RespectRiskManagement
Short

Scribbles of a Rounding Top SPY

AMEX:SPY   SPDR S&P 500
For fun, I decided to draw in -- scribble -- some rounding top and rounding bottom formations in the SPY             over the last few market cycles. The reason why I give any credibility at all to the pattern formations is that it provides the psychological sentiment of the market -- that the bullish euphoria is coming to an end, that the bullish strength is weakening. I feel that the symmetry of the red parabolas provide the resistance and support areas for the price action.

If this price moves like the past, expect a few months of red to go down to around 175-180 before moving sideways to touch the end of the parabola. Afterwards, like the past (specifically 2000), expect massive collapses.
You are not alone. I had this idea since early or at least the middle of October 2015 and decided to post it last week before the Paris attack sadly happened. After publishing my idea I came by incidence via Twitter across a blog post from early November with the same idea:

http://davidstockmanscontracorner.com/mind-the-spx-arch-potential-for-a-25-plunge-ahead/





But if the market actually rallies through this very bearish scenario that would be super-bullish. That would require a lot of new sudden and sustaining strength in the market though, which appears unlikely given that overall earnings in the US are falling each quarter this year and a Fed rate hike in the past always created a downtrend in the first 3 months after each rate hike.
Reply
ChartArt ChartArt
Usually a bull market ends when bulls are exhausted buying, that's why I still have the idea that a new yearly high can happen before the middle December meeting of the Fed. Which would be a safer longer-time-horizon short location to try than right now somewhere in indecision land.
Reply
United States
United Kingdom
India
Deutschland
France
España
Italia
Polska
Türkiye
Россия
Brasil
Indonesia
Malaysia
ประเทศไทย
Việt Nam
日本
한국
简体
繁體
Home Stock Screener Forex Signal Finder Cryptocurrency Signal Finder Economic Calendar How It Works Chart Features House Rules Moderators Website & Broker Solutions Widgets Stock Charting Library Feature Request Blog & News FAQ Help & Wiki Twitter
Profile Profile Settings Account and Billing My Support Tickets Priority Support Contact Support Ideas Published Followers Following Private Messages Chat Sign Out