SP500 SPY ETF supply and demand analysis and forecast for 22nd April 2019. SP500 SPY ETF is trying to break weekly supply at all time highs around 293.
There is a clear long term weekly and monthly uptrend with all time highs previously eliminated and brand new demand zones created on bigger timeframes like the one on the weekly timeframe around 281.In an uptrend, supply levels are eliminated and demand levels are created and respected.
SP500 SPY ETF has already broken all time highs, expecting to see similar price action on other american indexes like Dow Jones and Russell 2000 indexes.
The bigger the impulse created by new imbalances of demand the better. There is no reason to go short counter-trend on SP500 SPY ETF when everything is heading north and new demand levels are being created. Trading with the trend is always higher odds.
For those who do not know what an ETF is, an ETF is an exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds and generally operates with an arbitrage mechanism designed to keep it trading close to its net asset value, although deviations can occasionally occur.
As supply and demand traders, we do not need to pay attention to the news, fundamentals or any earnings reports. Once a big timeframe imbalance has gained control, earnings do just the opposite and reacts strongly to those imbalances. Why is it that you see positive earnings and then the underlying stock drops like a rock, or a negative earnings announcement and the stock rallies like a rocket out of control? You are probably missing the fact that there are big imbalances gaining control.
Unless you are doing very short term trading and scalping, you should not worry about fundamentals or earnings announcements.
You can use these imbalances to plan your trades in lower timeframes. Trading is just waiting for the right trigger points and scenarios to present themselves, this game has got a name and it’s called the waiting game. We need to patiently wait for the correct scenarios and setups to happen and wait for price to pullback or dip into the price levels we want to trade, in our case these price levels are made of supply and demand imbalances.
There are several ways of buying stocks. When trading stocks, you can buy shares of the underlying stock or use options strategies to go long or short at these specific supply and demand levels, long calls or long puts or spreads. You can even buy a CFD (contracts for difference) if you are in a country where it’s allowed.
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