Waiting for the next Market Crash
Incoming High Volatility Resembling 'Black Tuesday'
Increased spending, debt, inflation, and uncertainty are getting out of hand as well as political instability and international tensions during a pandemic and a recession. We may never see a crash like 'Black Tuesday' again since strict regulations were implemented, but chart Indicators are showing high weakness at levels not seen in the last 27 years or more.
When in doubt, zoom out.
In recent months SPY has been in a sideways price trend traveling between strong levels of support and resistance. This consolidation trend may be getting ready to decide the next trend direction. This action is occurring above the channel which may appear as a false breakout that would send it back down within the channel. Even if the price decides to instead raise, the price will eventually have to return back within the channel. Expect volatility in the long-term.
However it could take months or years before a reversal in the price trend occurs. This bearish outlook has a significant impact for long-term traders. The increased uncertainty and risks could send investors to other Investment vehicles, further weakening the market.
A closer look
Zoom in to see the current ascending wedged that we have been in since entering the pandemic in 2020. Ascending wedges indicate continuations or reversals of the trend. Based on the relatively small size of the wedge, it will likely be a similar sized measured move in either direction. If a catalyst appears with high market weakness it could trigger a panic selloff. Expect volatility in the short to mid-term.
Chart Settings
The charted data shown above dating back to 1994 is adjusted to follow the channel of the 100 year market data. TradingView will only display data to 1994. I'm unable to link the 100 year price chart, but it will show the channel aligning near the same points.
Scale Price Chart Only - On
Logarithmic - On
This isn't absolutely accurate, but it shows obvious warning signs to help make better trading decisions.
Increased spending, debt, inflation, and uncertainty are getting out of hand as well as political instability and international tensions during a pandemic and a recession. We may never see a crash like 'Black Tuesday' again since strict regulations were implemented, but chart Indicators are showing high weakness at levels not seen in the last 27 years or more.
When in doubt, zoom out.
In recent months SPY has been in a sideways price trend traveling between strong levels of support and resistance. This consolidation trend may be getting ready to decide the next trend direction. This action is occurring above the channel which may appear as a false breakout that would send it back down within the channel. Even if the price decides to instead raise, the price will eventually have to return back within the channel. Expect volatility in the long-term.
However it could take months or years before a reversal in the price trend occurs. This bearish outlook has a significant impact for long-term traders. The increased uncertainty and risks could send investors to other Investment vehicles, further weakening the market.
A closer look
Zoom in to see the current ascending wedged that we have been in since entering the pandemic in 2020. Ascending wedges indicate continuations or reversals of the trend. Based on the relatively small size of the wedge, it will likely be a similar sized measured move in either direction. If a catalyst appears with high market weakness it could trigger a panic selloff. Expect volatility in the short to mid-term.
Chart Settings
The charted data shown above dating back to 1994 is adjusted to follow the channel of the 100 year market data. TradingView will only display data to 1994. I'm unable to link the 100 year price chart, but it will show the channel aligning near the same points.
Scale Price Chart Only - On
Logarithmic - On
This isn't absolutely accurate, but it shows obvious warning signs to help make better trading decisions.
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