S&P500 Historic Channel Top or Breakout?

14 de mar. de 2021

As you can see this is a channel valid since 1934, only broken by the overvaluation beforte the great depression and the Dot Com Bubble. As we are by now at the top end of the channel or even a little bit above we will face the decision between exuberant overvaluation as in the DotCom Bubble and before 1930 or correct for a reasonable amount back into the channel, if not even go to the bottom of the, also lined out, megaphone pattern, see the dotted lines. Hence I would advise everybody to be very cautious about the next week(s) to see if we actually enter the definite bubble stage which could mean a lot of further growth before falling even deeper or seeing a major set back to more healthy and fundamentally justified valuations. As it looks by now and as you can see the indicators on the Chart bottom half indicate an bearish divergence, an monthly macd that is very much above the hights of the dot com bubble and on a daily frame it doesn't seem very diffrent, however and as we all know bubbles can reach incredible valuations and as we actually are a bit above the channel already there is a very much valid possibility of the hyperbubble scenario. All I can say is watch carefully and stay reactive rather than positioning to early.

Although keep rising yields and Dollar Value in mind which do posess a great risk to equitys and coincide accurately with the SPX reaching it's channel top.