SPX (Now) vs. NDX (Dot.com Bubble)
Updated
Monthly charting similarities between the SPX, at months end, April 2022 vs. the NDX during the dot.com bubble burst.
All time high price-check
Monthly gap/s created after the break out from the 4-5 year trend line-check (purple line)
Monthly closing below the horizontal support to make it look like a confirmed H&S pattern on the monthly-check (orange line)
Closing the monthly below the Tenkan Sen line (Month 1) and then immediately closing back above it (Month 2) and then closing back below it (Month 3)-check
What to expect from the SPX during the month of May:
1. It should produce a very green bullish monthly candle (Month 4)
2. It cannot touch the purple trend line (This line is roughly 3960, give or take)
3. It should close at, a little above or a little below 4646 (This is 50% of the body of the candle that burst the bubble...January 2022 for SPX)
No two charts are perfectly identical and these might just be coincidences...only time will tell but it sure feels like a tug-o-war is happening between the bulls and the bears each month until one of them looses the battle.
At the end of 2022 will the bears be proclaiming the same message the bulls have been proclaiming since Covid began: Don't Fight the Fed!
If you can't tell, I'll be bullish in May (with a SL below my purple trend line) and will then re-assess the monthly chart upon May's closing.
All time high price-check
Monthly gap/s created after the break out from the 4-5 year trend line-check (purple line)
Monthly closing below the horizontal support to make it look like a confirmed H&S pattern on the monthly-check (orange line)
Closing the monthly below the Tenkan Sen line (Month 1) and then immediately closing back above it (Month 2) and then closing back below it (Month 3)-check
What to expect from the SPX during the month of May:
1. It should produce a very green bullish monthly candle (Month 4)
2. It cannot touch the purple trend line (This line is roughly 3960, give or take)
3. It should close at, a little above or a little below 4646 (This is 50% of the body of the candle that burst the bubble...January 2022 for SPX)
No two charts are perfectly identical and these might just be coincidences...only time will tell but it sure feels like a tug-o-war is happening between the bulls and the bears each month until one of them looses the battle.
At the end of 2022 will the bears be proclaiming the same message the bulls have been proclaiming since Covid began: Don't Fight the Fed!
If you can't tell, I'll be bullish in May (with a SL below my purple trend line) and will then re-assess the monthly chart upon May's closing.
Comment
IMO I believe the top is in for SPX and we have entered a bear market however I still believe in my bull thesis for the month of May as long as my "What to expect in May" is respected. Just above is my overall chart for the SPX on the monthly, since I believe we have reached a top we can begin to watch the important FIB levels on the way down. The .786 re-tracement is 3930.11 is the next level of support which should be defended by the bulls (unless a nasty blackswan event occurs) this level is also support by the 2009 LT non-horizontal trend line which will also provide support. My SL on this idea is 3875 and I will be adding to this trade this week. We could see a flush of the lows, a gap fill and then rocket through the rest of May.
Comment
We are trading back in the wedge that we broke out of in mid-March. We are either going to break below the wedge in which case we head to 3200 or we will break back above it and head to 4700. Right now we can range between 4080-3900 until we break
Comment
I was a bullish hopeful at the start of the week...I was thinking we would fill the 4K gap on the ES and then just go. Instead we spent 4 days closing below this figure. Yes, we closed the week above it and kept the lagging span just above the cloud but IMO after viewing all the charts (YM, RTY & NQ) I don't think the retracements will amount to much. We might be able to get to 4300-4400 on the ES but IMO I think that will be about it unless the macro/Fed changes course.Comment
We never even hit 4300....could only retrace to a .382 of the last down move. We've now closed two days below 20%. Not a good sign at all...
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