A Troublesome Outlook for Stocks
SPY on 1 Month. In the last 12 Years we have seen 8+ Corrections Occur after a Doji Candle has formed on the One Month Chart. According to Investopedia "A doji candlestick forms when a security's open and close are virtually equal for the given time period and generally signals a reversal pattern for technical analysts." I have pin pointed 12 moments in the past 12 years where these candle formations have lead to a correction. (Not all Doji candles are perfect, the main detail I am looking for is an Open and Close that are virtually equal) All percentages were tallied at close of each month not wick.
October, 2007
% Lost: 53%
On October, 2007 a Green Doji Candle Formed, after that candle formed a green candle didn't form for the next 5 months, and the market fell over 50% for the next year and a 1/2.
April, 2010
% Lost: 16%
On April, 2010 a Green Doji Candle Formed, over the next 2 months the market saw a major correction of 16%. Now what is different about this correction compared to the 2008 crash is that volume was below the average at least 3 months prior. AVG 5.7B, ACT 3.9B. Now this is a trend we will see prior to the corrections in the future.
April, 2011
% Lost: 18%
On April, 2011 a Red Doji Candle formed, over the next 4 months the market fell 18%. The Volume 3 months prior was below the average, AVG 4B, ACT 2B. A new trend that we will see from here on out is that the bottom occurs around the 55 EMA line.
April, 2012
% Lost: 9%
April 20, 2012 a Red Doji Candle formed, over the next month the market fell 9% right around to the 55 EMA. The Volume 3 months prior was AVG 4.2, ACT 3B. Below Average.
April, May, July, 2015
%Lost: 10%
These 3 months each had a Green Doji candle leading up to a market correction of 10%. Which Lasted 7 Months, and two wicks ended around the 55 EMA. The volume was below the average at AVG 2.3B, ACT 1.9B.
September, 2018
% Lost 15%
On September, 2018 a Green Doji formed, for the next 4 months after the market fell 15%, and a wick landed right around the 55 EMA. The Volume 3 Months before was AVG 1.6B, ACT 1.3B.
January, 2020
% Lost 23%
On January 2020 a Red Doji formed, over the next 3 months the market fell 23%, and closed on the 55 EMA. At its peak the market fell 33%. 3 Months prior the Volume was below average Rectangle
Future Outlook:
The Last Two Months have been shaping up like the 7 corrections previously stated. 4 out of the last 5 months have been below average AVG 1.8B, ACT 1B. with TWO GREEN DOJI CANDLES FORMING. Not to mention the Market going up 40% in the last 15 month, Rates Expected to raise soon, Inflation expectations increased drastically, the Fed Artificially Stimulating the market (possibly easing up soon), 6 Trillion+ being printed in one year (possible 3 trillion more soon) Things are not looking good for the stock market. We all need to face the fact that a stock market crash/correction is coming.
The average of the last 7 Doji Corrections is 14%. If The SPY drops 14% it will go to $360.
The Last 6 Corrections have ended on or near the 55 EMA. if the SPY falls that far, it will fall around 28% to $303.
Only time will be able to tell what happens next, but things are not looking good. What do you think.
October, 2007
% Lost: 53%
On October, 2007 a Green Doji Candle Formed, after that candle formed a green candle didn't form for the next 5 months, and the market fell over 50% for the next year and a 1/2.
April, 2010
% Lost: 16%
On April, 2010 a Green Doji Candle Formed, over the next 2 months the market saw a major correction of 16%. Now what is different about this correction compared to the 2008 crash is that volume was below the average at least 3 months prior. AVG 5.7B, ACT 3.9B. Now this is a trend we will see prior to the corrections in the future.
April, 2011
% Lost: 18%
On April, 2011 a Red Doji Candle formed, over the next 4 months the market fell 18%. The Volume 3 months prior was below the average, AVG 4B, ACT 2B. A new trend that we will see from here on out is that the bottom occurs around the 55 EMA line.
April, 2012
% Lost: 9%
April 20, 2012 a Red Doji Candle formed, over the next month the market fell 9% right around to the 55 EMA. The Volume 3 months prior was AVG 4.2, ACT 3B. Below Average.
April, May, July, 2015
%Lost: 10%
These 3 months each had a Green Doji candle leading up to a market correction of 10%. Which Lasted 7 Months, and two wicks ended around the 55 EMA. The volume was below the average at AVG 2.3B, ACT 1.9B.
September, 2018
% Lost 15%
On September, 2018 a Green Doji formed, for the next 4 months after the market fell 15%, and a wick landed right around the 55 EMA. The Volume 3 Months before was AVG 1.6B, ACT 1.3B.
January, 2020
% Lost 23%
On January 2020 a Red Doji formed, over the next 3 months the market fell 23%, and closed on the 55 EMA. At its peak the market fell 33%. 3 Months prior the Volume was below average Rectangle
Future Outlook:
The Last Two Months have been shaping up like the 7 corrections previously stated. 4 out of the last 5 months have been below average AVG 1.8B, ACT 1B. with TWO GREEN DOJI CANDLES FORMING. Not to mention the Market going up 40% in the last 15 month, Rates Expected to raise soon, Inflation expectations increased drastically, the Fed Artificially Stimulating the market (possibly easing up soon), 6 Trillion+ being printed in one year (possible 3 trillion more soon) Things are not looking good for the stock market. We all need to face the fact that a stock market crash/correction is coming.
The average of the last 7 Doji Corrections is 14%. If The SPY drops 14% it will go to $360.
The Last 6 Corrections have ended on or near the 55 EMA. if the SPY falls that far, it will fall around 28% to $303.
Only time will be able to tell what happens next, but things are not looking good. What do you think.
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.