The fact we've not seen a big spike out of the 423 on the SPX chart of this same swing bothers me. Chills me to my beary bones, tbh I know the extreme pain that tends to come shorting before a spike out. The move is so harsh it's very hard to short into the next high if you do not either stop out well and/or hedge reverse well. SPX chart below so you can see where we are there.
But the DJI has spiked out this fib if we use the 2000 drop. The March 2020 high was almost specifically on it. It's spiked out, and the spike out had terminated at a 161 fib. I consider all of these to be testable edges that have good historic value in forecasting market crashes (And they also allow for good stop losses. Clear stop above the high here on DJI).
If we make the forecast swings, we'd form a head and shoulders pattern on the DJI. A head and shoulders pattern of a big 423 spike out ending 161 is, like ... bear porn.
I think a clear breaking of this area, a big rally to retest it and this then later being rejected will come to be seen as the final failure of the bull run, should this setup and act that way after.
The clearest warning sign of bull market failure, is this break and rejection of the 423. This backtests really well against the end/reversal of trends.
The clearest warning sign of bull market failure, is this break and rejection of the 423. This backtests really well against the end/reversal of trends.