It seems everyone is bearish on this market (including myself..) and for good reason. It looks like a diamond top.. or maybe even a broadening formation (i.e megaphone- that would have one more higher high just above 3000)..and with a drastic drop coming over the next couple of years.. But DO NOT dismiss other possibilities. If this is a 9 year cycle (mid) top, then where would that put an 18 year cycle top? Will we retrace massively or find a (9year)mid-cycle bottom and continue for a higher high in 2026? I think we need a deeper correction..I'm probably 70%+ leaning towards the bearish scenario of a large correction (red).. but consider that most people are wrong about where the market is going.. Where is that 18 year cycle top? Is it forming now or yet to be formed.. that's the quintillion dollar question.
Use the long term trend line for confirmation over the coming years.. and keep up with those moving averages.. sometimes the answer is written right on the chart.
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updated lower blue TL.. seems to show a touch at that low in Dec'18
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4hr chart about to print MA crossover? Might be supportive. There are other bearish crosses overhead on other timeframes that are a ceiling so we are stuck in a tight range at the moment:
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3x bear SPY.. Caution!
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Just a thought I had:
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Three possible things I'm watching for:
1. inverse h&s.. now constructing other shoulder. Volatility in range 280-260!
2. megaphone / broadening pattern: moves get larger and larger! I love these!
3. diamond top (broadening formation gets squeezed into a wedge).. most difficult to trade- have to wait longer for confirmation on trend