As trader we often have to look at the past to guesstimate the future. In this chart I compare two past large drawdown events, the 2000 Dotcom Bust and the 2008 Financial Crisis to our current situation. Both of these events, which were massive in nature, had drawdowns of over 50%. We are currently at 30%. If our current event is similar we should expect another 20% decline from the current 2400 level, bring us to 1500 on the S&P .
For Dotcom Bust and Financial Crisis we had one strong support zone.
But now there are more higher ones: ~2329 (more realistic), ~2063, ~1815.
Because we have those strong support zones -%50 is not so possible as previously
But now there are more higher ones: ~2329 (more realistic), ~2063, ~1815.
Because we have those strong support zones -%50 is not so possible as previously