Zone colour Master Key: Blue = Monthly Purple = weekly Orange = Daily Grey = 4hour Pink = 1 hour
Please see our previous idea - where 3920 for the SPX has been achieved, with an explanation as to why.
The idea which lead to where we are now using Fibonacci from the latest correctional move.
The main idea for 2021:
Rolling returns - historical data . Using the base model of 3 year rolling returns, the simplified explanation of the model shows a 41/50 years have returned a positive growth. As opposed to 6 years of negative returns. With 2020 closing out 16.26% return .
*Note - the 6 years where the rolling return is negative - the dot com bubble only stood to lose 6.2%* Est
Why the previous Extension zones fell in line with inefficiency 1 . Price has followed the path prediction thus far to a almost perfection at this moment in time. The reason for this is using the daily, weekly and monthly. The probability of the imbalances remain clearer.
SPX500 vs the VIX The Vix to be maintaining below 35 max positional moves will show correctional patterns of distribution flows in the smaller timeframes where price engineering will take place to allow discounted prices to occur. This will tend to steady the recovery but also give the rally base rally move a chance to breathe.
Vix update:
SPX vs Emerging: What does the emerging markets show us? Well the imbalances are within the same as the US market, but the economic recovery in terms of imbalance price driving in the EEM - shows that whilst fundamentally there is more volatility. The activeness of these markets provides a telling Fibonacci extension target is not to dissimilar along with the SPX. The commodities such as Copper, Silver, Gold and Platinum will now provide a solid buy opportunity now the demand will grow. The second image shows the return % of the fund upon a scale against the SPX on a daily chart close.
Fundamental failures, to ensure imbalances are made clear for the bullish scenario. The FED injecting 22% of all USD in circulation within one year. A Staggering amount of est 9T USD was injected to save the US from collapse, despite its ever mounting debt of as it stands 11. 01 .2021 27.775T USD usdebtclock.org/index.html The question remains as the USD loses value - in order to promote cheaper investment and more prospects for cheaper imports - the country will have a real issue with the constant cycle of financing debt upon debit.
With the Global fiscal policy to remain between 1.5-2% - this should keep the FED side lined for a few years monitoring the US and world economy. What we would expect to see will be the growth of EM and commodity based countries in terms of FX to continue the growth against the USD.
Last comparison; Inflation ETF vs SPX500. If you as a trader are interested in the price ratio of Shiller P/E ratio, the market is at this moment 35.83x, with low inflation at the moment, the bulls are on the run. Watch this space.
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