It often happens that declines are expanding wedges or some such thing, and that sets up the next rally or Bull market. It's possible I see a nascent pattern here suggesting a scenario like that developing over the next several months to a year...Now, the other possibility is that price action goes back and forth between the top, bold orange trendine on this chart and the 'derived' return trendlines shown recently on other posts (but not on this chart, and they are usually shown as dashed lines)...This would prevent the extreme swings I'm suggesting, as a possibility here...We'll just have to see whether the market chooses mild and constant volatility on the way down or increasing and ever more extreme volatility in it's descent. This latter mode was seen in the decline into the 2002-2003 lows....it has been seen before...
Also, the trendline envelope(s) I'm suggesting both preclude a 'crash'. I see nothing visually in these mild slopes (that get milder over time) that look like panic declines, but clearly wild swings between the trendlines are on the table....
Click to enlarge...
3 comments:
Hi Mark,
Nice chart. With a target of 950 or so, that seems to line up with the 4 year presidential cycle low historically in July or October.
Cheers,
Hi Hopper,
Its possible we bounce off of that lower trendline here for a while and then revisit it at a lower point then 950..I have been watching the $FTSE index over the holiday, as they have a similar wave count and setup to the $SPX...Looking for signs of the strength and duration of any bounce that might happen here...
Mark
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