SPY - Double Top Bull Trap and Rejection to Lower Low
The market is approaching resistance. I expect for the local high to be broken in order to suck in the remaining balls, and then we may see the most violent multi-year downtrend move we've seen in our lifetime. Historically, when interest rates are cut after a period of tightening, the market will completely fall apart a la 1929. Obviously, this kind of crash would occur in slow-motion in some senses, so, the most painful situation of all really - a multi-year downtrend.
There is far too much enthusiasm and bullishness right now which is concerning. The aggressive nature of this last bull push from the lows has been violent which is characteristic of a 'bull trap' in an overall bear market rally.
Until we break the 2021 local high, we are still in a larger 'bear trend' and we have to expect there is, at least, a 50% chance we reject the 2021 high.
It seems that nobody is really prepared for that, and we have retail piling back into equities as if 'the recession is over' and that we will ride off into the sunset due to 'lowering of interest rates'.
Tomorrow could also be a massive let-down if Powell signifies anything other than 'rate loosening'.
There is far too much enthusiasm and bullishness right now which is concerning. The aggressive nature of this last bull push from the lows has been violent which is characteristic of a 'bull trap' in an overall bear market rally.
Until we break the 2021 local high, we are still in a larger 'bear trend' and we have to expect there is, at least, a 50% chance we reject the 2021 high.
It seems that nobody is really prepared for that, and we have retail piling back into equities as if 'the recession is over' and that we will ride off into the sunset due to 'lowering of interest rates'.
Tomorrow could also be a massive let-down if Powell signifies anything other than 'rate loosening'.