When can we call the price action strategic bearish?
-> On the monthly chart it is not very useful to wait until a Kumo break. I rather chose Price/Kijun Sen (26 months average) cross to determin wether a strategic and longer term bear market can be in place. These major confirmation points I marked with red vertical lines on the chart.
How can you act earlier, what rings the bell to call attention for the end of the Bull market?
-> Price reaches a peak
-> for several MONTHS price can not reach a substantial higher high compared to the peak! It may spike a higher (several times), like it did in 2000 but it can not make a close above the Chikou SPan peak (lagging line)
-> during these several months of forced buyings market always develops serious divergences in haDelta, in EWO and in .
-> Then makes a cross. This is the point where we can say with high probability the Bull market is over! It is then followed by decrease in EWO value. Still price may deny for longer: drifting higher like in 2000, trying to reach new highs, or move sideaway a bit for 2 months and then drop sharply, but again spike back to supports, before continue lower in a strategic bear trend.
These points, where we could say Bull market ended with high probablity are marked with dashed lines.
When DID the recent Bull market end? How comes we did not have a bear market?
-> Well, as you can see the big Bull market ended in February/2015 !!! 16 months ago!
-> The we had a sharp drop, but market spiked back to almost new highs, while was drifting lower, and EWO value decreased.
-> Here comes the miracle: the next sharp drop in January-February this year brogh confirmation. Price closed below Monthly Kijun Sen and most of us were convinced strategic bear market was here. But not! Magic lifted this market back again to previous highs!
I can tell you this is the biggest denial, the most agressive and longest top building phase with the strongest negative divergences in the history of SP500 index! US market has never seen such an extreme before! Why is it so? Well, probably it is due to 7 years of "liquidity drog addiction" caused by magic central banks. Why do you think central banks are so nervous now after such a minor drop last week? They don't have tools now like they had back in 2008, and their credibility is dropping quickly.
Where are we now? What to expect? /"And now, the end is near..." (Sinatra)/
-> Market could not make a higher high and a close above 2100 for 16 months!
-> Heikin-Ashi monthly candle and haDelta signal a possible downturn ahead
-> and EWO are slowly dropping further, keeping the extreme divergence.
-> Kijun Sen (26 Months average) is close: flat line at 1972 now. Whenever market closes below 1972, the strategic bear market will roll on. There will be spikes from to time, but I doubt it can be lifted again to 2100.
Below 1972 we can see a real krach. The move can be so quick, that we have never seen before in history. Will 1700 stop selling, will 1600 stop selling, or will it collapse to 1000-1200? No one knows.
I only know, that the global market is bigger than anyone! Its force is stronger than all central banks' together. Some says don't fight the central banks. I say don't fight Mr. Global Market.
Seeing what has been going on in global economy (Brexit is just one part of the puzzle), and on global markets, I seriously do not understand why SP500 is still trading so high? But the warning signals have been here with us for almost 1,5 years!
It is still not too late to get prepared for what is possibly coming: STRATEGIC BEARMARKET