It has been awhile since I have put together a big bear chart. The weekly double top on SPY, head and shoulders on IWM, RSP and ARKK, and the carnage and weakness seen in IYT, XLF, XLU, XLP, XLRE, XLV and XLY has me thinking about bear scenarios. That does not even factor in the macro economic and geopolitical uncertainty on the horizon.
As I said above, SPY has a pretty gnarly weekly double top showing up right now. A perfect weekly double top proceeded the 2022 crash and the 2008 crash. Double tops can certainly fail but I think for risk management purposes, this scenario should at least be on the table.
Ever since the AI boom and the NVDA gap up on May 25th the crash set up seemed to be off the table for most. However one could argue it simply pushed it out in time and also made the severity less intense in total percentage terms. A similar chart pattern to what we are seeing currently is the 2000-2008 correction. If something like this plays out, we will likely make a new low in 2024, which would end somewhere in the $320-$280 area.
Big tech is holding up the market and as long as the biggest 7 or 8 tech stocks in the world keep heading higher, this scenario will not happen. However, watch for weakness in key stocks that have been holding up this market such as NVDA and MSFT. When NVDA fills its earnings gap from May 25th and MSFT fills its gap from April 26th that will likely be when something like this can play out.
As I said above, SPY has a pretty gnarly weekly double top showing up right now. A perfect weekly double top proceeded the 2022 crash and the 2008 crash. Double tops can certainly fail but I think for risk management purposes, this scenario should at least be on the table.
Ever since the AI boom and the NVDA gap up on May 25th the crash set up seemed to be off the table for most. However one could argue it simply pushed it out in time and also made the severity less intense in total percentage terms. A similar chart pattern to what we are seeing currently is the 2000-2008 correction. If something like this plays out, we will likely make a new low in 2024, which would end somewhere in the $320-$280 area.
Big tech is holding up the market and as long as the biggest 7 or 8 tech stocks in the world keep heading higher, this scenario will not happen. However, watch for weakness in key stocks that have been holding up this market such as NVDA and MSFT. When NVDA fills its earnings gap from May 25th and MSFT fills its gap from April 26th that will likely be when something like this can play out.