If human emotions are reflected in stock prices, and human emotions tend to repeat themselves in a fairly predictable way, then it is worth checking out the uncanny resemblance the current S&P 500 technical setup is to the middle of last summer’s.
The first chart below is June 2010, where we saw a major breakdown, including May’s flash crash. Note the huge leg lower, followed by an eventual double-bottom, and then another final leg lower to arrive at a true bottom. Is it guaranteed to happen again? Absolutely not. In fact, it may be too obvious to see the same result. I have no way of knowing just how many traders are aware of the similarities.
Either way, I said last night on my recap that 1180 was a very key level, and the market is struggling to hold it here.
_____________________
_____________________
Thanks. I think that pretty much sums it up.
Ricky, tanks for splain-in, this is gonna leave alot retires in the hole.
If the market does a classic scenario, like in 1998, it should go back to tag those 1120 levels for the official retest. Remember originally how everyone was like “the market needs to retest”? Well, retests aren’t supposed to be two days later. They’re supposed to be a few weeks later when no one is looking for them anymore. This could be it. I don’t really care one way or another, I’m back to no swings since eveything is in “the middle” (risky!), i.e., cash for intraday trading.