. All Adam is doing is using Fib retracement levels to show you where prices MAY reverse and continue its trend. Did he say this happens every single time...NO! Did he say to short at these levels....NO!
    I don't know how you say he is bearish when he is telling you prices have a good chance of going UP to certain Fib levels, like oil has a chance to go to $82 level.(the 61.8% Fib zone)The SP500 is doing the same thing! I think you need to take the trial offer and attend their online seminars so you will know what you are talking about! BTW, it seems like like you are being more like Cramer than Adam is, it is you that is calling the bottom to this market.

  9. I think for the Sp500 We could see a 61.80% retracement from 21 Jun high, to 6 july low, which points around 1085, before we continue the downtrend.
    Will see what happens soon.

  10. Dear Adam,
    Thanks again for another great analysis. I also wanted to add, as I`ve been watching, the volume the last few days has gotten right down to starvation levels(less than anemic). Thanks for all you give. It is really apreciated.

  11. Adam,
    Your research and the COT data often coincide and are helpful.
    Thanks, So Much,

  12. Way too many opinions, second only to Jim Cramer.

    One of your strikes is actually a foul ball. You are bearish on the bottom as is the near record pessimism in the various surveys (AAII, Investors Intelligence, Rydex Ratio plus the classic major interview by the NY Times with Bob Prechter. It's not a coincidence that the Dow rallied 500 points this week.

  13. Near record bearish sentiment will soon stampede the deflationary bears into covering.

  14. Good analysis. I'm shorting market heavily. I think now it's not going to do much, but closer to August jobs report, it will move lower and will sell off if report is terrible.

  15. I love your short videos as well as your comments, Thanks you for sharing your years of experience.

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