It appears current times are very uncertain, easy to get lost in too many indicators
Let's take a look again at some known patterns, again 1929
Like a magnet...pushing up and down SPX with a very similar pattern even in the two recent spikes up.
Let's test the model now, which suggest a dramatic drop to 2500 area by October 20th.
Don't forget that people, under...
1929 data, matched on the first major lows (13 november 1929 on 22 march 2020), still a valid guidance.
There were some deviations (please note June also) due to short squeeze + liquidity avalanche not available in 1929.
But will all due differences, human reaction to stressful situation is very much comparable and reflected in the graph.
Recent peaks are...
Ok so market is FED up with this short squeeze
Now nosediving back to 1929 signal
Many other indicators joining the party:
1. EUR/USD from 1.2 to 1.18
2. VIX spiking up
3. CCI showing bearish divergence
4. BITCOIN crashing
5. Put Call SPX through the roof
"Is this your homework Larry!? Is this your homework?!
You see what happens....!!
You see what happens...
Bitcoin compared to SPX (good correlation) but showing divergence in the last trading sessions
Very large divergences between Bitcoin and CCI on a large period to smooth out noise show resemblance of March's dip
instability on a large scale coming
Oil price in H4
CCI with a very long lag to smooth out daily and weekly noise, see how well you spot numerous divergences on the way down and the super divergence showing the following recovery.
Now in just one days CCI is entering an area unseen since last May
Someone big is selling here --> instability coming soon
1. Vix spiking with increasing relative tops and relative bottoms
2. Put/Calls ratio going up and now around 2 (every 1 call there are 2 puts around)
Previous short squeeze, which caused innatural spike in S&P, is very well justified looking at quick covering of many shorts building up after August 11th shake
1929 is looming around the corner
See where we are...
Shaping forces of this rally ended on August 11th, in close similarity to 1929
Evidence of this:
1. Peak in VIX on August 11th
2. Bearish divergence SPX vs CCI that followed right after, reflecting on VIX (future S&P prices) rather than actual S&P prices, wich underwent a short squeeze
3. Second peak on VIX last week (and today)
Don't be fooled by the short...
Smokey insisted with this short squeeze
We are already in the reversal zona, aka the world of pain
VIX moving up
EUR USD still weak
"Has the whole world gone crazy?!
I am the only one around here who gives a shit about the rules!?!?
MARK IT ZERO!!"
Yesterday's run is obviously a short squeeze.
Major divergence between SPX and CCI
EUR/USD showing weakness
VIX still high
The squeeze is still going on as we speak and will keep going ahead but expect reversal during the day
S&P lost steam and showed instability (August 11th), lower volumes and quite some swings when approaching ATH (last 9 days)
Comparing with 1929 (by matching March 2020 low with 1929 low), the same pattern is repeating.
Now there is quite a divergence between S&P 500 and CCI (good indicator of past drops when diverging with S&P500) confirming that a first drop is...
Comparison between 1929 crash and 2020 crash by matching the respective first lows (November 13th 1929 and March 22nd 2020).
1929 and 2020 data have been normalized before superimposing the charts...therefore increase or decrease are perfectly comparable
Apparently even without FED intervention back then the reaction was very much the same on the way up...FOMO...
Two dynamic trendlines (dynamic support and resistance) are very clearly identified and crossing right at "All Time High level" right before Election time. Technical Analysis can be really amazing to reflect reality.
Need to monitor breaks of such dynamic lines to go short or long.
Keep going like this will lead to a "FED Trap" make it or break it -> S&P current...