SPY and the Big Bear

1 мая 2020 г.

There is little doubt in my mind that we are in the start of a large bear market. The start, even though we sold off to 220 and retraced to 290. Dead cat bounce. Dead cat bounce very high.

30 million unemployed in the US alone in 1 month, travel and leisure being decimated, blue collar workers laid off and white collar workers to come next (in the summer, presumably). And when are people going to pretend like we have no pandemic? Mind you, small changes to consumer behavior change economies. Some would say this change of behavior is larger than just small. These are troubling times, unfortunately.

These are projection and potential bottoming locations. No one I know thinks we are going to SPY 140, SPY 130, but the head and shoulders would tell you a different story. Each level presented will be targets should we break the neckline of the large head and shoulders pattern on SPY, anything below SPY 230 in my mind (though, I am short here). Where is the neckline? No idea, tbh. Best I could do was target the previous consolidations, and guess where the H&S might reach.

Only target not identified by the head and shoulders is SPY 170, which is the .618 fib level. If we do reach here (and I strongly suspect we will), most likely this will be a good place to bounce. No specific chart patterns target here, but thinking about how much time this may take to play out, and where it is psychologically, I could see this being a good buying opportunity.

I am more than convinced we are entering a large bear phase of the market. Honestly, would be quite happy to eat my words and admit defeat as I want to see the stock market strong. But here, just listening to the silence of the chart pattern...