AROD01

S&P 500 Recovering from Correction

SP:SPX   S&P 500 Index
I am not licensed or certified by any individual or institution to give financial advice. I am not a professional Stock trader.

The S&P 500 has been in a Correction since February 2018. Some of you are worried about Corrections and Retracements and Down Markets. Don't be. They are a normal part of a Market life cycle. According to the Motley Fool, at fool.com, "Cumulatively, the S&P 500 has spent 7,040 days declining in correction since 1950. Given that there have been 36 corrections, the average correction time is about 196 calendar days over the past 68 years." A quick calculation (not meant to be pin point accurate, just a ball park figure) makes 196 days roughly 6.5 (six and a half) months. If the Correction started in February, that gives us roughly to August or September (again, ballpark figure) until the Market goes back to being a Bull. My theory is the Recovery has already started. The purple lines I've drawn (solid horizontal lines at top and in middle of the chart) show the Correction range (a Correction is typically calculated to be around 10%). The red line (horizontal solid line at very bottom of chart) is the range of a Bear Market, or roughly 20% down from the high. Yes, you read correctly, we are not in a Bear Market. We have not been in a Bear Market. We have been in a Correction; but I think that's about to change. The orange lines show an up-trend in the S&P starting in early April. Now, I could be wrong; the Market could turn and show me I have no idea what I'm talking about (which is completely possible, read my disclaimer at the top). However, If nothing changes, this could be the Recovery period. Don't run out and start spending Bullish just yet; this is an Up-Trend with pretty defined support and resistance lines which means the Market will still go down.

If you see the Market going down; or hear, see, or read about it on your preferred media outlet--don't panic. Look at the trend lines and see if it still following them. If the S&P remains between the Support and Resistance up-trend lines the Recovery is still going smoothly, albeit slowly. One last hurdle it has to jump before starting to run with the Bulls again is that dotted blue line at around 2800ish. That marks a Resistant Line from March 12-13, 2018. That is third base. Once it rounds that corner it is heading home; but in order for it to avoid getting tagged out, and to cross the plate and score, it needs to breach the high from January 26, 2018 which sits around 2872. I do think this Correction will be over by the Fall of this year, but that hypothesis is centered entirely on the S&P maintaining the Up-Trend or going entirely Bullish in some other way. If the S&P breaks the Up-Trend Support, then forget almost everything you just read.

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Great analysis! Most impressive! I'll bet that you're close to being spot on...
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@SBBS, Nothing seems to be going completely to Resistance or Support right now. I've drawn lines on several stocks and indexes that seem to be just hugging one line or another and not completing the circuit. Overall that's not a bad thing, unless your play depends on it :) and I think actually points to and adds weight to the theory the Market is regaining its strength
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I totally Agree. And as such I am going to invest every penny I have including a 3rd mortgage. I hope you're 100% right!

JK!

Still looks pretty sound.
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AROD01 ByteStocker67
@ByteStocker67, Ok, I'll admit it. I bit. :) You had me worried for a minute. :)
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