This weekend I wanted to exam the topping process of previous markets that had expansive down draws to see if any of them resembled or was similar to today.
The only topping process that is following the same visual set-up on the Quarterly timeframe is 1973.
Of note:
The two Quarterly spikes above the red dotted line produced what some traders might call a "head"
Timeframes are exact-All Time Highs (ATH's) were made in the quarter that began in January; the "head" was produced from the Oct/Jan quarters
The red dotted line becomes strong quarterly resistance. Quarterly highs from July (previous year) and April (current year) maxed out around that red line.
To Be Determined-Will we see a re-visit of that red line area in the quarter that begins Oct 2022 like we saw in Oct 1973?????
Please note: This analysis is not about the lead up to ATH's nor is it trying to compare macro narratives...it's purely a visual chart topping pattern analysis!
The only topping process that is following the same visual set-up on the Quarterly timeframe is 1973.
Of note:
The two Quarterly spikes above the red dotted line produced what some traders might call a "head"
Timeframes are exact-All Time Highs (ATH's) were made in the quarter that began in January; the "head" was produced from the Oct/Jan quarters
The red dotted line becomes strong quarterly resistance. Quarterly highs from July (previous year) and April (current year) maxed out around that red line.
To Be Determined-Will we see a re-visit of that red line area in the quarter that begins Oct 2022 like we saw in Oct 1973?????
Please note: This analysis is not about the lead up to ATH's nor is it trying to compare macro narratives...it's purely a visual chart topping pattern analysis!
Comment:
Here is the Quarterly Chart topping process for 2000 & 2007...These produced a 3 Quarter topping "head" but a similar "red line" could be drawn that was hit 5 times just like 1973.
So following a "5" quarterly "hit" rule of the red line-This would mean we would re-visit the 4545 area (roughly) before we really move downwards.
Comment:
Not at all similar....
Comment:
If your a perma bull who doesn't believe in the "market crashing" narrative that seems to be floating around social media then you want to see a very bullish break above the 4550 area!
Comment:
Last chart...here is the weekly charts of today vs. 1973:
BULL CASE-It's important to stay above the last ATH before correction (3588.11). This would show conviction of the importance regarding the Sept/Oct 2020 consolidation/correction.
Notice how in 1973 the bears were poking holes in the ATH before a solid correction vs. today.
Notice how in 1973 the bears were poking holes in the ATH before a solid correction vs. today.