Let's establish the context first. On the weekly chart of the E-mini S&P 500, the bear market started in the fall of 2000 when the weekly MACD crossed below the zero line. The bear market ended in the summer of 2003, when the weekly MACD crossed over to the upside.That establishes the bull-bear context. Right now we are in the middle of a major bull market, notwithstanding expert opinions that it may have ended. The weekly MACD is still high up in the air, to call it done. For it to crossover below zero and enter a bear market, it takes many more months of bearish price action.
Before we extrapolate the trend and say the bear market has begun, let's ask, where exactly are we in the trend. The weekly momentum as measured by the CCI is now below 200. In all the instances, during the bull context, when the weekly CCI entered the -200 zone, the market bottomed within 1-2 weeks and the eventual price low was 10-20 SPX below the price low established during the week the CCI entered below 200. Even during the bear market (except one instance in 2001), the -200 CCI has marked major market bottoms. So again, we might be within 10-20 SPX points away from a major price bottom. Expect retests of this weekly low, a couple of times, over the next 1-2 weeks. Or maybe this time is different.....
1 comment:
NAV...I'm gonna have to disagree this time...there are too many huge bear divergences at this high to think it will be over shortly...that MACD looks horrible and is just starting down for one. The Mc Osc/Summation for another. Normally after these big divergences build, they go much farther than most think. This run was also just about parabolic, and needs to blow off much more steam before a new start takes place. But approaching on the ST is an oversold condition, and there will be good sharp bounces along the way. Good luck!
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