Knowing, after the fact, the March decline was extraordinary I began tracking an inevitable recovery. In anticipation I had identified 14 historic declines of similar magnitude over the last 100 years. The current event became 15.
A key milestone of recovery is the eventual cross of MACD/PPO vs related signal line (e.g., fast vs slow Exponential Moving Averages). From that event forward I then track weekly recovery by % gain/loss and include an average gain/loss. The process uses weekly data.
The crossing event happened 5/18/2020 (indicated by Red arrow for MACD at bottom and Yellow arrow as "start" date/price). At present, 11 weeks later, the subsequent gain is closely tracking the Average gain/loss of the prior 14 events.
Average of prior 14 events: +10.85% at week 11
2020 event: +10.68% at week 11
The Average gain/loss at week 52 (after crossing) is +34.44%. I've shown the potential target area in 2021 as "end" with a second Yellow line.
Note the "start" for comparison is at the MACD/Signal crossing event on 5/18/2020, which is after the market's earlier bottom, and is the case for the comparative 14 events. This event's bottom was in March 2020. Thus the +10.68% gain from 5/2020 forward is incremental to substantial gain from March to May. Same will be true for whatever outcome occurs by week 52 in 2021.
Not a promise, but would be very nice to see that magnitude of gain by 5/2021. The majority of the 14 prior events track higher, with those having a rapid start continuing to outperform.
How about those events in comparison to election years/months?
iamthewolf
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@mycoinmoon, You decide. here are all 15 dates of "crossing" as "start" point. 9/5/1921
7/18/1932
7/29/1940
5/18/1942
1/6/1958
8/13/1962
10/24/1966
7/20/1970
10/28/1974
8/16/1982
1/25/1988
11/5/2001
10/21/2002
3/23/2009
5/18/2020
JamesRennie
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Hey can you tell me the names of these two indicators you used PPO and RQ %? I'd like to look more into how they work.
Great use of Fib, MA, RSI and trend lines. Very interesting chart.
iamthewolf
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@Baidis, Thanks. The PPO Indicator is in the Public list of Indicators at TradingView. "RQ" is a custom indicator based on something a colleague shared. The formulas is ATR(n)/Price, meaning "Return Quotient (RQ). You choose the "n" days for ATR, where my colleague suggests 5.
In my opinion, one can't compare all declines with each other by their % number or that a certain line was crossed. The context in which they take place can give decisive indications.
FWIW here's just a different thought, although nobody knows the future anyway
iamthewolf
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@ReallyMe, Thanks for sharing your view. Feel free to make your point, but keep your content for your own publishing.
TRIBURBIAN
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This tracks nicely with my supercycle thought from April of 2019. Take a look and please comment.