S&P 500, Daily, 2008 Analogy - before the worst?
Atualizado
I have been considering the 2008 analogy for some time. I tried to find an important price resistance and I found it. In 2008, the worst drops started at 1313 and it was a fibo retracement of about 47,5%. Today, a similarly important level, in my opinion, is the retracement of 3939, which is also about 47,5% fibo. Of course, I don't expect a perfect rebound of the price from that point, as it was with 1313 in 2008. It is also important to look at the VIX index (related idea linked) and the lower time frame structure (by the analogy, there should be no big drops, but confirmation in the medium and short-term structure - 1H/15m). If the swing low is broken, I will be looking at the momentum in order to predict the bottom. Personally, I think the March 2020 low will be broken. In 2008, we also had a break of the bear market low after the dotcom bubble.
Of such fundamental matters that indicate the further course of the bear market, I can include, for example:
- inverted yield curves [T10Y2Y: -0.39, T10Y3M: 0.30 (in decline)],
- a huge divergence between T10Y2Y and T10Y3M before the curve is inverted,
- a divergence between Real and Nominal Disposable Personal Income (Nominal is rising, Real is in decline),
- a divergence between Advance Retail Sales: Retail Trade (is rising) and Advance Real Retail and Food Services Sales (in decline) since March 2021,
- the recessionary PMI.
And that is all I wanted to convey to you.
Not investment advice, only my own opinion.
Of such fundamental matters that indicate the further course of the bear market, I can include, for example:
- inverted yield curves [T10Y2Y: -0.39, T10Y3M: 0.30 (in decline)],
- a huge divergence between T10Y2Y and T10Y3M before the curve is inverted,
- a divergence between Real and Nominal Disposable Personal Income (Nominal is rising, Real is in decline),
- a divergence between Advance Retail Sales: Retail Trade (is rising) and Advance Real Retail and Food Services Sales (in decline) since March 2021,
- the recessionary PMI.
And that is all I wanted to convey to you.
Not investment advice, only my own opinion.
Nota
Also watch out for the 75 EMA.Nota
Then there were some slight declines in the last downward impulse, so I looked at the MA100 instead of the EMA75. Nice touch in the pro-decline zone, and the price has gone down. I also have an eye on another scenario, but as long as this one works, I'll stick with it.Nota
My zone was breached, there was too much momentum after the CPI print. That does not mean the analogy will not work. There may be exceptions. Actually, the price is in the weekly zone. Now I am observing the SMC order flow on US30 (maybe I will publish an analysis) and the 2008 analogy on VIX, which still works. Both scenarios can fit themselves perfectly.Nota
The situation requires more time than I expected. We can see that, for example, US30 is only 8% from the peak, while SPX is almost 20%, and NDX is slightly over 40%. This may suggest that the fat ones just want liquidity to dump. Some people point out that it is simply a capital shift. But in my opinion, in the current situation, looking at the macroeconomic data, e.g., the leading economic index (LEI), there must be a crash. We'll see if I'm right or wrong.Nota
The analogy is out of date.
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