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S&P 500 to print final move to 6500

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It goes without saying, this bull market has been the most hated I’ve ever known. Retail traders attempts to go “short” on every leg up resulted in quick squeezes. Every 1% to 4% correction brought renewed calls for the end of all things. Including time I believe. There is a reason why 90% of market participants fail in trading. Emotions.

The last four long ideas published by Without Worries are linked below. Read the comments in each to get an impression of the distain retail traders have for this bull market. The Cup and Handle idea for example, published on November 9th 2023. Many reading the idea were understandably skeptic. I tell you that to tell you this... The idea was much more than a chart pattern. The idea included studies from Dollar index and more importantly market sentiment.

So lets focus on those two in a little more detail.

** Market sentiment **
The market sentiment in November last was incredibly bearish. The Put/Call ratio was sky rocketing, in other words retail traders were all “short” on the market. That was a mistake. Guess what? They're doing it again.

Weekly Put/Call ratio

If you follow my practices you’ll know one of our golden rules, we never never long into active resistance. Just don’t. Don’t even think about it.

On the above weekly Put/Call chart we can see retail traders are betting heavily with both feet for a market correction as the Put/Call ratio shows a strong demand for “Short” contracts. We can see RSI is actively rallying into resistance. Oh dear…

** The dollar index **
The dollar has entered a bull market. Or so it appears. On the 2-day chart below price action has printed a Life Cross with the index trading above the 2-day/200 sma.

However on closer inspection just as in late 2022 and indeed late 2023, both price action and RSI support have failed. This will be a short lived bull market, for now.

Support and resistance is the ultimate cheat code. It has been integral to the previous ideas shared. It amazes how many continue to dismiss the importance of practicing this simple concept. Look left.

2-day DXY

** The conclusion **
On the above monthly chart several technical developments have occurred. Together with market sentiment and dollar index structure, the combination provides a powerful message.

The red arrows highlight each significant market top over the last 10 years when sentiment was incredibly bullish. The blue arrows record sentiment at extreme bearish levels.

Here’s the interesting part, when sentiment was this bearish price action was already at the lower half of the rising channel. There is not an instance when a rise from lower to higher half of the channel with confirmation of support (we’ve confirmed) did not result in a resistance test at the top of the channel.

The resistance is now between 6500 and 6700.

Is it possible the market collapses like many retail traders are now calling for? Sure.

Is it probable? No.

Ww

** previous S&P 500 ideas **

S&P 500 - Cup and Handle

S&P 500 - Why everyone is wrong

S&P 500 - Why everyone is probably wrong.

S&P 500 - Why everyone is wrong - Part II

Why everyone is probably wrong - Part II

S&P 500 to 6000

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It begins. Past resistance confirms support.

Got many emotional messages from short sellers littering the inbox.
What were you thinking? Going "short" into momentum ??

** 20% melt-up in progress **

The index has crept up another 3.5% since publication.
Bears are furious. The tradingview.com platform, general social media, everyone is pushing “short” ideas.

Recent ideas on S&P 500, the majority are short:

This is a bad idea. Why?

Very simple, momentum.
Never ever bet against the rising tide.
And of course, look left.

We never know the “When” for a market top or bottom print. We only know the probability of it happening. Right now the probability for continued upside remains very high.

A) As with the original idea, focus on the green arrows here. Look what the market structure is telling you. Past resistance confirms support. Now hold that knowledge in your head for a moment.

B) Still holding it? Earlier I mentioned momentum. This is what the blue arrows are now indicating. Stochastic RSI has just crossed above 80. (Both lines, is important).

When A and B occur together the market melts up over 20%

When does it happen? No idea.

When it does happen, fully exit all risk assets. Sell to anyone who is buying. Equities, crypto, your grandmother if she’s buying. The downtrend that follows will be horrendous.

Ww

Had a few questions on this idea... My reply, read the idea again. Slowly. Have a cuppa.

I think it is fair to say most of the internet is bearish right now. That is a mistake. Why? You din't read it did you?

The idea is not yet void.
Not until a monthly candle BODY close prints under 5270.

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Did you buy the dip?

Stay long until 6k is crossed.
Lovely signal last week, well done to all who entered long during the panic.

Retail traders who sold in panic last week were deliberately flushed out as institutions bought the dip. Max pain for retail should this monthly chart print as is in the next 10 trading sessions.

You have to look all the way back to 1998 for this candle print pattern. On confirmation the market went up like a rocket back then.

5360, throw the farm at it when this levels strikes.

交易开始

5400 was the low. Did you see the daily close candle?
A world of regret is about to hit those that sold their positions in the panic.

Short sellers meanwhile have loaded up on Put contracts to levels not since early June when the index was at 5200. The wisdom of short sellers watched in horror as the market ran to near 5700.

S&P 500 daily

Put/Call ratio

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** new all time high **

Now if 6500 does not print in the remainder of this year it will be more likely a print to 7000 occurs in the next. Will keep the idea updated.

The market did an excellent job today shaking out weak hands only to close higher, much higher. The result? A monthly hammer candle on close.

The elevator ride up to 6500 is well under way.

Seems like the monthly hammer candle is er hammering.

If the bears are unable to push price action back below 5750 by the end of this week, fireworks will be coming for the following week.

前天

A number of messages (okay 5 in total) in the past 3 days now informing me this idea is dead or the market will never see the suggested target. Everyone is now a bear.

Two rules that can never be broken,
wrong movie
Two questions that can be never ignored, as I tell students:

1) Support and resistance, which is it?
2) The trend, up or down, which is it?

All of the bearish messages have ignored two simple idea, look left.

1) RSI and Price action continue to show support on past resistance. It is as clear as night follows day. Not only is price action support maintain but also RSI.