Stock Market Major Top Likely With the Next 4 Sessions While You're Falling Asleep S&P500 CRASH Soon

Summary

The speaker discusses the potential for a significant market top to form, based on various technical indicators and trend lines. They highlight the importance of the PCE inflation data and the upcoming Federal Reserve Chairman Powell's testimony, which could act as catalysts for a market reversal. The analysis includes the possibility of a short-term rally followed by a sell-off, and the formation of bearish patterns such as a double top or head and shoulders. The speaker also notes the presence of negative divergences on the RSI and other indicators, suggesting a high level of complacency among investors. They caution that while their signals remain bullish, warning signs are present, and a major top could be in the process of forming, potentially leading to a substantial downturn in the market.

Takeaways

• 📈 The speaker anticipates a market rally due to the PCE inflation data, suggesting a potential peak within the current or next week.
• ⚠️ Warning signs are present, with the speaker highlighting a possible major top formation, indicating a significant market downturn could be imminent.
• 🔺 The speaker discusses trend lines and resistance levels, noting that if the market slightly surpasses the peak, it could hit the monthly resistance trend line.
• 📊 The speaker mentions various technical indicators such as the MACD and stochastic turning down, suggesting potential bearish signals.
• 🚀 The speaker expects a continuation of the rally and a possible completion of a 13-count sell signal, which could mark the market peak.
• 📅 The speaker is closely watching the trend line breaks and Federal Reserve (Fed) Chairman Powell's upcoming testimony, which could be a catalyst for market movement.
• 💹 Despite warning signs, the speaker's signals remain bullish, but they acknowledge the potential for a sharp decline and a major top in the market.
• 🤔 The speaker expresses concern over market complacency, drawing parallels to past market bubbles and crises, where people did not anticipate downturns.
• 📉 The speaker suggests that if the market breaks certain trend lines, particularly with Powell's influence, it could result in a violent move downward.
• 📝 The speaker emphasizes the importance of watching for specific chart patterns such as bullish wedges and divergences, which could signal market direction.
• 🌐 The speaker also discusses broader economic factors, including inflation rates, Federal Reserve rate cuts, and their potential impact on the market.

Q & A

What is the speaker's expectation regarding the market trend in the near future?

The speaker expects that the market is either going to peak this week or next week, potentially followed by a significant downturn or a major top formation.

What does the speaker suggest about the impact of PCE inflation data on the market?

The speaker suggests that the market had a rally due to the PCE inflation data, which came in as expected, causing a sigh of relief and a potential bounce in the market.

What is the significance of the trend line mentioned in the script?

The trend line is significant as it appears to be a resistance level that the market has consistently struggled to break above. The speaker believes that if the market breaks this trend line, it could signal a major change in the market direction.

What is the '13 Countdown' signal that the speaker refers to?

The '13 Countdown' signal seems to be a technical analysis pattern that the speaker uses to predict potential market tops or bottoms. The speaker suggests that the completion of this pattern could indicate an imminent market peak.

How does the speaker describe the current market sentiment?

The speaker describes the current market sentiment as complacent, similar to the sentiment before major market downturns such as the tech bubble burst or the financial crisis. The speaker warns that this complacency could lead to a violent market move when the top is eventually formed.

What role does the speaker believe Jerome Powell and the Federal Reserve will play in the upcoming market movements?

The speaker believes that Jerome Powell's testimony before Congress could be a catalyst for the market to reach its peak and subsequently move lower. The speaker suggests that the market could react to Powell's statements or the Federal Reserve's actions regarding interest rates.

What is the speaker's view on the possibility of a banking crisis?

The speaker suggests that there is a high probability of a banking crisis forming due to various warning signs and market indicators. The speaker also mentions concerns about the exposure of banks to the commercial real estate sector and mortgage-backed securities.

What does the speaker mean by 'divergences' in the context of technical analysis?

In technical analysis, 'divergences' refer to situations where the price of an asset is moving in one direction while an oscillator or other momentum indicator is moving in the opposite direction. The speaker mentions that divergences are present in the market and could signal an impending reversal in the current trend.

What is the significance of the 'bullish falling wedge' pattern that the speaker discusses?

A 'bullish falling wedge' is a technical chart pattern that is typically considered a continuation pattern that signals a potential rise in price after a period of consolidation. The speaker suggests that if this pattern breaks out, it could lead to a significant market move.

How does the speaker interpret the current positioning of the market relative to major trend lines?

The speaker interprets the current positioning of the market as being at a critical juncture, with major trend lines from past market peaks acting as resistance levels. The speaker suggests that the market is testing these levels and could potentially turn down if it fails to break above them.

What is the speaker's view on the potential formation of a 'head and shoulders' pattern?

The speaker suggests that a 'head and shoulders' pattern, which is typically considered a bearish reversal pattern, could be forming in the market. This pattern could indicate a significant top is forming, and the market could be moving into a bearish phase.