**Disclaimer** I don't believe we'll have a bearish market, but am anticipating a broader market correction. This chart is only an idea, it is not a cheat code, so please don't panic and sell off everything 😉
What I'm looking at in the SPY chart as possible risk emerging:
1. Megaphone: From the 2018 correction we have formed a megaphone pattern. Generally, if SPY was unable to break the top of the pattern we could've expected more risk. But SPY broke upward in Nov 2020 and doesn't want to return-- in my opinion, staying 4 months outside the pattern invalidates the risk of a crash.
2. 270 Days before the big one: from time cycles there seems to be a 1st leg down around 270 days before the big drop. This appears to be the September 2020 correction as the first leg, while the time cycles (purple circles at the bottom) when aligned between the 2018 and 2020 crashes, puts our next risky zone around June 2021. This June period also is 270 days after September leg down.
3. $370 support. Personally, I think we're in the clear for now until May / June based on the chart and market sentiment. In the mean time we need SPY at newer highs -- why? Because the further above the megaphone it is, the more the probability that the correction will stay outside the megaphone. I would expect the correction to find support at the 370$ range.
Would love to hear thoughts of other traders -- what has been your strategy for 2021, and what pressure do you see coming in?
Good luck traders!
What I'm looking at in the SPY chart as possible risk emerging:
1. Megaphone: From the 2018 correction we have formed a megaphone pattern. Generally, if SPY was unable to break the top of the pattern we could've expected more risk. But SPY broke upward in Nov 2020 and doesn't want to return-- in my opinion, staying 4 months outside the pattern invalidates the risk of a crash.
2. 270 Days before the big one: from time cycles there seems to be a 1st leg down around 270 days before the big drop. This appears to be the September 2020 correction as the first leg, while the time cycles (purple circles at the bottom) when aligned between the 2018 and 2020 crashes, puts our next risky zone around June 2021. This June period also is 270 days after September leg down.
3. $370 support. Personally, I think we're in the clear for now until May / June based on the chart and market sentiment. In the mean time we need SPY at newer highs -- why? Because the further above the megaphone it is, the more the probability that the correction will stay outside the megaphone. I would expect the correction to find support at the 370$ range.
Would love to hear thoughts of other traders -- what has been your strategy for 2021, and what pressure do you see coming in?
Good luck traders!