S&P 500, Daily, 2008 Analogy - before the worst?I have been considering the 2008 analogy for some time. I tried to find an important price resistance and I found it. In 2008, the worst drops started at 1313 and it was a fibo retracement of about 47,5%. Today, a similarly important level, in my opinion, is the retracement of 3939, which is also about 47,5% fibo. Of course, I don't expect a perfect rebound of the price from that point, as it was with 1313 in 2008. It is also important to look at the VIX index (related idea linked) and the lower time frame structure (by the analogy, there should be no big drops, but confirmation in the medium and short-term structure - 1H/15m). If the swing low is broken, I will be looking at the momentum in order to predict the bottom. Personally, I think the March 2020 low will be broken. In 2008, we also had a break of the bear market low after the dotcom bubble.
Of such fundamental matters that indicate the further course of the bear market, I can include, for example:
- inverted yield curves ,
- a huge divergence between T10Y2Y and T10Y3M before the curve is inverted,
- a divergence between Real and Nominal Disposable Personal Income (Nominal is rising, Real is in decline),
- a divergence between Advance Retail Sales: Retail Trade (is rising) and Advance Real Retail and Food Services Sales (in decline) since March 2021,
- the recessionary PMI.
And that is all I wanted to convey to you.
Not investment advice, only my own opinion.
