S&P 500 IndexShort
Why the Biggest Crash Is Nearing (Beyond Fundamentals) - Part 2
The SPX (SNP500 Index) monthly chart has been giving clear signals in the past with regard to overall changes in trend. With all of those trends taken into consideration, we can see an extremely similar situation with the current price action. As we also take into account for current political, geopolitical, COVID-19, and tech stock inflation factors, we can assume that no rally is sustainable without a correction. Keep in mind, this is only an observation by using the simple bearish and bullish divergences. A bearish divergence occurs when the price action by candles, shows a higher high, while the oscillator for the RSI shows a lower high - indicating that price momentum has died off. I also show in the chart that it's possible to identify key points when the market is showing demand for the stock market even if it's in a downtrend, where the general public might assume the major crash is coming - this is a bullish divergence
- The 2008 recession was signaled by a clear bearish divergence on the weekly, and even the monthly. This took months to play out, but with each rise, you could have bought in and still profited with a high average. Following the financial crisis, the 2009 bottom and reversal into a 9 year bull market was signaled by a strong bullish divergence on the weekly.
- When many thought the market was crashing in early 2016, a strong bullish divergence showed that selling momentum was done and that a bullish continuation would resume. This was due to the confirmation of a bullish divergence on the price action. It meant that there was CLEAR demand for cheaper prices.
Current Sentiment shows that a large bearish divergence on the monthly chart is forming and we may be in a bear market until proven otherwise.
- The 2008 recession was signaled by a clear bearish divergence on the weekly, and even the monthly. This took months to play out, but with each rise, you could have bought in and still profited with a high average. Following the financial crisis, the 2009 bottom and reversal into a 9 year bull market was signaled by a strong bullish divergence on the weekly.
- When many thought the market was crashing in early 2016, a strong bullish divergence showed that selling momentum was done and that a bullish continuation would resume. This was due to the confirmation of a bullish divergence on the price action. It meant that there was CLEAR demand for cheaper prices.
Current Sentiment shows that a large bearish divergence on the monthly chart is forming and we may be in a bear market until proven otherwise.
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