SPY at a pivotal point
Updated
Like we see from the graph the bull markets tend to last longer than the bear ones.
From '93 to '98 the s&p gained 173% over a 5 yr period, then in 1998 we have a significant crash, but it gets quickly erased and the bull market continues until the end of the millennial.
This bull market had an overall gain of 257% over a 7 year period (36% annualized).
This run will eventually take us into the dotcom bubble at the beginning of the year 2000.
The bear market has a loss of 50% over a 2.5 year period (20% annualized).
I believe the Dotcom bubble gives us a first modern look at a bear market i.e. massive selloff over an extended period of time.
The next bull market runs from 2003 to 2007, it produces a gain of 103% over a 4.5 year period (23% annualized).
The '08 financial meltdown is the first truly global crises.
The consequences are catastrophic, the S&P loses half of its value in a mere 1.5 year period (33& annualized)
The next bull market (the present one) has returned 219% from 2009 to 2015. That's a 36.5% return per year for 6 years.
As we see on the graph in 2011 we had a pullback in which the s&p lost 20% over a 6month period.
We are now 6 months in what can be called a pullback, since the six has so far lost 15.4% from its all time high.
I believe the following days will be pivotal for the market in what could possibly unleash another bear market in which the spy could go as low as 157, and it would last for at least a 1 year period. My best advise is to stay in cash for now and keep an attentive eye on the market, since a lot of opportunity may come your way soon.
In case this is just another small correction in a larger bull market, I would wait for the 200's level to show sign of support and then hop back in.
Sidenote:
I fear the bear market possibility to be more likely, since I believe the world's central banks have outdated tools that do more harm than good to the global financial markets. until a new set of policies is engineered, the markets will react poorly to the central bank actions.
From '93 to '98 the s&p gained 173% over a 5 yr period, then in 1998 we have a significant crash, but it gets quickly erased and the bull market continues until the end of the millennial.
This bull market had an overall gain of 257% over a 7 year period (36% annualized).
This run will eventually take us into the dotcom bubble at the beginning of the year 2000.
The bear market has a loss of 50% over a 2.5 year period (20% annualized).
I believe the Dotcom bubble gives us a first modern look at a bear market i.e. massive selloff over an extended period of time.
The next bull market runs from 2003 to 2007, it produces a gain of 103% over a 4.5 year period (23% annualized).
The '08 financial meltdown is the first truly global crises.
The consequences are catastrophic, the S&P loses half of its value in a mere 1.5 year period (33& annualized)
The next bull market (the present one) has returned 219% from 2009 to 2015. That's a 36.5% return per year for 6 years.
As we see on the graph in 2011 we had a pullback in which the s&p lost 20% over a 6month period.
We are now 6 months in what can be called a pullback, since the six has so far lost 15.4% from its all time high.
I believe the following days will be pivotal for the market in what could possibly unleash another bear market in which the spy could go as low as 157, and it would last for at least a 1 year period. My best advise is to stay in cash for now and keep an attentive eye on the market, since a lot of opportunity may come your way soon.
In case this is just another small correction in a larger bull market, I would wait for the 200's level to show sign of support and then hop back in.
Sidenote:
I fear the bear market possibility to be more likely, since I believe the world's central banks have outdated tools that do more harm than good to the global financial markets. until a new set of policies is engineered, the markets will react poorly to the central bank actions.
Comment
The indicators below Volume are: OBV in blue plotted with a 8day exponential moving average,
RSI
MACD
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