The SPXA150R is above 80 at levels not seen since the January 2018 top and stock market collapse. The red circles show five significant tops, er, actually four, as we await the Godot Top to show its ugly face. The green circles show the stock market bottoms. What do you think will happen?
Eyeballing the drops from the red circles, the SPX falls 350 points from the first red circle, the big Q4 2018 waterfall crash was 620 points, then 230 points and the fourth drop is 240 points. The average drop from a red circle is 360 points. Throwing out the largest and smallest drop and the average loss is about 3 hundo points.
Thus, it is easily conceivable for the SPX to drop from 300 to 400 points over the next month or two which would be a -9.3% to -12.4% drop, respectively. A -10% selloff is a correction and a -20% drop is a bear market. A lot of fun is ahead for markets which will require 20/20 vision in 2020.
At 9:48 AM EST on Thursday, 12/26/19, the SPX prints a new historic all-time record high at 3231.99. Investors Praise the Power and Glory of the Fed. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Note Added Friday Morning, 12/27/19, at 5:00 AM EST: The SPXA150R finishes yesterday at 81.16. The S&P 500 prints a new historic all-time record high at 3240.08 and new all-time closing high at 3239.91. Traders sing praise to the Federal Reserve's expanding balance sheet.
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