SP500 : THE BIG SHORTHi traders!
For the past months, I kept getting notifications about the DOW and SP500 making 12 months high always weekly. I always keep an eye on what is happening on this side of the market even though I only focus on trading forex pairs and commodities.
I only like to observe the SP on the largest of timeframes.. MONTHLY. It gives me perspective and an overall idea of where the market is standing at any giving point. It's also important to see for the technical side of things how the market reacted when the previous 2 market crashes happened.
I truly think that its almost impossible from just looking at the chart of the SP to manage THE BIG SHORT. There is too much things happening outside of technical analysis to bring out the true colours of what might happen next. All major movements will be triggered by something fundamental... something that will have enough power to shut down everything in the market. When those movements happen, thats when things get very technical. You could draw some nice patterns and use some FIBs to get a clear idea of where the price will go.
I always like to go over time scales to understand how much time passed during each crash and the recovery times. I noticed that as of today, we are almost exactly are at the amount of days of both crashes (DOT COM + HOUSING) without having a national crisis of some sort. Then I thought to myself what is the current bubble right now? How are things standing in the world right now?
Possible Bubble? Crypto currencies
New USA President.. TRUMP!
Debts? Larger than it ever was
War? North Korea
Just to name a few..
I'm just thinking that if a crash could happen, we might be near it right now. I don't have all the info to crunch some real data and compare some economic projections but some things just seem like they are already set in motion for it to happen.
As far as the most general of all indicators,
MACD is sitting very high (as high as those 2 last crisis)
RSI finally managed to make it above 70 (which is NOT a good thing atm)
The blue zone I highlited on top of the chart might be the last straw for the SP500..
TO BE CONTINUED
Trade safe!
Disclaimer: This is my trading analysis, it is not an invite or recommendation to trade.
