Doomsday Chart

SPY DIA UVXY QQQ IWM Hope for the best, but wait for the worst. When the music stops the party is over. This market has been the greatest Bull market in the history of Wall Street. But what will it happen if the previous All Time Highs we saw were the last ones? Considering that usually the market rises 70% and falls 30% of the time, which is a trend that happens more often than don't, assuming this was the last ATH, then the next step is a very aggressive correction that could tank the market below the the so called Trump's Rally. We have already seen the biggest correction late last year in December when the market practically wiped off the profits made during the Trump's administration. This shows two things, the Trump's Rally is supported on hot air, there's just speculative capital, not long term investors, the second thing, shortly above the start of this last leg in this Secular Bull Market there's a support around 2300. If the market doesn't consolidate, then the next step is the correction, when we'll see what's this support is made of, and if this will be strong enough to allow the market to become a trading market or an overtly Bear Market.

Usually the market corrects 10-20%, last correction was a very hard one a little above 20%, if this goes beyond a correction we could expect the market to fall to the levels it had at the end of the Obama administration, between 1800 and 2000 or try to test the support when it started to make new highs after the 2008 financial meltdown, which could set the support at around the 1500's level.

This post is not about politics, but purely technical analysis. The Obama/Trump references are used only for temporary references and nomenclature. If the 70/30 rule applies then it means the market could start correcting before the elections and do wild swings until it reaches 30% to the down side until around the 2000's level estimated at the end of October 2022.

Buckle up ! it's going to be a bumpy ride.