Attention SPX Bears (A chance to have your cake and eat it too)
For those SPX Bears who have noticed the percent(%) of stock above the 50-day has been dropping from the beginning of 2024 and wondering … Why hasn’t the SPX been dropping as it typically does when this happens ?,....Unless SPX drops suddenly , here's the 2024 plan:
First: If you have noticed this your way to smart and shouldn't be trading stocks (try landing rovers on mars or something like that), but if you want to trade anyway continue reading.
Second: (The Cake): Wanted to point out two(2) recent past bull markets where the percent(%) of stock above their 50-day dropped from the beginning of the year, while the market continued to make new highs (because it was in the middle of a bullish Wave 3). Each lasted about 140 bars, before they aligned again and continued up for 100 bars more.
Third: (Now eat the cake): Ultimately in each case (240 bars later) the market started a correction to the precise level at the start of this divergence.
Finally, the red box in the upper left, shows the ever-decreasing possibility of a Elliott expanded flat correction, seems really unlikely we all must admit (but can’t rule it out until we can)
First: If you have noticed this your way to smart and shouldn't be trading stocks (try landing rovers on mars or something like that), but if you want to trade anyway continue reading.
Second: (The Cake): Wanted to point out two(2) recent past bull markets where the percent(%) of stock above their 50-day dropped from the beginning of the year, while the market continued to make new highs (because it was in the middle of a bullish Wave 3). Each lasted about 140 bars, before they aligned again and continued up for 100 bars more.
Third: (Now eat the cake): Ultimately in each case (240 bars later) the market started a correction to the precise level at the start of this divergence.
Finally, the red box in the upper left, shows the ever-decreasing possibility of a Elliott expanded flat correction, seems really unlikely we all must admit (but can’t rule it out until we can)
ORANGE: Is the SPX price chart
The reason for this divergence:
When markets "turn" or reach a bottom, many stocks suddenly at the same time rise above there 50-day (causing a spike), then when more and more stocks start sloping higher their price get tighter to their 50-Day every (once in a while dipping below for correction) this causes the 50-day percentage to have a correction from its spike, eventually there is a market correction and a final push where the 50day stock percentage and the market realigns and move up together. when this happens the market is getting ready for a larger correction. This divergence is considered a possible a wave-3 conformation.