There are several similarities in the recent dip and the subsequent recovery to the one in Q3, 2007. Top to bottom are presented:
1.- The S&P500, which has achieved a marginal new high after the dip.
2.- The VIX going above 30 for the first time in years, and never going back to the previous complacent levels even on a new all-time high.
3.- Notice how the last dip took S&P500 below lower Bollinger Band for the first time in years.
4.- Number of stocks above 200-day average (MMTH) below 30% for the first time in years. And then failing to regain fortitude when the index is making new highs. Most stocks are already in a bear market.
and 5.- A descending resistance trendline in RSI. While in the weekly chart it seems to still have room to the upside, last Friday ended on a perfect hit in the daily chart. This backs the idea that the drop will start sooner rather than later.
1.- The S&P500, which has achieved a marginal new high after the dip.
2.- The VIX going above 30 for the first time in years, and never going back to the previous complacent levels even on a new all-time high.
3.- Notice how the last dip took S&P500 below lower Bollinger Band for the first time in years.
4.- Number of stocks above 200-day average (MMTH) below 30% for the first time in years. And then failing to regain fortitude when the index is making new highs. Most stocks are already in a bear market.
and 5.- A descending resistance trendline in RSI. While in the weekly chart it seems to still have room to the upside, last Friday ended on a perfect hit in the daily chart. This backs the idea that the drop will start sooner rather than later.