The Golden Ratio Signals Potential Top in The Market! (S&P 500)
I know that I recently published an analysis on the S&P 500 weekly chart, showing how the S&P could enter a multi year bull market continuation here. The analysis was primarily focused on this pattern where there has been a hold of the 200 week MA (pink circles,) followed by a break above the 50 week MA, followed by two holds on the 50 week MA (green circles,) followed by a huge multi year bull rally (green arrows,) which shows initial signs of exhaustion on the first retest of the 50 week MA (yellow circles.)
Right now, price looks as if it wants to make a continuation to the upside. However, I've noticed something about this chart that really makes me second guess the upside continuation — the 61.8% retrace.
As you can see, I have plotted a measured move of the 61.8% Fibonacci retrace on this chart. The retrace is generated by a measurement of this entire bull market. What you can see, is that the golden ratio lines up EXACTLY with the two previous peaks of the dot com bull market, and the peak just before The Great Recession. If the market were to move higher, then those peaks wouldn't align with the 618 anymore. While that is always a possibility, the 618 is arguably the most prophetic number in all market analysis. When it lines up with key peaks like this, it's time to pay attention.
With that said, the proposed continuation of a multi-year bull market is contingent on new all time highs forming. If we see new all time highs, that will be a sign that the bull market is kicking into fifth gear, which could last for several years. However, if there is a fall below the 50 week MA (in orange,) that would be a deviation from this pattern that has existed through the entire bull market, and it would almost certainly be a sign that the top is in.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Right now, price looks as if it wants to make a continuation to the upside. However, I've noticed something about this chart that really makes me second guess the upside continuation — the 61.8% retrace.
As you can see, I have plotted a measured move of the 61.8% Fibonacci retrace on this chart. The retrace is generated by a measurement of this entire bull market. What you can see, is that the golden ratio lines up EXACTLY with the two previous peaks of the dot com bull market, and the peak just before The Great Recession. If the market were to move higher, then those peaks wouldn't align with the 618 anymore. While that is always a possibility, the 618 is arguably the most prophetic number in all market analysis. When it lines up with key peaks like this, it's time to pay attention.
With that said, the proposed continuation of a multi-year bull market is contingent on new all time highs forming. If we see new all time highs, that will be a sign that the bull market is kicking into fifth gear, which could last for several years. However, if there is a fall below the 50 week MA (in orange,) that would be a deviation from this pattern that has existed through the entire bull market, and it would almost certainly be a sign that the top is in.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-