The S&P 500 measures the performance of 500 large publicly traded companies in the United States. The index is widely regarded as a benchmark for the overall performance of the US stock market and is used by investors and financial professionals to track the performance of the US economy.
The S&P 500 experienced significant volatility and decline in the year 2001. This was primarily due to the dot-com bubble burst and the September 11 attacks.
I find 2001-02 similar to 2022-23 and here is why;
In 2001 S&P plummet 38% till September and we witnessed a relief rally in October (23% up) and fake breakout of long trendline resistance on weekly timeframe. However index got rejected from Fibonacci level of 0.38 and plummet 35% more forming a bottom in the month of October-2002
Current bear market started from start of 2022 and S&P plummet 27% till September-2022 following a relief rally from October (20% up). It has also shown breakout from long trend line resistance and rejected from Fibonacci level 0.5.
My view is that current breakout is a fakeout like 2001-02 and S&P can plummet more about 20-24% till 3200 (0.618 Fib level of covid rally). Currently S&P is trading at 3921 level.
Disclaimer: Not a financial advice, economics 101: past performance does not guarantee future results. #DYOR.
My only Q is are we going to do the 5% rally like the week of May 13th, or was this rally it, got to a bit above 4% or so
Could be 3700-3800 this week (maybe right before fed, no clue tbh) and then rally back to 3900-4k again and then drop
Mind you the macro is a bit different though
QE looks like October of 2008, and then we collapsed (remember we bounced after Lehman too)
If we continue to raise rates into an economic slowdown and eps coming down, we then could look like the end of 1974 (50% fall from high) or 1970 (33% fall from high)
mjcpaull
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It's an interesting observation, noting the 2023 cycle is running about 2 months later than the 2001 cycle - this puts the bottom in Dec 2023 ..... I'm still looking fo 3250 as my low .... catching the timing is extremely difficult MP
nzahir
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@mjcpaull, We are 1-2 months ahead if looking at 2022, not behind
DaddySawbucks
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@mjcpaull, dotcom crash was over 900 days went until apr 03. by a similar measure we about not quite halfway thru this bear
Prosheriff
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Brilliant!! Thank you for sharing your insights and analysis of the S&P 500's performance in 2001-02 and comparing it to the current market situation. It's freakin interesting to see historical patterns and how they may potentially repeat themselves.
As you mentioned, it's important to keep in mind that past performance is not a guarantee of future results and that every market situation is unique. It's important for traders and investors to do their own research (DYOR) and make informed decisions based on their own risk tolerance and financial goals.
I'm looking forward to seeing how the S&P 500 performs in the coming months and whether it follows a similar pattern to 2001-02 or takes a different course. Thank you for sharing your perspective on this topic!
DaddySawbucks
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aye spot on imo. no bear market ends until vix breach 40. dot com got to just over 40. GFC went over 90.
Tradersweekly
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Thank you very much for sharing. I am also on the bearish side.
JoeChampion
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Good job buddy, we are also bearish on the stock market here!
optionscalendarhawk
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Fed printing unlimited dollar is not to send the market to 3200 is to make market go spiral up so above...it's not the economic crisis...it is the US dollar devaluation that makes the price of everything including stock market which is priced in dollar goes up....
Chillam
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A lot of water still to flow under this particular bridge. Also, a lot of wild surmising parading as lamb. Keep your own counsel and your eyes open.
My only Q is are we going to do the 5% rally like the week of May 13th, or was this rally it, got to a bit above 4% or so
Could be 3700-3800 this week (maybe right before fed, no clue tbh) and then rally back to 3900-4k again and then drop
Mind you the macro is a bit different though
QE looks like October of 2008, and then we collapsed (remember we bounced after Lehman too)
If we continue to raise rates into an economic slowdown and eps coming down, we then could look like the end of 1974 (50% fall from high) or 1970 (33% fall from high)