SPX weekly chart has given clear signals in the past with regard to overall changes in trend.
- The 2008 recession was signaled by a clear bearish divergence on the weekly.
- The 2009 bottom and reversal into a 9 year bull market was signaled by a strong bullish divergence on the weekly.
- When many thought the market was crashing in late 2015/early 2016, a strong bullish divergence showed that selling momentum was done and that bullish continuation would resume.
OPERATING ASSUMPTION:
The large bearish divergence on the monthly chart formed between the January and October highs indicates WE ARE IN A BEAR MARKET UNTIL PROVEN OTHERWISE
PLAN:
1. Short every rally (currently 4 straight green weekly candles) until bullish divergence forms.
2. Close shorts when bull divergence forms on 1D or 4H charts.
3. Continue operating under assumption of a bear market until bullish divergence forms again on weekly chart (like 2009).
4. Go net long on index funds after said divergence is observed and confirmed.
- The 2008 recession was signaled by a clear bearish divergence on the weekly.
- The 2009 bottom and reversal into a 9 year bull market was signaled by a strong bullish divergence on the weekly.
- When many thought the market was crashing in late 2015/early 2016, a strong bullish divergence showed that selling momentum was done and that bullish continuation would resume.
OPERATING ASSUMPTION:
The large bearish divergence on the monthly chart formed between the January and October highs indicates WE ARE IN A BEAR MARKET UNTIL PROVEN OTHERWISE
PLAN:
1. Short every rally (currently 4 straight green weekly candles) until bullish divergence forms.
2. Close shorts when bull divergence forms on 1D or 4H charts.
3. Continue operating under assumption of a bear market until bullish divergence forms again on weekly chart (like 2009).
4. Go net long on index funds after said divergence is observed and confirmed.