$SPX: Meltup to $6k in 2022?? No, Meltdown: $2.7k-$3.5k
There's been a lot of people that have been conditioned to buy the dip over the last two years, because every time that's happened, it's led to higher prices. There's people making bold calls that after this "small dip" we're going to turn around and meltup to $6k. I don't buy it.
Looking at the structure of the chart, price action already looks bearish on lower timeframes but is starting to show bearish signs on higher timeframes (both the 2W and 1M timeframes). We just broke down out of this large upward channel, Heikin Ashi candles are showing a bearish trend forming on high timeframes and ichimoku is showing a wide separation of the tenkan and kijun on the monthly timeframe indicating that price needs to snap back to find a balance. 3 indications to me that price is going to move much further down.
If you were to look at historical price action on this chart, you'd see that anytime there's been a wide separation of the tenkan and kijun, price as retraced. The widest separation came before the March 2020 crash. The spread between the two lines now is far greater than during that period indicating to me that the snap back down could be a violent one.
My base case is that we fall somewhere between 20%-40% from these levels before continuing a move to the upside. I think this downside move is likely to take place this year 2022, and that we will bottom either later this year or in Q1 in next year.
I've marked out key months for pivots in price action on the chart. Will update my views if I see things change.
Looking at the structure of the chart, price action already looks bearish on lower timeframes but is starting to show bearish signs on higher timeframes (both the 2W and 1M timeframes). We just broke down out of this large upward channel, Heikin Ashi candles are showing a bearish trend forming on high timeframes and ichimoku is showing a wide separation of the tenkan and kijun on the monthly timeframe indicating that price needs to snap back to find a balance. 3 indications to me that price is going to move much further down.
If you were to look at historical price action on this chart, you'd see that anytime there's been a wide separation of the tenkan and kijun, price as retraced. The widest separation came before the March 2020 crash. The spread between the two lines now is far greater than during that period indicating to me that the snap back down could be a violent one.
My base case is that we fall somewhere between 20%-40% from these levels before continuing a move to the upside. I think this downside move is likely to take place this year 2022, and that we will bottom either later this year or in Q1 in next year.
I've marked out key months for pivots in price action on the chart. Will update my views if I see things change.
Comment:
First support tagged on the pivot.