Spot the Bear. Weekly chart analysis of S&P500
- Thread starter romik
- Start date
Monthly INDU chart. Typical bounce of a key zone into 20MMA. Quite a few traders are on the other side of my trade, which I am not excited about, yet I have to follow my technical method. Obviously we are still in a confirmed bull market that presents bearish indications, which are contrarian to the predominant trend. IMHO this bounce is to be sold into.
I will have to accept that the next couple of months there will be more heat to be experienced if one's holding a short. I do not expect though the ATHs to be reached, most likely outcome is that price will start failing after hovering some time over key averages. MONTHLY CHART IS AS BEARISH AS THEY GET PRIOR TO BEAR MARKET BEING OFFICIALLY RECOGNISED.
This kind of analysis is largely a waste of time; the crash of 2008/2009 was severely overdone, so the 215% is somewhat irrelevant. If one wants to compare exact time periods, today's US markets are very similar in nature to US markets in the early fall of 2011 and the Nasdaq at the end of 1997. One might note that in both cases, markets continued to go up afterwards. The Nasdaq went straight up for two years AFTER 1997, establishing a real bubble in tech stocks. In 2011, markets defied the bears on strong earnings reports, trending up for 3 more years. Strong bears decreed valuations too high in 2011, never mind 2014.
What I am saying is in each case, fundamentals and events will decide on future direction not what charts looked like at carefully chosen years in the past.
Let's not forget sentiment effect on both fundamentals and technicals and sentiment can flip very quickly nowadays.
One more chart, this is again monthly chart of S&P500 this time, clear divergence between MFI and price (MFI of course isn't just based on price performance, but volume as well). MACD histogram is negative to the extent that will not instill confidence, quite the opposite (bearish sentiment). And of course multi-year trend line has been violated on strong volume.
I believe my outlook to have strong technical validity, as this is a macro chart and all fundamentals are reflected in price performance on this time frame.
The only index that has so far prevented from downside acceleration is NDX, which is above it's 20MMA. Once it breaks it and the key zone that I monitor on all other indexes it would take months to get indexes back to ATH.
I believe my outlook to have strong technical validity, as this is a macro chart and all fundamentals are reflected in price performance on this time frame.
The only index that has so far prevented from downside acceleration is NDX, which is above it's 20MMA. Once it breaks it and the key zone that I monitor on all other indexes it would take months to get indexes back to ATH.
This chart is NYSE composite, posting a daily chart just to display where this bounce is heading. This is a major bounce, no doubts about that. But due to bearishness of the monthly chart, I still view this as a bounce, rather than a reversal, even though the strength of the bounce has bulls convinced that this is resurrection of the predominant uptrend. Time will tell. As long as monthly chart remains bearish from a contrarian perspective I favour the odds of resistance coming into play very soon. Let's think about it sensibly, why has it all of the sudden become 'risk off'? There is nothing that the FED has said that indicates anything of substance, maybe we will, maybe we won't. So the markets will 'force' the decisiveness out of the FED, but IMO equity markets have to fall substantially more. This is my firm belief.
