Monthly Chart is self explanatory showing the areas the bulls must defend!
I went back to all previous bear markets to see how the "trending channel" and blue line played out and it has helped me to develop some key areas today that must be defended by the bulls. (NOTE: The trending channel was establish by taking the ATH, next low, then next lower high...I hope that makes sense-see the red V on the charts).
Lastly, notice how the monthly 14 SMA is pretty spot on...a closing above this SMA meant the bulls were in the clear.
I added in some important non-horizontal trend lines to the current chart however the trending channel and 14 SMA are my main guides!
Years 1960-1985.
(You can see how important 68-73 became during 1960-1975 when the SPX was trying to get and stay above 100)
Years 2000-2010
DJI during the Great Depression...the big difference in the charts between now and then is the initial plunge from ATH, to low, to next lower high (Sept-Nov 1929) was 50%! This created quite the large overall trending channel however the trending channel never doubled!
Hope this helps further your studies of bear markets!
I went back to all previous bear markets to see how the "trending channel" and blue line played out and it has helped me to develop some key areas today that must be defended by the bulls. (NOTE: The trending channel was establish by taking the ATH, next low, then next lower high...I hope that makes sense-see the red V on the charts).
Lastly, notice how the monthly 14 SMA is pretty spot on...a closing above this SMA meant the bulls were in the clear.
I added in some important non-horizontal trend lines to the current chart however the trending channel and 14 SMA are my main guides!
Years 1960-1985.
(You can see how important 68-73 became during 1960-1975 when the SPX was trying to get and stay above 100)
Years 2000-2010
DJI during the Great Depression...the big difference in the charts between now and then is the initial plunge from ATH, to low, to next lower high (Sept-Nov 1929) was 50%! This created quite the large overall trending channel however the trending channel never doubled!
Hope this helps further your studies of bear markets!
Comment:
I've heard from a number of traders that they feel the "VIX" isn't responding according to the downtrend however after doing this analysis I actually think the VIX is responding as it should. We have stayed in the upper section of the downtrend channel so we've actually not moved too much in relation to other downtrend channels above whereby priced moved into the "doubled" downtrend channel so until this happens the VIX will probably continue to stay under 35-37ish area.