Major Stock market confluence of trend lines occurring

[tradephoric]

Every major trend line in the S&P 500 over the past 20 years is converging right now.   The market breaking through these resistance levels and making new highs would be incredibly strong while a further break down could suggests we are at the start of a larger down trend.  The orange line has been a major support/resistance level in the market since 1982 and the market could potentially return to these support levels (which would equate to roughly a 60% decline in the market)

[Max Rockatansky]

Or nothing could happen at all.  It seems like people have really lost perspective that the stock market rises and falls over time.  It's not news until an actual crash happens, even the COVID induced crash was short lived. 

[tradephoric]

It's just interesting to note if nothing else.  Never in our lifetimes have we seen so many trend line convergences in the US markets.

[Scott5114]

Every major trend line in this graph is converging too!

[Thing 342]

Every major trend line in the S&P 500 over the past 20 years is converging right now.   The market breaking through these resistance levels and making new highs would be incredibly strong while a further break down could suggests we are at the start of a larger down trend.  The orange line has been a major support/resistance level in the market since 1982 and the market could potentially return to these support levels (which would equate to roughly a 60% decline in the market)

Maybe from 1982-1994, but not right now. Why would the market suddenly revert to the uninflated trends of an arbitrary period that ended 26 years ago?

[tradephoric]

Maybe from 1982-1994, but not right now. Why would the market suddenly revert to the uninflated trends of an arbitrary period that ended 26 years ago?

The 1982-1994 trend line has acted as support in the markets as late as 2011.  Long term trend lines can act as support during market volatility.  Of course for the market to return to this trend line, that would equate to a 60% draw down which would be a little worse than the global financial crisis.  Here's a chart that projects the S&P 500 will bottom out at 1470 by January 2024, pretty much tapping the 1982-1994 trend line.

[Scott5114]

I'm torn between whether I should point out that a drop like what happened Q1 2020 is unlikely to happen again unless we have another protracted economic shutdown, or pointing out that 1994—2008 looks like the Golden Arches and therefore this graph is predicting that you should buy MCD.

[tradephoric]

I do own MCD!

[kphoger]

I do own MCD!

Now I know who to blame for crap hamburgers.

[tradephoric]

In the locked "are we heading for a market crash?" thread i questioned if the DJIA intraday high of 26,951 on October 3, 2018 would be a multi-year top in the market.  I juxtaposed the current market to the 2008 market to make my point that i think a drop may be coming: 



But I'm not always bearish trying to predict market tops.  When the market ultimately did fall 20% from its October 3, 2018 high, i shifted to being bullish at Christmas at least short term:

I get the feeling tomorrow is going to be the base in the market short term.  Perhaps a low of 21300 in the DOW around 11:00AM before it turns around and closes near the green.  A V shape trading day.  Who knows what will happen but that's my best guess.

The DOW hit a low of 21,717 at 10:54AM today before rocketing over 600 points.  This is definitely the "V shaped" recovery day i was expecting even though it didn't hit my 21,300 target.  Regardless, the price action of today definitely suggests we have hit a short term bottom in the market (there is decent support levels at 21,717... close enough for me).

Ultimately DOW 21,717 was a low in the market until the recent COVID crash we saw back in the Spring.  During that crash the target low i was looking at based on support/resistance levels was DOW 18,500 (it hit a low of 18,213).  Close enough, and i made a healthy profit increasing my equity holdings in the DOW 18k and 19k levels.

[triplemultiplex]

I do own MCD!

Now I know who to blame for crap hamburgers.

Hey you get what you pay for, man.

[webny99]

I do own MCD!

Now I know who to blame for crap hamburgers.

I was hoping someone would have some fun with that one!