The approaching 2-day death cross
Updated
On the above a 2-day chart a 2-day death cross is approaching. That is the 2-day/50-day SMA (blue line) crossing down the 2-day/200-day SMA (red line) AND price action below the 2-day/200-day SMA. The death cross is projected to print around June 21st.
These are signals you do not want to ignore. They are fantastic opportunities. You must wait for confirmation.
Long positions to the 50-day or 200-day SMAs with the ‘great buy’ signal is an easy long position to make right now. Look left. (This is not the same indicator used in the crypto markets.) In 2008 (below) a 20% market sell off was followed by a 10% rally to resistance. Same was true in January 2001 (below) the market enjoyed a 10% rally following a 20% sell off. Short squeeze will feed this rally, it did on the last two occasions this one will be no different.
What of the future? I don’t know. Got to be patient. Is 2001 and 2008 about to be repeated in 2022? Great question. Looking left the evidence is a big fat yes. I know there’s calls for blow off tops and new market highs, can’t ignore this. At the same time the facts of the chart are very hard to ignore.
M2 money supply - see weekly charts below.
From 94 to 2001 dot.com boom M2 money supply increased around 40% with the stock market 230%. Clearly overbought euphoria, this 2-day death cross had weight to it.
From 2001 to the 2008 credit squeeze the the M2 money supply increased 90-100% with the stock market matching it. This market correction made no sense. Recovery was quick and the market went onwards and upwards.
From February 2009 to present day the M2 money supply increased 275% with the stock market 600%. Clearly overbought, but only be a factor of 2 whereas 2001 was 5 fold at least. A market correction to 2700 puts the index on par with money supply again. Isn’t that interesting? A lot higher that I was expecting to be sure.
If as seems likely a 2-day death cross prints and M2 supply remains consistent, a buy from 2700 - 2900 is golden. It is the golden ratio area after all.
If candle bodies print above the 2-day/200-day SMA then everything changes and a rally to 6000 would seem highly probable.
Let’s wait and see!
Ww
Type: trade
Risk: <=6% of portfolio
Timeframe: 1-2 months
Return: 10% minimum
February 2008 Death cross
January 2001 Death cross -44% followed
** Weekly charts **
1994 to 2001
2001 to 2008
2009 to 2022
These are signals you do not want to ignore. They are fantastic opportunities. You must wait for confirmation.
Long positions to the 50-day or 200-day SMAs with the ‘great buy’ signal is an easy long position to make right now. Look left. (This is not the same indicator used in the crypto markets.) In 2008 (below) a 20% market sell off was followed by a 10% rally to resistance. Same was true in January 2001 (below) the market enjoyed a 10% rally following a 20% sell off. Short squeeze will feed this rally, it did on the last two occasions this one will be no different.
What of the future? I don’t know. Got to be patient. Is 2001 and 2008 about to be repeated in 2022? Great question. Looking left the evidence is a big fat yes. I know there’s calls for blow off tops and new market highs, can’t ignore this. At the same time the facts of the chart are very hard to ignore.
M2 money supply - see weekly charts below.
From 94 to 2001 dot.com boom M2 money supply increased around 40% with the stock market 230%. Clearly overbought euphoria, this 2-day death cross had weight to it.
From 2001 to the 2008 credit squeeze the the M2 money supply increased 90-100% with the stock market matching it. This market correction made no sense. Recovery was quick and the market went onwards and upwards.
From February 2009 to present day the M2 money supply increased 275% with the stock market 600%. Clearly overbought, but only be a factor of 2 whereas 2001 was 5 fold at least. A market correction to 2700 puts the index on par with money supply again. Isn’t that interesting? A lot higher that I was expecting to be sure.
If as seems likely a 2-day death cross prints and M2 supply remains consistent, a buy from 2700 - 2900 is golden. It is the golden ratio area after all.
If candle bodies print above the 2-day/200-day SMA then everything changes and a rally to 6000 would seem highly probable.
Let’s wait and see!
Ww
Type: trade
Risk: <=6% of portfolio
Timeframe: 1-2 months
Return: 10% minimum
February 2008 Death cross
January 2001 Death cross -44% followed
** Weekly charts **
1994 to 2001
2001 to 2008
2009 to 2022
Trade active
Note
6% up. A lot of shorts got squeezed today. Going 'short' after 8 weeks in downtrend was stupid.4210, that's the only number that matters now. Why? It will confirm the bear market death cross. Should price action remain under, 2-day/200-day SMA (red line) the sell off will resume.
There is strong evidence however resistance will not hold. Why?
1) This week is closing with a monster bullish engulfing candle following eight weekly red candles.
2) Look left. Every time the weekly death cross printed (21-week EMA - yellow line and 50-week EMA - green line) that was also in matched with the 2-day death cross, the index ripped higher.
Everyone is expecting 'recession' and it will come, but look left folks. This is a very bullish weekly chart.
Note
If you watch nothing else but the annual moving average (green lines) without trading days, it is fascinating. Price action bounces from the MA following a buy signal on the 2-day.Note
Thanks to sashakusak for bringing this to my attention!On the monthly chart a ‘morning star’ candle has printed on past resistance. Should the month of June print a green candle then the reversal is confirmed. Upon confirmation the index will rally to just over 6000. When that happens, get your bear on.
Note
Nice inverse head and shoulders printing at the moment. However the more interesting development is the tightening mouth of the Bollinger Band. The more focused it becomes the stronger the move that follows.Note
Best buy from 4050 to 4060.Trade closed: target reached
Boom. Up 8% since the cross printed! The 2-day chart below is looking very energetic, lots of momentum.If price action recovers the 2-day / 50-day SMA, the bear market is and Puts will get rekt. This is no time to be short.
Note
How amazing was the 2-day death cross at timing the bottom?Something important is now happening, price action is moving above the 2-day / 200-day moving average. Why is it important? IF price action closes above the 2-day/200-day MA by August 17th... IF, the market is going to go crazy upward.
Don't take my word for it, look left, look left at every previous time this has happened..
BTC
bc1q2eckdzh0q8vsd7swcc8et6ze7s99khhxyl7zwy
Weblink: patreon.com/withoutworries
Allow 3-6 months on ideas. Not investment advice. DYOR
bc1q2eckdzh0q8vsd7swcc8et6ze7s99khhxyl7zwy
Weblink: patreon.com/withoutworries
Allow 3-6 months on ideas. Not investment advice. DYOR
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