This chart shows the periods with inverted 10y2y yields. Usually inversion doesn't lead to recession, like 2008. However the similarities with 2000 are striking. 3 Years ago we had a brief yield inversion, like in 1998. Then a second inversion occurred, bringing prices down with it. The same happens now. Half of the bubble burst occurred with yields inverted. Therefore it isn't necessary for yields to normalize for us to drop. We are in a bubble and it probably has burst.
And a less interesting part of the idea follows:
Yesterday some uninteresting-number-of-weeks candles closed. It was fun checking out where we are and how RSI reacts.
This has nothing to do with trading. I just love charts. I didn't bother with 1W chart because I consider it common.
In the following charts SPX is analyzed. I could post them in a new idea but got bored...
2W - we couldn't escape the ribbon, and RSI is flirting with its EMA. It is a tad lower than 50.
3W - RSI below its EMA and below 50.
4W - A bull trap on the price appears. But we are above the ribbon (for now?). RSI just barely above 50.
6W - A bullish engulfing or something? And then an inverted hammer appears.
Even though stochastic RSI reached the bottom, this doesn't mean that there is enough buildup to push RSI upwards. It takes two to dance/grow. Also EMA of RSI is helpful to me. RSI passing it provides me with an early signal of trend change.
9W - In this chart, the similarities to 2008 end. It resembles the .com bubble burst. It resembles the region just before the October 1998 rally. This one is less grim to the charts before. The candle however is a little mixed.
12W - Kinda bullish? I dunno... RSI made a higher low
18W - 2014-2022 stochastic RSI shows clear divergence. Stochastic producing lower highs, and with this candle it is confirmed.
36W - RSI and it's stochastic show a close similarity to September of 2000, the .com bubble burst.
Finally, I will add this DJI chart showing us where we are in history.
Let the drop commence I guess?
And a less interesting part of the idea follows:
Yesterday some uninteresting-number-of-weeks candles closed. It was fun checking out where we are and how RSI reacts.
This has nothing to do with trading. I just love charts. I didn't bother with 1W chart because I consider it common.
In the following charts SPX is analyzed. I could post them in a new idea but got bored...
2W - we couldn't escape the ribbon, and RSI is flirting with its EMA. It is a tad lower than 50.
3W - RSI below its EMA and below 50.
4W - A bull trap on the price appears. But we are above the ribbon (for now?). RSI just barely above 50.
6W - A bullish engulfing or something? And then an inverted hammer appears.
Even though stochastic RSI reached the bottom, this doesn't mean that there is enough buildup to push RSI upwards. It takes two to dance/grow. Also EMA of RSI is helpful to me. RSI passing it provides me with an early signal of trend change.
9W - In this chart, the similarities to 2008 end. It resembles the .com bubble burst. It resembles the region just before the October 1998 rally. This one is less grim to the charts before. The candle however is a little mixed.
12W - Kinda bullish? I dunno... RSI made a higher low
18W - 2014-2022 stochastic RSI shows clear divergence. Stochastic producing lower highs, and with this candle it is confirmed.
36W - RSI and it's stochastic show a close similarity to September of 2000, the .com bubble burst.
Finally, I will add this DJI chart showing us where we are in history.
Let the drop commence I guess?
Trade active:
Some may ask what can be inferred from this chart. A way I pinpoint bottoms is:
When RSI closes above, retests and then increases from its MA, this could constitute it a bottom. This however must be true in different timeframes. With today's picture being an "RSI in a significant fall", we have much time to begin talking about growth again. Even if we grow now, the growth will be limited.
When RSI closes above, retests and then increases from its MA, this could constitute it a bottom. This however must be true in different timeframes. With today's picture being an "RSI in a significant fall", we have much time to begin talking about growth again. Even if we grow now, the growth will be limited.
Comment:
Look at this Head and Shoulders that is shaping in the RSI of SPX
Comment:
Not looking good mate... not a good way to close a 3 month candle...
Comment:
So what does the Quadratic Kernel tells us right now?
I will consider a bullish scenario (success) when we are above the green dots.
A failure when we are below it in a bad-looking fashion.
A mixed view when, well... when I am mixed.
1W chart - Will attempt a retest. In June it failed to sustain above it. Failure.
2W chart - Same as before, but RSI looks slightly encouraging. Mixed.
3W chart - A bull-run like the June one is required to reach the dots. RSI is below 50. Even with that low of RSI, a bull run was possible in June. We have LOTS of way to reach the dots. Failure.
6W chart - We are revisiting the June of 2008. A failed bull run takes us in a similar spot. Failure.
7W chart - RSI is below 50, not good mate... In such a high timeframe it is a rare event which many times leads to more downfall. Stochastic has reached the bottom which doesn't mean that we have only up to go from here. Failure.
14W chart - We are above the dots, maybe there is a chance to make it. Mixed.
21W chart - Very similar to 1969 actually. Which makes sense since we are now dealing with sticky inflation. We have apparently "landed" on a meteorite which is like exactly the same as in 1969 when we apparently landed on the moon. They like to make history repeat itself. The chart however looks like a success!
I will consider a bullish scenario (success) when we are above the green dots.
A failure when we are below it in a bad-looking fashion.
A mixed view when, well... when I am mixed.
1W chart - Will attempt a retest. In June it failed to sustain above it. Failure.
2W chart - Same as before, but RSI looks slightly encouraging. Mixed.
3W chart - A bull-run like the June one is required to reach the dots. RSI is below 50. Even with that low of RSI, a bull run was possible in June. We have LOTS of way to reach the dots. Failure.
6W chart - We are revisiting the June of 2008. A failed bull run takes us in a similar spot. Failure.
7W chart - RSI is below 50, not good mate... In such a high timeframe it is a rare event which many times leads to more downfall. Stochastic has reached the bottom which doesn't mean that we have only up to go from here. Failure.
14W chart - We are above the dots, maybe there is a chance to make it. Mixed.
21W chart - Very similar to 1969 actually. Which makes sense since we are now dealing with sticky inflation. We have apparently "landed" on a meteorite which is like exactly the same as in 1969 when we apparently landed on the moon. They like to make history repeat itself. The chart however looks like a success!
Comment:
The 1W is mixed, not failure.
Comment:
LAST MAN STANDING