For several weeks evidence has been gathering that suggest a major peak in US stocks could be forming.
What does a major peak mean? Take a look at the Dow Jones Industrial Average in 1929, 1973, 2000, and 2007.
The quantity and quality of evidence is directly related to the significance of a market turn.
Here are key pieces of evidence from three of the four market dimensions.
Momentum: Stocks and stock markets almost always make important tops with at least one RSI bearish divergence. As of early March 2021 there are multiple weekly RSI bearish divergences. Monthly and daily SPX - RSI also have bearish divergences. Incredible!
Sentiment: Since 1964 Market Vane Inc. has been polling opinions of market analysts on the direction of various markets. Major US stocks market tops usually come with bearish divergent readings. Market Vane is polling professionals, if they polled retailed traders the readings highs would likely correspond to market tops. Since the January 2018 bull market maximum, readings have been falling at each successive high.
Price: The percentage growth rate of Primary wave "1" added to the actual low of Primary wave "4" at SPX 2192 targets SPX 4008 as a possible termination point for Primary wave "5".
On 03/11/21 the SPX reached 3960 only 1.20% away from a bulls eye hit. When using growth rates from more than a decade away a leeway of 1.2% is within the zone for a potential turn. Its possible the SPX could continue rising into 4008 but its not necessary.
There's also fascinating evidence pointing to a major top from the time dimension, but its too extensive for this post.
What's listed in this post are just the main pieces of evidence, there's much more, again too extensive for this post.
If a major top is forming - the subsequent decline could be colossal in price and time.
Bulls that ignore the evidence could pay a huge price.
Bears that accept the evidence could reap an abundant harvest of profits!
Mark
What does a major peak mean? Take a look at the Dow Jones Industrial Average in 1929, 1973, 2000, and 2007.
The quantity and quality of evidence is directly related to the significance of a market turn.
Here are key pieces of evidence from three of the four market dimensions.
Momentum: Stocks and stock markets almost always make important tops with at least one RSI bearish divergence. As of early March 2021 there are multiple weekly RSI bearish divergences. Monthly and daily SPX - RSI also have bearish divergences. Incredible!
Sentiment: Since 1964 Market Vane Inc. has been polling opinions of market analysts on the direction of various markets. Major US stocks market tops usually come with bearish divergent readings. Market Vane is polling professionals, if they polled retailed traders the readings highs would likely correspond to market tops. Since the January 2018 bull market maximum, readings have been falling at each successive high.
Price: The percentage growth rate of Primary wave "1" added to the actual low of Primary wave "4" at SPX 2192 targets SPX 4008 as a possible termination point for Primary wave "5".
On 03/11/21 the SPX reached 3960 only 1.20% away from a bulls eye hit. When using growth rates from more than a decade away a leeway of 1.2% is within the zone for a potential turn. Its possible the SPX could continue rising into 4008 but its not necessary.
There's also fascinating evidence pointing to a major top from the time dimension, but its too extensive for this post.
What's listed in this post are just the main pieces of evidence, there's much more, again too extensive for this post.
If a major top is forming - the subsequent decline could be colossal in price and time.
Bulls that ignore the evidence could pay a huge price.
Bears that accept the evidence could reap an abundant harvest of profits!
Mark