Above is the yearly chart for SPX from inception in 1957...the last 3 yearly candles (2021, 2022 & 2023) look nothing like its past history. The red dotted lines are closing HIGHS followed by weakness year/s. Typically year 3, after a weakness year, either breaks out OR we are still in bear mode. So we are in unchartered territory right now...neither the bulls nor the bears can claim any sort of victory!
This chart shows how getting to 5,000 SPX is becoming a HUGE task for the bulls. Why oh why could they not get an SPX yearly closing above 4,800 this year ? IMO this was imperative especially given the extremely low volume this past week.
Maybe the bulls remember all too well the troubles for NDX in 2000 at 4816.35 before its crash where it took 17 years to reach 5K.
Staying nimble is the key!
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With the closing today; SPX did produce a break out . A really bullish breakout will ensure weekly closings are above the red dotted line. Closing below the red dotted line would most likely indicate near term volatility to the downside; like the 2018 breakout failure produced.
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Another example of an unsuccessful & successful breakout
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As noted above...SPX did produce an ATH break out on Friday, Jan 19th. SPX then proceeded to run up to 5K and close above it for two days. Today produced a pretty volatile move to the downside that could produce a breakout failure at the 5K level. In order for a bearish breakout failure to occur (vs. a usual pullback) you will see a continued breakdown and SPX CANNOT close above 5K on the daily. I've taken a short position at close with a stop at a closing above 5K should that happen.
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SOOOOO many gaps left open...IMO this is not a healthy move up but I will not fight price action.
Thanks for posting the chart. Yearlies. Every indicator has something to say. It takes knowledge to read it. 1981 and 1982 were recessions. This three-bar pattern (80,81,82) is the only one besides (2021,2022,2023). The market took off after the Early 1980s recession. This feels a lot like that market. Reagan's tax reductions fueled it. Not much different this time. Government fuel pushes the economy thru when it runs out of gas. When the economy is good, everyone's gas tank gets filled up again.
Vixtine
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@geowen57, The difference tho is that in 1982 the ATH from the previous years was broken in 1982. In 2023 we could not reach or break above the 2022 ATH of 4818.62. And the start to 2024 is certainly not going the way it went in 1983. Also, the closing in 1982 was visually above those dotted lines...it's visually different at the end of 2023. Lastly, I was only 5 years old in 1980 so I cannot comment on "this feels a lot like that market"...I actually don't think most traders can truly make that statement today...you'd be in your mid-late 60's to remember IMO.
bjorn2z
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"Maybe the bulls remember all too well the troubles for NDX in 2000 at 4816.35 before its crash where it took 17 years to reach 5K. "
The bulls of today? No they don't remember. I am bear today, because I remember!
I was a bull back in 2000. I remember 80% drop like it was yesterday, and I remember that 2017 was when the retrace completed convincingly. Caveat: CSCO is still below its level from 2000. Nikkei is still below its level from 1989.
Have you moved now from being conflicted to being bearish? Happy New Year!!
My 2023 EOY Allocation kicked ass today: +1% total liquid net for the first day of the New Year, despite being 94% in Cash. Allocation: Long: 94% JAAA/PULS/SGOV/TFLO/FDRXX, 6% FNGD, and Short: 21% NVDA/TSLA/ITB/WING
It takes knowledge to read it. 1981 and 1982 were recessions. This three-bar pattern (80,81,82) is the only one besides (2021,2022,2023).
The market took off after the Early 1980s recession. This feels a lot like that market.
Reagan's tax reductions fueled it. Not much different this time.
Government fuel pushes the economy thru when it runs out of gas. When the economy is good, everyone's gas tank gets filled up again.