S&P 500 IndexLong
4.23 Breakouts in Bubbles.
In 2022 SPX hit the 4.23 extension of the 2008 crash and went into about a year long bear move.
Now we're trading back above that and around where I'd think max reasonable tolerance for a 4.23 false breakout would be.
Major 4.23 breakouts are historically exceptional events. In this post I'll show you examples of what happened on breaks of them.
Let's first look at the evidence for these fibs having been useful before for the SPX rally. We'll look and see if they have reactions that would seem "Beyond chance" and if they do, then it's reasonable to think the 4.23 decision will be important too, right? And if not, then no. But obviously we'd not have a post if not.
Quite useful. Not perfect, certainly very useful. Being aware of big decisions at or around these levels helped a lot.
The 4.23 reaction here was very shallow. 4.23's are prone to much deeper corrections and this would be a big risk if we're inside of a false breakout of the 4.23. But if we're actually breaking it, something wild usually happens above the 4.23.
Here's the fibs from the Black Monday move.
The breakout above it would go on to be known as the dotcom and housing bubbles and the GFC crash would end on the 4.23 retest.
Interesting, right?
That was around 1996 and that happened to be the same time Nasdaq broke the 4.23.
This happened after the Nasdaq break.
A headliner stock of the Nasdaq bubble was CSCO. That had a couple big reactions to fibs on the way up and broke the 4.23.
And this happened.
Remember that time GME went up 100% in a day?
That was on the 4.23 break.
Then it hyper boomed and mean reverted. As with the other examples.
This is a fun one. It's off topic on the bull stuff but we'll be quick. Remember that time some oil contracts negative?
4.23 breaks usually look something like this.
The red trend feeling extremely strong at the time but being tame relative to the blue trend.
This part of the move will have some crash pullbacks in it but feature exceptional bullish engulfing candles.
All of that stuff almost invariably ends up in a bust, but it's a lot of fun at the time.
Now we're trading back above that and around where I'd think max reasonable tolerance for a 4.23 false breakout would be.
Major 4.23 breakouts are historically exceptional events. In this post I'll show you examples of what happened on breaks of them.
Let's first look at the evidence for these fibs having been useful before for the SPX rally. We'll look and see if they have reactions that would seem "Beyond chance" and if they do, then it's reasonable to think the 4.23 decision will be important too, right? And if not, then no. But obviously we'd not have a post if not.
Quite useful. Not perfect, certainly very useful. Being aware of big decisions at or around these levels helped a lot.
The 4.23 reaction here was very shallow. 4.23's are prone to much deeper corrections and this would be a big risk if we're inside of a false breakout of the 4.23. But if we're actually breaking it, something wild usually happens above the 4.23.
Here's the fibs from the Black Monday move.
The breakout above it would go on to be known as the dotcom and housing bubbles and the GFC crash would end on the 4.23 retest.
Interesting, right?
That was around 1996 and that happened to be the same time Nasdaq broke the 4.23.
This happened after the Nasdaq break.
A headliner stock of the Nasdaq bubble was CSCO. That had a couple big reactions to fibs on the way up and broke the 4.23.
And this happened.
Remember that time GME went up 100% in a day?
That was on the 4.23 break.
Then it hyper boomed and mean reverted. As with the other examples.
This is a fun one. It's off topic on the bull stuff but we'll be quick. Remember that time some oil contracts negative?
4.23 breaks usually look something like this.
The red trend feeling extremely strong at the time but being tame relative to the blue trend.
This part of the move will have some crash pullbacks in it but feature exceptional bullish engulfing candles.
All of that stuff almost invariably ends up in a bust, but it's a lot of fun at the time.
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