8/7/21 Addition: As well as the weekly breadth shown lower down, the daily has to catch up. Generally, this market has been stretching so there could be an interesting snap when it does go. Meanwhile, it could produce more than a few fake-outs until everyone believes it can never decline again.
There is a second study being looked at that has the potential to move a projected ultimate terminal top out to November 2021. That would certainly have everyone confused. More on that later. Let's take one top at a time.
EOD:
Less than impressive close. Breadth looks like it is on it's way to occupying negative territory at the weekly level. If that trend continues, a top at some degree will soon follow. Note the hard drop in the histogram bars in the first three weeks in June '21 below the actual MACD plot line. This could be telegraphing a delayed hard decline / retrace until the chart evens out towards a serious top. We will probably see if that scenario has any merit soon enough.
2:38pm EST: If breadth continues as is into the close then the weekly MACD [NYAD] will print all negative values. A serious top will likely not print until there is a persistent negative weekly print on this chart.
Original post:
SVXY is printing an extremely similar pattern currently when compared with 2020 top. Note the VectorSpike [custom parameter] plot overlay shown. This is a parameter which is used to indicate directional components that are not readily seen otherwise. All of the chart indicators are lining up in a pattern reminiscent of 2020. It cannot be argued away easily that a top of some degree is likely about to show up if it continues to print in this direction.
The 'pivot ?' label on the 2021 chart could well be a part one of pre-topping 'decline events'. An exact replica overall is never expected- only pattern similarities with their own nuance of form. There does appear to be more to go in this market so while keeping a close eye on the pulse, it is necessary to stay with required proven signal flags as they occur.
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Do you ever think about what the catalyst would be to bring the SPX down by 1000+ points ? There has to be some really good reason for the market to fall that far.
ReplyDeleteThank you for your question. The market and events often occupy or overlap the same space regarding cycles. It then becomes a question of analyzing where in a cycle might the market be presently. All the indications are that it is in a very advanced set up deep into a cycle marked most recently by an unprecedented drop in short volatility instruments [2018- XIV & SVXY]. XIV was dismantled and SVXY still has not returned to previous drop levels. The idea of a catalyst other than the position in a cycle does not fit well. Markets generally top on optimism where progress / profit drive it to that point. Once everyone is 'in' that counts [capital has now flowed in to the market and the tank is on 'full'] the bidding can start to fall off [no more gas available or room to gas up]. Often this is coincident with events that then are viewed as 'catalysts' but that is not the underlying 'cause' for a decline. Hope this helps. Stuart
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