Increased spending, debt, , and uncertainty are getting out of hand as well as political instability and international tensions during a pandemic and a recession. We may never see a crash like 'Black Tuesday' again since strict regulations were implemented, but chart Indicators are showing high weakness at levels not seen in the last 27 years or more.
When in doubt, zoom out.
In recent months SPY has been in a sideways price trend traveling between strong levels of . This consolidation trend may be getting ready to decide the next trend direction. This action is occurring above the channel which may appear as a false breakout that would send it back down within the channel. Even if the price decides to instead raise, the price will eventually have to return back within the channel. Expect in the long-term.
However it could take months or years before a reversal in the price trend occurs. This outlook has a significant impact for long-term traders. The increased uncertainty and risks could send investors to other Investment vehicles, further weakening the market.
A closer look
Zoom in to see the current ascending wedged that we have been in since entering the pandemic in 2020. Ascending indicate continuations or reversals of the trend. Based on the relatively small size of the , it will likely be a similar sized measured move in either direction. If a catalyst appears with high market weakness it could trigger a panic selloff. Expect in the short to mid-term.
The charted data shown above dating back to 1994 is adjusted to follow the channel of the 100 year market data. TradingView will only display data to 1994. I'm unable to link the 100 year price chart, but it will show the channel aligning near the same points.
Scale Price Chart Only - On
Logarithmic - On
This isn't absolutely accurate, but it shows obvious warning signs to help make better trading decisions.
From my understanding, log charts are typically more fitting for long term data. Turning off log data shows more of a channel on this 27 year chart, not less.