My theory is, in order to find a bottom in this bear market, we must reach an area of support that has never been tested before.
I'm using the high timeframe of 12M on SPX for example. How I determine a pivot low (or support) is a 3-candle pattern. The middle candle being lower than the one before and after it is the pivot low. (green lines)
Every time a candle falls down through a pivot low that has not been touched, you will see the 'Untested Low' buy signal on the open of the next candle. If you were to buy on the candle of the signal, it will either be the next pivot low or the candle after it, meaning this would be a profitable buy! You can even go down to lower timeframe to confirm entry with the same strategy.
This untested low signal is what I will be looking for to indicate a long term buying entry in this current market.
** LINES AND SIGNALS CREATED BY THE HAZEL HERITAGE STRATEGY **
Comment
⋅
The drawdown of the market in 2000 and 2008 both were around 50%. If you calculate 50% from the high of 2021, it is right around the areas of support that I mentioned!