S&P At 3850, NASDAQ 100 At 11690, Dow At 31220: Warning Signals
2022.05.15 11:51
Traders reap the value of intermarket technical/quantitative analysis in capturing junctures, where various asset classes have reached potential inflection points.
Such levels can be support/resistance in terms of TA, or moves in material magnitude, such as 20% or 30% declines/gains, which trigger program driven trading.
So during Thursday’s market carnage , I sent the below charts to my WhatsApp Broadcast Group, highlighting the vital technical levels in five key markets. It’s all about confluence across different asset classes. Here’s how.
Indices Intermarket Confluence Chart
Whatsapp-SPX May 13th, 2022
In Thursday’s case, as S&P 500 fell to 3928, I highlighted 3840/50 as the point of 20% decline from its highs, qualifying as bearish market territory. I added the 11720/50 level for NASDAQ 100 as the -30% threshold and 31400 in the Dow as 15% downside from its highs.
Identifying the levels in these 3 charts served as a warning—even as those levels had not yet been hit by the time of chart publication .
Considering the correlation between cyptos and risk-assets, I highlighted the 28500-29000 range as the must hold level for Bitcoin (March 2020 trendline support on a closing basis), combined with other quantechicals.
Towards the end of Thursday’s US session, markets sustained a fresh risk-off attack, forcing SPX, NASDAQ 00 and Dow30 to new daily lows at 3858, 11690, and 31220 respectively. The levels were in line with the points highlighted in the charts as it was for Bitcoin. The sole exception was gold, which ended up breaking the $1830 trendline and is currently resting atop $1800.
At time of writing (Friday 18:50 London time), indices are up more than 3% for growth and 1.5% for value and, [subsequently], delivered the first Up-Friday session since Mar. 25. The next challenge is where do we mark the top in this bear market rally? But this could all change if SPX manages this 100-WMA accomplishment stated here.
