Based on comparing the recent market corrections, there is a clear pattern of an increasing megaphone with each successive market drop being 1.74% (more or less 1.68) of the previous one. Based on this, I project three scenarios:
Scenario 1: Market tops at today's levels (SPY 368) and corrects 62% to SPY 144, which is 1.618 of the March 2020 correction (listed as -0.618 on the chart).
Scenario 2: Market tops at 3.618 of Great Financial Crisis (GFC) and corrects 62% to GFC all-time high.
Scenario 3: Market tops at SPY 413, which is 1.68 retracement of the March 2020 correction, and a fall of 62%, which is the previous highs of both the Dot Com bubble and GFC.
I believe Scenario 3 is the most likely.
Scenario 1: Market tops at today's levels (SPY 368) and corrects 62% to SPY 144, which is 1.618 of the March 2020 correction (listed as -0.618 on the chart).
Scenario 2: Market tops at 3.618 of Great Financial Crisis (GFC) and corrects 62% to GFC all-time high.
Scenario 3: Market tops at SPY 413, which is 1.68 retracement of the March 2020 correction, and a fall of 62%, which is the previous highs of both the Dot Com bubble and GFC.
I believe Scenario 3 is the most likely.
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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.