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Theory: OMXS30 falls +-6% from 1818 points (24 SEP 2022) to 1703


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Theory: OMXS30 falls +-6% from 1818 points (24 SEP 2022) to 1703

Theory: OMXS30 falls +-6% from 1818 points (24 SEP 2022) to 1703

-------------------

Leo Olsson 24 SEP 2022 23:00 (CEST)

Topics

 

  • Fall below the support line of 1871 points (strongest)
  • MACD intersects signal line from above
  • RSI trending down
  • Next support line is at 1703 points, price is chasing support
  • CBOE Equity Put/Call Ratio is lower than our last bottom on March 12, 2020
  • Ratio between the high point, 2470, on 3 JAN 2022 and the 1703 point                                                                                                                                                                                  is percentage-wise identical to the ratio between the high of 1870 points,                                                                                                                                                                            17 FEB 2020 and the low of 16 MAR 2020 (Corona, Approx. -30%) 
  • Macroeconomic changes: interest rate hikes
  • Other: MA 50 slips above MA 200
  • Benefits for long term savings: 1703 is the bottom reached? 

 _________________


Passed the support line at 1871 points

0RUFphZB1F8o5ZGvnJvun2WU1RMz-z1DU6LA-yYhKYAbvX_1aiEPppmKXAKU5Ulojtt639XnnuEOR9ezjc_yPSzOQVbmN-S24R5VSO5JHn7NpIywIMkQj4B1pFMWtvIcp1HCZEv814AVdpPg0_BhZZQFzIiaSeU21xQW2Gmiw6X1OnxCZJa1QRLLvQ

The price fell through the support line at 1871 points. May indicate that the market is not satisfied with the price "only" falling to the 1870 line with the circumstances (macroeconomic changes, further down).

Today's Equity Put/Call Ratio is longer than the last top on March 12, 2020

xjfdzRK8HtGZv7hqS0lS1h4vRH9J5X1uvbP5ndJWnMzfuZ_UuipgcO73RkC7uFl5tLGXnxsAeVGQ_CCwNN7A_IqzOPSOH3TbYtakhirl05I3MRfZyconRgO6CtxX8oW61x6PXIG71aZ-1QZoZe2ouPLQ9S_ukn6HX6Zebv4NpFp6oquk7kpWNuSAPg
Source: Chicago Board Options Exchange

The Equity Put/Call Ratio has been historically good at predicting bottoms and tops for the market. Right now, today's Put/Call Ratio is 0.2 units from the peak on March 12, 2020, which may indicate that a bottom has not been reached. This hypothesis is formed in conjunction with the fact that the price of the OMXS30 has crossed the support line and then not shown support for a new trend to occur.  

The ratio between the high point and the point 1703 is percentage-wise identical to the similar event 

-gJYPKeINwiY7UiiYyainthtOPPKJqWByX58K0E6iMrwSBEnynfMS4Cgge8DxH0fhdvd0SnRFFroEVB8_Ojc8e9stfOMTuXco_fi_qoCwh_exlZWcNf6XfYu1UwZHG7NW1n1JoU6UkeLlMHzCCL1E7FvDdO6Fr2QoNjudzXZIW-hUypO6GrULFOVjw

Left: Previous event Right: Potential repeated event White Line: New Support

The market likes to repeat itself. On 17 FEB 2020, the OMXS reached a new ATH only to fall sharply shortly after. The difference between the high of 1870 points,
17 FEB 2020 and the bottom quote 16 MAR 2020 (Corona) has about identical percentage ratio between the high point, 2470, 3 JAN 2022 and the point 1703, Ca, -30%.  

MACD intersects signal line from above

nCvloZnSU5gp21Cv3N4xz-rcUBo8zJFygwbI1y1VwHWJb1AB5X_oKJOC9QVyxfzBjaXEErGiAQSVtnHG6e0vsid_8V94yYrbRp5PGU1ABal29bAC6cCLbllrykXSK3nITLKTWtJFsJBKyeLrnwBI2oNFuCp3cdvvaYHonLBlbu6Rcut8X7FC6jhX-w

MACD 12 26 9 managed to cross the signal line from below but quickly thereafter MACD cut the signal line from above suggesting a bearish signal of continued decline. 

RSI trending down

TMJr93ay0iga9fMzXiMRnQKMrXFlFmf4hdNZu3q3bLFlvKuNwfvULgAu4YPEXNwfiIpq5QYewvz1WCqdeDYUrKgYA9pZbCG-_KPLe9kli6ofwfGp5pX84oU8h0FXdFib9iBGqDW2ya53aDERx-_8Kn5YJKWbS_MgxruP-A3ZywlZKRRAd4x102Ns5g
White highlighted

After the RSI 14 reached 50.00 it fell down, it is trending down and gives a bearish signal of continued decline. 

The next support line is at 1703 points (Price Target)

U4UPyYlV1Kro_cy1nTPipAMB1A2TcF6ysM7CF0AtBaGjGZZgs2n_titk2OTGaETSDfjcytK0GkDaD8z104KNjc7vicx_xmXJNU9WsUg4opVzftF_Qcy7xI0Dbv2lhAcTgv1KGm3zW8tSOouX8k8MipsjwJy3p5jIOMtTgemIpApU-NyXinjxVyhIUQ

As the price crossed the support line at 1871 points, it is not unreasonable if the price is chasing a support to which it can fall back in troubled times and uncertainty. The particular support of 1871 is selected as a profit target for a short position from today's levels until then (1817 - 1703). The potential for the price to fall below the set support line at 1703 is entirely possible if the theory is correct. How the "newly set" support line can be positive for long term trading is discussed later.    

Macroeconomic changes: interest rate hikes
The one percentage point increase in the key interest rate on 20 Sep had a negative impact on the stock market for reasonable reasons. This macroeconomic change supports the claim of a continued decline.


Benefits for long-term savings
If the price falls to the support line 1703 and shows together with continuous volume and trading that 1703 is an active support line for the OMXS30 that is not broken, it can give a wonderful signal that a bottom has been reached. Cash intended for long-term savings can be invested in the index with the conscience of timing the market. 

Other
     MA 50 slips above MA 200

Nsm-2sAzz_z2pBx5egXfvFiNq4Gkee9NkPhf9t4YuLthErVzJnG8rZCgHfDGJqqPnxHOK1nAXcWQG24D1ghllXpw85fT3R3mayKY9QGwyHLsbVXvRtoz6csvxeS4xgFZD0jhu4R_IxpVYh4j2G87WsKnyiO6p_PtDGitNyxsntxQcy5Lp5shRdk1qQ
MA 50: Blue MA 200: Pink

The MA 50 sliding above the MA 200 gives us neither a buy signal nor a sell signal but it guarantees that the MA 50 will most likely fall through the MA 200 and signal a downtrend.    

  • Like 1
Link to comment
On 25/09/2022 at 13:58, LeoO1 said:

Theory: OMXS30 falls +-6% from 1818 points (24 SEP 2022) to 1703

Theory: OMXS30 falls +-6% from 1818 points (24 SEP 2022) to 1703

-------------------

Leo Olsson 24 SEP 2022 23:00 (CEST)

Topics

 

  • Fall below the support line of 1871 points (strongest)
  • MACD intersects signal line from above
  • RSI trending down
  • Next support line is at 1703 points, price is chasing support
  • CBOE Equity Put/Call Ratio is lower than our last bottom on March 12, 2020
  • Ratio between the high point, 2470, on 3 JAN 2022 and the 1703 point                                                                                                                                                                                  is percentage-wise identical to the ratio between the high of 1870 points,                                                                                                                                                                            17 FEB 2020 and the low of 16 MAR 2020 (Corona, Approx. -30%) 
  • Macroeconomic changes: interest rate hikes
  • Other: MA 50 slips above MA 200
  • Benefits for long term savings: 1703 is the bottom reached? 

 _________________


Passed the support line at 1871 points

0RUFphZB1F8o5ZGvnJvun2WU1RMz-z1DU6LA-yYhKYAbvX_1aiEPppmKXAKU5Ulojtt639XnnuEOR9ezjc_yPSzOQVbmN-S24R5VSO5JHn7NpIywIMkQj4B1pFMWtvIcp1HCZEv814AVdpPg0_BhZZQFzIiaSeU21xQW2Gmiw6X1OnxCZJa1QRLLvQ

The price fell through the support line at 1871 points. May indicate that the market is not satisfied with the price "only" falling to the 1870 line with the circumstances (macroeconomic changes, further down).

Today's Equity Put/Call Ratio is longer than the last top on March 12, 2020

xjfdzRK8HtGZv7hqS0lS1h4vRH9J5X1uvbP5ndJWnMzfuZ_UuipgcO73RkC7uFl5tLGXnxsAeVGQ_CCwNN7A_IqzOPSOH3TbYtakhirl05I3MRfZyconRgO6CtxX8oW61x6PXIG71aZ-1QZoZe2ouPLQ9S_ukn6HX6Zebv4NpFp6oquk7kpWNuSAPg
Source: Chicago Board Options Exchange

The Equity Put/Call Ratio has been historically good at predicting bottoms and tops for the market. Right now, today's Put/Call Ratio is 0.2 units from the peak on March 12, 2020, which may indicate that a bottom has not been reached. This hypothesis is formed in conjunction with the fact that the price of the OMXS30 has crossed the support line and then not shown support for a new trend to occur.  

The ratio between the high point and the point 1703 is percentage-wise identical to the similar event 

-gJYPKeINwiY7UiiYyainthtOPPKJqWByX58K0E6iMrwSBEnynfMS4Cgge8DxH0fhdvd0SnRFFroEVB8_Ojc8e9stfOMTuXco_fi_qoCwh_exlZWcNf6XfYu1UwZHG7NW1n1JoU6UkeLlMHzCCL1E7FvDdO6Fr2QoNjudzXZIW-hUypO6GrULFOVjw

Left: Previous event Right: Potential repeated event White Line: New Support

The market likes to repeat itself. On 17 FEB 2020, the OMXS reached a new ATH only to fall sharply shortly after. The difference between the high of 1870 points,
17 FEB 2020 and the bottom quote 16 MAR 2020 (Corona) has about identical percentage ratio between the high point, 2470, 3 JAN 2022 and the point 1703, Ca, -30%.  

MACD intersects signal line from above

nCvloZnSU5gp21Cv3N4xz-rcUBo8zJFygwbI1y1VwHWJb1AB5X_oKJOC9QVyxfzBjaXEErGiAQSVtnHG6e0vsid_8V94yYrbRp5PGU1ABal29bAC6cCLbllrykXSK3nITLKTWtJFsJBKyeLrnwBI2oNFuCp3cdvvaYHonLBlbu6Rcut8X7FC6jhX-w

MACD 12 26 9 managed to cross the signal line from below but quickly thereafter MACD cut the signal line from above suggesting a bearish signal of continued decline. 

RSI trending down

TMJr93ay0iga9fMzXiMRnQKMrXFlFmf4hdNZu3q3bLFlvKuNwfvULgAu4YPEXNwfiIpq5QYewvz1WCqdeDYUrKgYA9pZbCG-_KPLe9kli6ofwfGp5pX84oU8h0FXdFib9iBGqDW2ya53aDERx-_8Kn5YJKWbS_MgxruP-A3ZywlZKRRAd4x102Ns5g
White highlighted

After the RSI 14 reached 50.00 it fell down, it is trending down and gives a bearish signal of continued decline. 

The next support line is at 1703 points (Price Target)

U4UPyYlV1Kro_cy1nTPipAMB1A2TcF6ysM7CF0AtBaGjGZZgs2n_titk2OTGaETSDfjcytK0GkDaD8z104KNjc7vicx_xmXJNU9WsUg4opVzftF_Qcy7xI0Dbv2lhAcTgv1KGm3zW8tSOouX8k8MipsjwJy3p5jIOMtTgemIpApU-NyXinjxVyhIUQ

As the price crossed the support line at 1871 points, it is not unreasonable if the price is chasing a support to which it can fall back in troubled times and uncertainty. The particular support of 1871 is selected as a profit target for a short position from today's levels until then (1817 - 1703). The potential for the price to fall below the set support line at 1703 is entirely possible if the theory is correct. How the "newly set" support line can be positive for long term trading is discussed later.    

Macroeconomic changes: interest rate hikes
The one percentage point increase in the key interest rate on 20 Sep had a negative impact on the stock market for reasonable reasons. This macroeconomic change supports the claim of a continued decline.


Benefits for long-term savings
If the price falls to the support line 1703 and shows together with continuous volume and trading that 1703 is an active support line for the OMXS30 that is not broken, it can give a wonderful signal that a bottom has been reached. Cash intended for long-term savings can be invested in the index with the conscience of timing the market. 

Other
     MA 50 slips above MA 200

Nsm-2sAzz_z2pBx5egXfvFiNq4Gkee9NkPhf9t4YuLthErVzJnG8rZCgHfDGJqqPnxHOK1nAXcWQG24D1ghllXpw85fT3R3mayKY9QGwyHLsbVXvRtoz6csvxeS4xgFZD0jhu4R_IxpVYh4j2G87WsKnyiO6p_PtDGitNyxsntxQcy5Lp5shRdk1qQ
MA 50: Blue MA 200: Pink

The MA 50 sliding above the MA 200 gives us neither a buy signal nor a sell signal but it guarantees that the MA 50 will most likely fall through the MA 200 and signal a downtrend.    

We can see that for every new low it is a small upturn (4-6% before a new low is about to happen, together with the inverted hammer that was formed today im going long, +5% and if the price start to go to an uptrend there after its a sell signal that follows the factors mentioned abow to the "new" support line 1703 points. 

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