S&P - Will we follow 2020/2021?
The S&P has been trading in a rising pattern for over 700 days, similar to the rising pattern observed in 2020 and 2021. In that instance, the price of the S&P broke below the support trendline and lost all SMA support, while also making a lower low. This has not occurred since the start of the current pattern. Could a deeper correction follow?
Blue line = 50-day MA
Red line = 100-day MA
Yellow line = 200-day MA
Analysis of the 2020/2021 Price Action
We can conclude the following five points:
1. The rising wedge lasted for nearly 700 days.
2. The price consistently made higher highs and higher lows.
3. The S&P found support on the SMAs and never broke below the 200-day MA.
4. After approximately 700 days, the S&P broke below the rising wedge, lost all key SMA support, and made a lower low.
5. During the retest of the rising wedge and key SMAs (which had turned into resistance), a bearish cross (50-day SMA below the 100-day SMA) occurred, leading to a downtrend.
How Does the 2020/2021 Price Action Correlate to 2023/2024?
We can conclude the following five points:
1. The rising wedge lasted for approximately 750 days.
2. The price continued making higher highs and higher lows.
3. The S&P found support on the SMAs and never broke below the 200-day SMA.
4. After around 750 days, the S&P broke below the rising wedge, lost all key SMA support, and made a lower low.
5. A bearish cross between the 50-day SMA and the 100-day SMA is currently forming.
When we overlay the bar pattern of the 2021 bearish price action onto the current chart, it suggests that a revisit to 4,750 is possible. This level is both a technical support and the point where the S&P started its downtrend in 2021.
Conclusion
Will the S&P follow the 2021 price action, resulting in a sustained downtrend, or will it reclaim all lost SMA levels and continue its uptrend? The price action suggests that there is a real possibility of weakness in the coming months.
Blue line = 50-day MA
Red line = 100-day MA
Yellow line = 200-day MA
Analysis of the 2020/2021 Price Action
We can conclude the following five points:
1. The rising wedge lasted for nearly 700 days.
2. The price consistently made higher highs and higher lows.
3. The S&P found support on the SMAs and never broke below the 200-day MA.
4. After approximately 700 days, the S&P broke below the rising wedge, lost all key SMA support, and made a lower low.
5. During the retest of the rising wedge and key SMAs (which had turned into resistance), a bearish cross (50-day SMA below the 100-day SMA) occurred, leading to a downtrend.
How Does the 2020/2021 Price Action Correlate to 2023/2024?
We can conclude the following five points:
1. The rising wedge lasted for approximately 750 days.
2. The price continued making higher highs and higher lows.
3. The S&P found support on the SMAs and never broke below the 200-day SMA.
4. After around 750 days, the S&P broke below the rising wedge, lost all key SMA support, and made a lower low.
5. A bearish cross between the 50-day SMA and the 100-day SMA is currently forming.
When we overlay the bar pattern of the 2021 bearish price action onto the current chart, it suggests that a revisit to 4,750 is possible. This level is both a technical support and the point where the S&P started its downtrend in 2021.
Conclusion
Will the S&P follow the 2021 price action, resulting in a sustained downtrend, or will it reclaim all lost SMA levels and continue its uptrend? The price action suggests that there is a real possibility of weakness in the coming months.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.