S&P 500 IndexShort
Warning: Weekly Loss Exceeds 11% - The same as 2000/2001/2008
Updated
The previous 3 times this signal appeared big additional losses occurred:
From the Low of the week of the initial crash these additional losses occurred:
April 2000 to September 2001: -29.46%
September 2001 to October 2002: -18.65%
October 2008 to March 2009: -20.60%
Active & Current Factors & Possibilities that increase the probability of this crash resulting in a Bear Market:
+ The NASDAQ is the most extended above its Weekly/Monthly MAs since the top of the year 2000 Tech bubble.
+ The Ratio of Total Market Cap to US GDP set a new ATH recently (155% - 160%), it will likely mean revert to 100% or lower which will result in a massive drop in the U.S. Stock Market.
+ Some of the U.S. Bond Yields just made All time human history lows.
+ Global business activity & supply chains are in turmoil at the moment with no way of knowing when it will end.
+ The U.S. hasn't had a recession since the Global Financial Crisis. That's an unusually long period of time for an expansion.
+ Fear of a new Socialist president whipping out the bulldozers and running them over various things such as the U.S. health care system.
+ Possibility of the Federal Reserve doing a U Turn on monetary policy and engaging in massive Quantitative Tightening which would result in a devastating and long term bear market.
Profit Targets/Traders/Long term investors:
Traders & Long term investors will be buying a lot at 2,850 and at 2,650. The market will bounce a lot at these levels. Bounce failure or not will depend on global economic recovery or lack thereof. Weekly closes below these levels would be a big concern for the possibility of big additional losses (up to 25%+ like in 2000/2008). Bears will be covering & taking a lot of profits at these levels.
From the Low of the week of the initial crash these additional losses occurred:
April 2000 to September 2001: -29.46%
September 2001 to October 2002: -18.65%
October 2008 to March 2009: -20.60%
Active & Current Factors & Possibilities that increase the probability of this crash resulting in a Bear Market:
+ The NASDAQ is the most extended above its Weekly/Monthly MAs since the top of the year 2000 Tech bubble.
+ The Ratio of Total Market Cap to US GDP set a new ATH recently (155% - 160%), it will likely mean revert to 100% or lower which will result in a massive drop in the U.S. Stock Market.
+ Some of the U.S. Bond Yields just made All time human history lows.
+ Global business activity & supply chains are in turmoil at the moment with no way of knowing when it will end.
+ The U.S. hasn't had a recession since the Global Financial Crisis. That's an unusually long period of time for an expansion.
+ Fear of a new Socialist president whipping out the bulldozers and running them over various things such as the U.S. health care system.
+ Possibility of the Federal Reserve doing a U Turn on monetary policy and engaging in massive Quantitative Tightening which would result in a devastating and long term bear market.
Profit Targets/Traders/Long term investors:
Traders & Long term investors will be buying a lot at 2,850 and at 2,650. The market will bounce a lot at these levels. Bounce failure or not will depend on global economic recovery or lack thereof. Weekly closes below these levels would be a big concern for the possibility of big additional losses (up to 25%+ like in 2000/2008). Bears will be covering & taking a lot of profits at these levels.
Note
Entries for short:The bounce will probably resume to the general area of the 200 DEMA/DSMA on the S&P 500 just like in the late 2018 huge sell off. Expect a top and a continuation down at or about 3,100.
Note
Bounces which terminate at or near the resistance of the 55 Weekly EMA will likely be perfect selling opportunities. Previous perfect sells at the 55 Weekly EMA:
October 2000
January 2001
May 2001
March 2002
May 2008
As the S&P 500 is now at the major support of 2850 there will likely be a rally in march which will form a top in May, terminating at or near the 55 Weekly EMA. We can then expect the market to roll over and then make Lower Lows if the Global Recessionary conditions remain in play.
Note
Today the market confirmed the relevance of the 55 Weekly EMA which sits at 3,030 today. The market hit 3,022 and dropped 3.85% very quickly.
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