S&P 500 Resistance Becomes Support: #TheCoronavirusCRASH
I expect this bear market to be shorter in duration as it is an event-driven bear market. Event-driven bear markets tend to be shorter in duration. The last two bear markets were structural bear markets that were longer in duration and caused by internal issues. Event-driven bear markets are caused by external issues and thus don't last as long. Event-driven bear markets usually last 8 to 10 months. That could conclude the market before the year ends. My guess is that it will conclude by October of 2020 or early 2021. I think it will likely complete just before the U.S. general election in November. See the commentary about this chart directly below.
You'll find my charts here: stockcharts.com/public/1092905
You'll find my videos here: thechartpatterntrader.com/
The last two bear markets had declines of just over 50 %. If this bear market declines by at least 50 %, that would take it back to 1696. In this 1696 area there is a confluence of long
term support levels.
The 61.8 % fib comes in at 1708. The median line of the Pitchfork points to the mid to high 1600 range. The previous bull market peaks have formed a resistance trendline that is pointing to the 1650 area. That resistance now becomes support.
I think the odds favor that the S&P 500 will find support in this neighborhood and decline by around 50 % or more. The support range is from 1650 to 1708.
Using the Pitchfork boundaries from the last bear market gives us some target levels for the current bear market.
The Pitchfork provides some important target levels for each wave of selling. The upper boundary of the channel in the low to mid 2100 area. Tagging the upper channel might produce a bottom for the first leg down. The median point of the channel is a potential target area that might conclude the bear market. This mid-point of the Pitchfork is at the confluence
of support range, with the 61.8 % fib and the trendline of the peaks of the past two bull markets.
You'll find my charts here: stockcharts.com/public/1092905
You'll find my videos here: thechartpatterntrader.com/
The last two bear markets had declines of just over 50 %. If this bear market declines by at least 50 %, that would take it back to 1696. In this 1696 area there is a confluence of long
term support levels.
The 61.8 % fib comes in at 1708. The median line of the Pitchfork points to the mid to high 1600 range. The previous bull market peaks have formed a resistance trendline that is pointing to the 1650 area. That resistance now becomes support.
I think the odds favor that the S&P 500 will find support in this neighborhood and decline by around 50 % or more. The support range is from 1650 to 1708.
Using the Pitchfork boundaries from the last bear market gives us some target levels for the current bear market.
The Pitchfork provides some important target levels for each wave of selling. The upper boundary of the channel in the low to mid 2100 area. Tagging the upper channel might produce a bottom for the first leg down. The median point of the channel is a potential target area that might conclude the bear market. This mid-point of the Pitchfork is at the confluence
of support range, with the 61.8 % fib and the trendline of the peaks of the past two bull markets.