SPX 500 : Correlation between stocks above EMA 200 and US500Just found this idea pretty interesting.
If Avarage of stocks Above EMA 200 falls under about 55/60% usually we have a great SP500 correction.
As always mostly of stocks are susceptible by some type of crisis : Real Estate Crisis, Governament Crisis, War Crisis, Epidemic Crisis.
Quite notable is the rebound to normality, it tooks about 2 periods (vertical bars) or 2.7years.
It start with a Big Drop on average of Stocks above EMA 200 and culminate with another BigDrop quite of the same entity.
SOME CONSIDERATION OVER AVARAGE STOCKS ABOVE 200
Another thing that can be take in consideration is the "average of average of Stock Above 200".
If we stay inside the 50-70% all seems to be quite stable, with a linear growth.
If we are above 70% there is imotivate FOMO, really risky. (Didn't you find quite impossible that 90% of stocks are performing great?? How much it will last?)
If we are below 50%-40% you should consider a SHORT POSITION almost everywhere. And if this happen, maybe, it will retouch the Crisis Starting point...than we can consider Crisis Period finished (maybe).
WHERE WE ARE NOW? WHAT WILL HAPPEN?
Seems we have quite surpassed the first period and so we officially enter in 2nd period.
Things that we must highlight
We are touching 50%, so we have 50% for a last rebound jump in 70% area (unlikely) and 50% for a BIG BIG DUMP
First period is just terminated. What will be in next period? Maybe a small rebounce until spring - fall 2022?
Will Sp500 keep his price or our direction is for 3200-2700$ on late December 2021?
LAST CONSIDERATION
Tapering, money printing, yield, Fomo, Fud, Oil Prices, Hurricanes, Epidemic disease, shortage problems : all those factor are contributing to a big volatily and uncertain.
This week could be crucial to stabilize prices, invert direction... but could be only a correction before the big correction.
Don't become emotional, calculate risk, be calm. Opportunity are always there like a treasure.
