Price Projections, 18 Apr 2023

🖼 Daily Technical Picture 📈

➤ Equities finished in a robust manner at the highs although it was a low volatility day. It looks like the price is digesting the break out of the short-term consolidation prior to jumping higher. The question is how much higher?

➤ I studied the Wyckoff Method some years ago under the teachings of well-known proponents Roman Bogomazov and Bruce Fraser at Wyckoff Analytics. Although I only apply some minor elements of Wyckoff philosophy in my trading strategy, it was a transformative educational experience that opened my mind to the inner workings of the market.

➤ The reason why I bring up Wyckoff is that the methodology does incorporate a price projection element using the "point & figure" chart. This chart is "old school" in that is was predominantly used by Traders in the physical trading pits at exchanges. It simplifies a messy chart by displaying price action in terms of movement rather by chronological time.

➤ So let's play around with the price projection. I used the Dec 2022 consolidation to calibrate the inputs and it gave me a price of 411.5 for the SPY. This is the projection from the Mar 2023 low. Obviously we have already met that target. In the Dec example, the price did spike a few points higher than the projection prior to actual price reversal in Feb 2023. We should apply the same leeway. Coincidentally that would allow the price to peak around 415-418 near the Feb 2023 high - an obvious point for a reversal.

➤ I remain long with a small position.

➤ Conclusion: 🐆 Let's see if the price is about to peak as suggested.

EQUITY TREND:

⦿ Short-term (weeks) - UP
⦿ Medium-term (< 6 months) - UP
⦿ Long-term (>6 months) - DOWN