I was just curious about future price action of Bitcoin and to know more about the trend I looked for stocks because bitcoin follows the stock market to a large extent. Then I looked at the current price action of S&P 500. I tried to look at the bigger picture, so I drew the three support lines as shown. The 1st Support line which is a forming a channel with the 2nd Support line and the price had been moving in this channel up until COVID occurred, and then it headed for the upper trend line of the A-VWAP and just went below the Golden Fib Ratio. But it didn't come into A-VWAP price area because of the trillions of dollars pumped in the economy, as everyone knows. It crashed by 35%, but it would and should have crashed more due to the nature of the event. But because of all the free money which all flowed in market we broke the previous highs and broke out of the channel which it had been in for a decade and eventually set the new highs. I used A-VWAP to see the average price of the whole cycle from 2008 to Global Recession.
Eventually I used the A-VWAP from the first candle which had volume to see how correct and reliable it is in long term. As you can see the chart, it shows every significant bull market and bear market very reliably. No matter how strong the bull run had been, it had come down in its area, mainly between the upper and middle trend line. In just two cases, the index has touched the bottom line. I used A-VWAP at various significant candle with higher volumes, and they showed local trends fine.
Now why I did this? The thing is in every crash and bear market there were 1 or 2 events which either directly impacted the U.S. economy or the Global economy in general. This is the first time in history that so many events has occurred in such a short period of time. In two decades we had
1. Dotcom bubble
2. Global Recession
3. Economic conflict between the two strongest economic powerhouses i.e. America and China
4. War between Russia and Ukraine and a possible conflict between China and Taiwan
5. COVID Pandemic
6. Great Resignation
7. Countries going bankrupt and a lot of them are on the verge of bankruptcy
I am not calling some doom's day to be very clear, it's just that we have not seen any significant impacts (except the first two) to justify any of these events. Even the first two events were contained to a significant extent by Fed's interventions which eventually slowed down the growth of economy for a decade and added to the debt of U.S. Fast forward we have now a confirmed inflation and to be confirmed recession and if that happens welcome stagflation. We can not avoid it this time because we have already printed enough for upcoming decades and Fed can not lower interest rates. This time and market is so unique that there is not any data to compare and rely on. No one is sure what will happen, but in a way that's dangerous because nobody knew what would happen during the global recession and global depression. But something like Global Depression is highly unlikely because then U.S. would intervene even if they have to just erase most of its debt.
There is another concern here, see the chart of the current run, there is not any corresponding volume to the prices. In fact, volume has been decreasing since 2009. The only plausible reason I could find is that Tech sector forms the biggest chunk of S&P 500. You should see the charts of the tech companies, they have been going parabolic in price, while the Volume doesn't correspond to them.
S&P 500 will very likely test the 2nd support in upcoming months. Testing of 3rd support also has good chances. Man, there are no reasons or good substance for it to bounce from the second support and resume the uptrend again in the next year or so. In my opinion, we should go to the A-VWAP area in upcoming years. But if it goes higher then the bigger it is the harder it falls. But it's just my opinion. Thank you for your time.
Eventually I used the A-VWAP from the first candle which had volume to see how correct and reliable it is in long term. As you can see the chart, it shows every significant bull market and bear market very reliably. No matter how strong the bull run had been, it had come down in its area, mainly between the upper and middle trend line. In just two cases, the index has touched the bottom line. I used A-VWAP at various significant candle with higher volumes, and they showed local trends fine.
Now why I did this? The thing is in every crash and bear market there were 1 or 2 events which either directly impacted the U.S. economy or the Global economy in general. This is the first time in history that so many events has occurred in such a short period of time. In two decades we had
1. Dotcom bubble
2. Global Recession
3. Economic conflict between the two strongest economic powerhouses i.e. America and China
4. War between Russia and Ukraine and a possible conflict between China and Taiwan
5. COVID Pandemic
6. Great Resignation
7. Countries going bankrupt and a lot of them are on the verge of bankruptcy
I am not calling some doom's day to be very clear, it's just that we have not seen any significant impacts (except the first two) to justify any of these events. Even the first two events were contained to a significant extent by Fed's interventions which eventually slowed down the growth of economy for a decade and added to the debt of U.S. Fast forward we have now a confirmed inflation and to be confirmed recession and if that happens welcome stagflation. We can not avoid it this time because we have already printed enough for upcoming decades and Fed can not lower interest rates. This time and market is so unique that there is not any data to compare and rely on. No one is sure what will happen, but in a way that's dangerous because nobody knew what would happen during the global recession and global depression. But something like Global Depression is highly unlikely because then U.S. would intervene even if they have to just erase most of its debt.
There is another concern here, see the chart of the current run, there is not any corresponding volume to the prices. In fact, volume has been decreasing since 2009. The only plausible reason I could find is that Tech sector forms the biggest chunk of S&P 500. You should see the charts of the tech companies, they have been going parabolic in price, while the Volume doesn't correspond to them.
S&P 500 will very likely test the 2nd support in upcoming months. Testing of 3rd support also has good chances. Man, there are no reasons or good substance for it to bounce from the second support and resume the uptrend again in the next year or so. In my opinion, we should go to the A-VWAP area in upcoming years. But if it goes higher then the bigger it is the harder it falls. But it's just my opinion. Thank you for your time.