Market Outlook - September 2020: Tracking History (Update)
This month continues tracking today's market vs 14 historic declines of similar magnitude occurring over the last 100 years. The current event became 15.
Starting at highlighted cross of MACD / PPO vs signal line we compare today's recovery #15 to prior 14 events and their average. The process uses weekly data.
The crossing event happened 5/18/2020. At present, now 14 weeks later, today exceeds the Average gain/loss of the prior 14 events.
Average of prior 14 events: +11.88% at week 14
2020 event: +18.70% at week 14
The Average gain/loss at week 52 (after crossing) is +34.44%. I've shown a potential target area in 2021 as "end" with a second Yellow line.
Note the "start" for comparison is at the MACD /Signal crossing event on 5/18/2020, which is after the market's earlier bottom, and is the case for the comparative 14 events. This event's bottom was in March 2020. Thus the +18.70% gain from 5/2020 forward is incremental to substantial gain from March to May 2020. Same will be true for whatever outcome occurs by week 52 in 2021.
The 2020 event ranks 3rd after week 14. The majority of the 14 prior events track higher, with those having a rapid start continuing to outperform the average for all 14.
The 3 highest of the 14 historic events at week 14 were the same 3 highest at the subsequent 52 week point. However, the path is non-linear (as you'd expect). Periodic declines occurred and can be monitored today by using technical measures for guidance, such as RSI 14. I've added a red arrow (bottom) at today's date to highlight current approach to RSI >= 70 to reflect caution/opportunity as we move forward as RSI 14 fluctuates.
Starting at highlighted cross of MACD / PPO vs signal line we compare today's recovery #15 to prior 14 events and their average. The process uses weekly data.
The crossing event happened 5/18/2020. At present, now 14 weeks later, today exceeds the Average gain/loss of the prior 14 events.
Average of prior 14 events: +11.88% at week 14
2020 event: +18.70% at week 14
The Average gain/loss at week 52 (after crossing) is +34.44%. I've shown a potential target area in 2021 as "end" with a second Yellow line.
Note the "start" for comparison is at the MACD /Signal crossing event on 5/18/2020, which is after the market's earlier bottom, and is the case for the comparative 14 events. This event's bottom was in March 2020. Thus the +18.70% gain from 5/2020 forward is incremental to substantial gain from March to May 2020. Same will be true for whatever outcome occurs by week 52 in 2021.
The 2020 event ranks 3rd after week 14. The majority of the 14 prior events track higher, with those having a rapid start continuing to outperform the average for all 14.
The 3 highest of the 14 historic events at week 14 were the same 3 highest at the subsequent 52 week point. However, the path is non-linear (as you'd expect). Periodic declines occurred and can be monitored today by using technical measures for guidance, such as RSI 14. I've added a red arrow (bottom) at today's date to highlight current approach to RSI >= 70 to reflect caution/opportunity as we move forward as RSI 14 fluctuates.