As a follower of TD Sequential the S & P 500 is looking ropey. There may still be some room to the upside, but it is like picking up pennies in front of a steam roller at this point. The S & P has posted multiple TD 9 daily sells and multiple TD 9 weekly sells. It is also in an extended TD 9 monthly sell. Additionally, the S & P is printing a TD 9 yearly sell for 2021. Furhermore the MACD Histogram, Momentum and Volume Weighted MACD are all signalling weekly sell indicators. Since 2018 (and excluding the COVID plunge) weekly sell indicators have resulted in an average drawdown of 8.24%. However, given the unprecidented lack of a >5% pull back in months and overly bullish leveraged longs / a clear rising wedge, I think that once the S & P breaks its weekly uptrending support it will flash crash down approximately 33% to the 61.8% and give back the gains of the last year. Potentially, given the TD 9 yearly sell this could be the top (or close to it) and signal a prolonged slow bleed for stocks for 1 to 4 years, based on low growth and reducing company profits, potentially eroding the stocks value proposition. Add to that a DXY bounce and its game over.
SPY
SPY
Comment:
The VIX is also in a falling wedge and due an explosive break out upwards.
Comment:
Bull market uptrend support has now been breached. Should only be a matter of time before it gets to / hopefully bounces off of the 61.8 Fib.
Systematic wealth creation.