Stock market peaks in July 2024, followed by an epic crash?
I have made some calculations regarding potential stock market development in the S&P500 in the coming months. There is of course no guarantee that it will turn out exactly like this, but there are very interesting mathematical correlations in an optimal scenario.
Since January 2018, the price has been inside an ascending channel with a couple of hits at both the bottom and the top of the channel and is on the way up.
I have then measured the time and height from the covid low in March 2020 to the next peak in late 2021 and then made an exact similar measurement from the low in October 2022 to a possible future peak.
Then I tried to find Fibonacci levels that coincide with the tops and bottoms of the chart. It can be tricky where there is no data but there are methods to resort to. If you measure from the bottom after the financial crisis in 2009 and to the highest before the covid rebound in 2020 (3397), you see that this ends up at the 50% level in this calculation. If you instead do a Fibonacci Extension between these levels, you end up at the same potential top level in the chart (double the distance). I have chosen to leave this out of the diagram to try and keep it as clean as possible.
The really interesting thing is that all these measurements converge at exactly the same level and time. This occurs in July 2024 at ≈6121.
Historically, peaks in the market usually occur around the same time that interest rates start to fall. According to the forecasts, it currently looks like it could happen in June this year.
If all this were to occur, we can note that the rise from October 2022 will then be 75%.
Should there then be a really big stock market crash and we look at the symmetry, i.e. 75%, we see that an equally large percentage decline would take us exactly to the levels at the double peak in the dotcom bubble in 2000 and the peak before the financial crisis in 2007.
This is therefore a calculation based on an optimal scenario, and such scenarios unfortunately rarely occur. But it's worth keeping in mind in case the market takes us there anyway.
Since January 2018, the price has been inside an ascending channel with a couple of hits at both the bottom and the top of the channel and is on the way up.
I have then measured the time and height from the covid low in March 2020 to the next peak in late 2021 and then made an exact similar measurement from the low in October 2022 to a possible future peak.
Then I tried to find Fibonacci levels that coincide with the tops and bottoms of the chart. It can be tricky where there is no data but there are methods to resort to. If you measure from the bottom after the financial crisis in 2009 and to the highest before the covid rebound in 2020 (3397), you see that this ends up at the 50% level in this calculation. If you instead do a Fibonacci Extension between these levels, you end up at the same potential top level in the chart (double the distance). I have chosen to leave this out of the diagram to try and keep it as clean as possible.
The really interesting thing is that all these measurements converge at exactly the same level and time. This occurs in July 2024 at ≈6121.
Historically, peaks in the market usually occur around the same time that interest rates start to fall. According to the forecasts, it currently looks like it could happen in June this year.
If all this were to occur, we can note that the rise from October 2022 will then be 75%.
Should there then be a really big stock market crash and we look at the symmetry, i.e. 75%, we see that an equally large percentage decline would take us exactly to the levels at the double peak in the dotcom bubble in 2000 and the peak before the financial crisis in 2007.
This is therefore a calculation based on an optimal scenario, and such scenarios unfortunately rarely occur. But it's worth keeping in mind in case the market takes us there anyway.