CRASH on the S&P500 and the economy / PART 2 ( Update )
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REMINDER
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We did a few months ago an analysis on the S&P500 chart based on some behavior patterns, which would trigger some results, we marked some crash zones, but the fundamentals have changed this past scenario.
What is the reason for this change? The big dollar printing by the Federal Reserve and the unwary investors who have been lured by these big gains. This generated a short squeeze that has continued to drive the price higher.
The chart has changed, but what has not changed is the price projection. We are still in the Crash Danger Zone, this zone will never disappear until the market has made a deeper correction.
Pay attention, because we are facing a complex situation, and here a good management is the only thing that will help us.
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ANALYSIS
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On the one hand, we still have a prolonged Divergence, which ALWAYS triggers an extremely strong correction. On the other hand, the fibonacci calculations have been rendered obsolete by the short squeeze generated, but this has triggered a Bubble pattern. The curved red line is the guide to the pattern we are talking about.
Normally bubble patterns, when they break the curve strongly and consistently, usually lose 60% of the value of the asset, then a strong rebound to 61% Fibo, and end with a total fall of 70% 80% or 90% of the value.
After this... the market is as if it were dead. If the asset has a real and natural value... This zone becomes an accumulation zone. ( Buy )
All this mentioned is the normal behavior of this type of patterns. But as we are talking about a very important and controlled market .... We must watch all the support zones marked on the chart.
In normal circumstances or less important graphs... It should penetrate all the support zones no matter what the zones are. But in this market we must be pending in each support zone and go managing our stop loss with caution and without greed. I do not recommend looking at earnings, simply be guided by the drawing and manage well the Traling Stop.
I would like to remind anyone who has forgotten... that before a sharp fall in the market... We are warned with viruses, from 2 to 3 viruses, and then always comes the crash. I did not invent this, it is written in the chart.
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HOW DO WE MANAGE IT?
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For all this, I recommend caution.
- If you are in a trade or you are in the market, the most advisable is to have a traling stop below the bubble curve.
- For the more risky, we can prepare our progressive shorts as the price continues to rise.
- For the more conservative, you can wait for the bubble to burst and on the bounce towards the 61% fibo area, open a bearish trade.
Best of luck to all.
REMINDER
----------------------------------------------
We did a few months ago an analysis on the S&P500 chart based on some behavior patterns, which would trigger some results, we marked some crash zones, but the fundamentals have changed this past scenario.
What is the reason for this change? The big dollar printing by the Federal Reserve and the unwary investors who have been lured by these big gains. This generated a short squeeze that has continued to drive the price higher.
The chart has changed, but what has not changed is the price projection. We are still in the Crash Danger Zone, this zone will never disappear until the market has made a deeper correction.
Pay attention, because we are facing a complex situation, and here a good management is the only thing that will help us.
----------------------------------------------
ANALYSIS
----------------------------------------------
On the one hand, we still have a prolonged Divergence, which ALWAYS triggers an extremely strong correction. On the other hand, the fibonacci calculations have been rendered obsolete by the short squeeze generated, but this has triggered a Bubble pattern. The curved red line is the guide to the pattern we are talking about.
Normally bubble patterns, when they break the curve strongly and consistently, usually lose 60% of the value of the asset, then a strong rebound to 61% Fibo, and end with a total fall of 70% 80% or 90% of the value.
After this... the market is as if it were dead. If the asset has a real and natural value... This zone becomes an accumulation zone. ( Buy )
All this mentioned is the normal behavior of this type of patterns. But as we are talking about a very important and controlled market .... We must watch all the support zones marked on the chart.
In normal circumstances or less important graphs... It should penetrate all the support zones no matter what the zones are. But in this market we must be pending in each support zone and go managing our stop loss with caution and without greed. I do not recommend looking at earnings, simply be guided by the drawing and manage well the Traling Stop.
I would like to remind anyone who has forgotten... that before a sharp fall in the market... We are warned with viruses, from 2 to 3 viruses, and then always comes the crash. I did not invent this, it is written in the chart.
----------------------------------------------
HOW DO WE MANAGE IT?
----------------------------------------------
For all this, I recommend caution.
- If you are in a trade or you are in the market, the most advisable is to have a traling stop below the bubble curve.
- For the more risky, we can prepare our progressive shorts as the price continues to rise.
- For the more conservative, you can wait for the bubble to burst and on the bounce towards the 61% fibo area, open a bearish trade.
Best of luck to all.