SPX ABC complete, may BO falling wedge this week.
SPX fututres on Feb 28 finished a classic ABC correction; B rallies 0.618 of A & C retraces 1.272 of B. (a final capitulation by algos due to the "NUCLEAR" news)
It may BO of a bullish falling wedge this week.
Some historical data:
Market's geopolitical shock events historical on average causes a 5% drawdown, bottoms in 22 days & recovers in 47 days.
SPX averaged 13.7% drawdowns every 2 years for the past 47 years. ( we're past 14%)
Only 5 have turned into bear markets (>20%) with average drawdowns of 32.5%.
SPX averaged 17.1% intraday drawdowns during mid-term elections years like 2022.( We are now only at 14%)
Although not obvious, there seems to be also an Inverse H&S forming along the upper wedge. Breaking out of this neck/wedge may ultimately
send SPX again to restest the ATH at 4800 sometime middle of 2022. Then a big ABC correction follows after the final wave 5 completes.
Although historically the SPX rallies just before an invasion, there will be a lot of volatility & a lot of work has to be done before another ATH.
This may not be the right time to go short as sentiment is at a historical low & Put/Call ratio extremely high. (Buy when there is blood in the market).
Market will rise in the absence of new sellers below 4100 & when hedge funds cover their shorts.
not trading advice. I hope this guide helps you.
It may BO of a bullish falling wedge this week.
Some historical data:
Market's geopolitical shock events historical on average causes a 5% drawdown, bottoms in 22 days & recovers in 47 days.
SPX averaged 13.7% drawdowns every 2 years for the past 47 years. ( we're past 14%)
Only 5 have turned into bear markets (>20%) with average drawdowns of 32.5%.
SPX averaged 17.1% intraday drawdowns during mid-term elections years like 2022.( We are now only at 14%)
Although not obvious, there seems to be also an Inverse H&S forming along the upper wedge. Breaking out of this neck/wedge may ultimately
send SPX again to restest the ATH at 4800 sometime middle of 2022. Then a big ABC correction follows after the final wave 5 completes.
Although historically the SPX rallies just before an invasion, there will be a lot of volatility & a lot of work has to be done before another ATH.
This may not be the right time to go short as sentiment is at a historical low & Put/Call ratio extremely high. (Buy when there is blood in the market).
Market will rise in the absence of new sellers below 4100 & when hedge funds cover their shorts.
not trading advice. I hope this guide helps you.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.