A roadmap to 160 on SPY. Wave A of a mega bear ABC correction will end anywhere between 270-320 on SPY. Wave B of a leading expanding diagonal tend to be violent retracements back towards previous resistance levels i.e. 390 before an impulsive Wave C that should see over a 50% erasure of the value of U.S. equities.
A 1:1 ABC should put SPY at 224. A retest of the March 2020 COVID lows
A 1:1.618 ABC should put SPY at 160. A retest of the double top of the dot com bubble in 2000 and 1st GFC in 2008.
Taking a look at the volume profile of the whole 2008 bull market — 224 is at Value Area High, near a high volume node, but only a .382 retracement of the bull market which is why I lean towards a 1:1.618 ABC at 160, near the .618 retracement of the bull market. As a bonus, a crash to 160 would be a 66.6% crash, so I’m definitely leaning towards 160.
It’s fun to watch end of the world scenarios, 90-99% crash, Worst depression since 1929. But one thing is for sure. Permabears have ALWAYS been wrong. Permabulls have ALWAYS been correct. It’s not a question of whether the stock market will make a new all time high. It’s simply a matter of when.
Furthermore, if you zoom out on charts like AAPL and MSFT, the top 2 holdings in SPX, that does not look like a completed 5 waves of a grand super cycle. If anything that’s either an extended Wave 3 or the beginning of a Wave 4 retracement.
I don’t believe the permabear argument that this is a generational wipeout. Instead, this crash will be a generational opportunity to load up on America’s best companies at a premium discount.
A 1:1 ABC should put SPY at 224. A retest of the March 2020 COVID lows
A 1:1.618 ABC should put SPY at 160. A retest of the double top of the dot com bubble in 2000 and 1st GFC in 2008.
Taking a look at the volume profile of the whole 2008 bull market — 224 is at Value Area High, near a high volume node, but only a .382 retracement of the bull market which is why I lean towards a 1:1.618 ABC at 160, near the .618 retracement of the bull market. As a bonus, a crash to 160 would be a 66.6% crash, so I’m definitely leaning towards 160.
It’s fun to watch end of the world scenarios, 90-99% crash, Worst depression since 1929. But one thing is for sure. Permabears have ALWAYS been wrong. Permabulls have ALWAYS been correct. It’s not a question of whether the stock market will make a new all time high. It’s simply a matter of when.
Furthermore, if you zoom out on charts like AAPL and MSFT, the top 2 holdings in SPX, that does not look like a completed 5 waves of a grand super cycle. If anything that’s either an extended Wave 3 or the beginning of a Wave 4 retracement.
I don’t believe the permabear argument that this is a generational wipeout. Instead, this crash will be a generational opportunity to load up on America’s best companies at a premium discount.
Comment:
SPY fiddling around its 200W MA. Bouncing today to form a Wave 4 to 383-387 before spiraling down to 320 imo. From there... things will get interesting...
