This series has followed a path since May 2020 using weekly data and Price Percent Oscillator (PPO). A PPO event trigger has been used for comparison against 14 previous large scale market declines over the last 100 years. Progress updates have been published using a monthly series of charts at TradingView. If you've followed along since July 2020 you've witnessed a steady path to May 2021 that was targeted back then. We're almost done, so the question becomes "Is this THE end."
We are entering week 51 of 52 since PPO trigger crossing upward at May 2020 following prior low in March 2020. This is the 15th event compared to 14 previous historic market declines of similar large magnitude.
* Average of prior 14 events: +34.13% after week 50
* 2020 as 15th event: +41.47% after week 50
Note the chart's "Start" yellow arrow for comparison beginning at the PPO /Signal event trigger on 5/18/2020.
The Average gain for the 14 historic events at week 52 is +34.44% (forward from time of PPO crossing) shown using a second Yellow arrow for May 2021.
The current recovery is trending above average and can be compared to previous near/above average events plus average trend for 14 previous events.
5 of 14 were above average after week 50. The current result ranks 5th among the above average outcomes surpassed by only 4 prior events.
All 5 of the previous above average outcomes finished higher than average after 52 weeks (since they're so close to week 52 at this point).
1 other VERY slightly below average at week 50 eventually finishing above average at week 52.
The other 8 of 14 below average at week 50 finished below average at week 52 (also so close to week 52 at this point).
Looking ahead and comparing previous events at week 52:
4 finished > 48% higher than week 52 average (1921, 1942, 1982 at 58% higher and 1932 at 86% higher)
2 finished > average (1958, 2009)
8 remaining laggards continued to lag and finished below the 52 week average (1940, 1962, 1966, 1970, 1974, 1988, 2001, 2002).
The current path is closest to 2009 in history which finishing 41.76% higher after week 52. Always good to under promise and over deliver.
Looking forward, keeping and eye on weekly RSI14 is prudent. Currently elevated above 70 (Red arrow), a pullback to midline of RSI=50 would occur if prices decline near EMA50 (Red line). That would put us back to early 2021 index levels or about 10% lower from here. Magnitude would be similar to October 2020 decline which shows similar RSI and EMA readings.
We all know the future is unknowable, but awareness of potential risk is always prudent.
We are entering week 51 of 52 since PPO trigger crossing upward at May 2020 following prior low in March 2020. This is the 15th event compared to 14 previous historic market declines of similar large magnitude.
* Average of prior 14 events: +34.13% after week 50
* 2020 as 15th event: +41.47% after week 50
Note the chart's "Start" yellow arrow for comparison beginning at the PPO /Signal event trigger on 5/18/2020.
The Average gain for the 14 historic events at week 52 is +34.44% (forward from time of PPO crossing) shown using a second Yellow arrow for May 2021.
The current recovery is trending above average and can be compared to previous near/above average events plus average trend for 14 previous events.
5 of 14 were above average after week 50. The current result ranks 5th among the above average outcomes surpassed by only 4 prior events.
All 5 of the previous above average outcomes finished higher than average after 52 weeks (since they're so close to week 52 at this point).
1 other VERY slightly below average at week 50 eventually finishing above average at week 52.
The other 8 of 14 below average at week 50 finished below average at week 52 (also so close to week 52 at this point).
Looking ahead and comparing previous events at week 52:
4 finished > 48% higher than week 52 average (1921, 1942, 1982 at 58% higher and 1932 at 86% higher)
2 finished > average (1958, 2009)
8 remaining laggards continued to lag and finished below the 52 week average (1940, 1962, 1966, 1970, 1974, 1988, 2001, 2002).
The current path is closest to 2009 in history which finishing 41.76% higher after week 52. Always good to under promise and over deliver.
Looking forward, keeping and eye on weekly RSI14 is prudent. Currently elevated above 70 (Red arrow), a pullback to midline of RSI=50 would occur if prices decline near EMA50 (Red line). That would put us back to early 2021 index levels or about 10% lower from here. Magnitude would be similar to October 2020 decline which shows similar RSI and EMA readings.
We all know the future is unknowable, but awareness of potential risk is always prudent.