The SP500 took a breather last week. This came after seeing an explosive push on the first day of the month up to 2400, double topping at 2401 before turning lower...
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Chicagostock Trading
Chicagostock Trading
In no particular order, here were the top 5 major market changing trends of 2016 identified by Chicagostock:
1- DOW JONES CUP/HANDLE TARGET 20K
The stock market started 2016 weak, however recovered the highs of the year by summer, making a U turn. Those that were caught short, bearish, and wrong, were now forced to reverse position, thus creating the cup/handle formation, giving way to expand the U turn up to 20k.
1- DOW JONES CUP/HANDLE TARGET 20K
$YM_F Dow C/H Expansion = 20k... All aboard.. $DIA pic.twitter.com/RuhbCGiM6w
— Chicagostock (@Chicagostock) July 10, 2016
Update to Cup/Handle in DOW posted in July projecting 20k. #technicals #stockmarket #dowjones @NYSE @CMEGroup pic.twitter.com/6fJpdvVmxz
— Chicagostock (@Chicagostock) December 15, 2016
The stock market started 2016 weak, however recovered the highs of the year by summer, making a U turn. Those that were caught short, bearish, and wrong, were now forced to reverse position, thus creating the cup/handle formation, giving way to expand the U turn up to 20k.
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HOW DID THIS:
$ES_F Daily V bottom. Expansion > 1920 = test of year high. #psa pic.twitter.com/w558cz49I0
— Chicagostock (@Chicagostock) February 22, 2016
GET TO THIS?:
Commented on StockTwits: $ES_F Completes V bottom objective of 2042 from 1920. $SPY $SPX https://t.co/j102MzSsXB pic.twitter.com/yEP6aGyTfU
— Chicagostock (@Chicagostock) March 19, 2016
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Let's take a look at how the oil short squeeze took place. In February, oil broke the January low of 2756, falling to 2605 on February 11th. Just as oil was testing and ready to break 26, the UAE Energy minister came out with remarks that they were willing to cooperate on production cuts. This instantly reversed the market off the lows to see it recover 30 in the coming days. Dubbing this the "OPEC put" as it clearly showed members of the organization were attempting to defend 26.
The move, setup a failed breakdown, leaving shorts below 30 trapped:
Crude oil chart sent to clients on Friday... pic.twitter.com/rDqZjno0VU
— Chicagostock (@Chicagostock) February 17, 2016
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In December’s article “The Yellen that Stole Christmas”, the point was to show how buyers in the SP500 were caught above 2040, and needed a Yellen rescue. The market attempted to breakout to start December, however the rug was pulled from underneath as Yellen reiterated a rate hike later in the month. After bluffing the market for 2 years on this rate cut, the call fell on many deaf ears. So it was. Buyers were left caught at higher prices, betting on a “Santa Claus Rally” only to be hoping for Yellen to save Christmas. For the first time in 6 years and exactly 3 years from December 2012’s FOMC that placed a 6.5% target on NFP for a decision on Fed Funds rate, the FOMC reset the market and hiked the Fed Funds rate by a quarter point. Bulls did not get what they were looking for and saw the market fall back to retest 1982 support. The level barely held on December 18th, as the market rallied back for Christmas holiday and the “Santa Claus Rally” was actually a gift from Yellen for stuck longs above 2040 to “breakeven”, or as we like to call it “get out of jail free card”.
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