This is an update to the 22 Feb posting 'Has the SP500 been producing a repeat rally?'
As you can see from the charts below, there were 3 prior rallies over the past couple of years similar in nature to the rally of the past 2 - 2 1/2 months. - If this is to continue rhyming (as opposed to repeating) with the previous 3 rallies, then we are well into the end-game for this rally. --- Of course there is no reason that this could not continue on its own course - comparison charts are always fraught with dangers when it comes to interpretation and extrapolation, and their similar appearances may be purely coincidental. - However, continuing with pure conjecture: suppose this does continue to follow a similar path to the prior three, what would the likely outcome be: Following the prior rallies the markets corrected 100% (Included the flash crash), 29% and 55% over the subsequent couple of weeks. - To reiterate; just because it happened before, does not mean it will not happen again, but it is noticeable that significant correction occurred. - Charts of the 3 prior rallies are reproduced below, with details of the current rally added.
I would also like to add that last week produced a potentially bearish 'Hanging Man' candle. (See lower charts). Single candle signals are not necessarily significant on their own, but taken in context with other signs they should be given consideration. - I like to look at all these signs as clues into trying to help understand and forecast the environment or direction which may lie ahead. - Right now this to me is indicating a heightened possibility of a correction or reversal ahead, or perhaps an erratic consolidation.
Please Note: I work with professional traders as 'Trader Performance, Psychology and Development Coach' helping them further develop the mindset and habits needed to achieve sustained trading success. I work with traders in banks, hedge funds and proprietary trading houses. - If you would like to find out more about my work and would like to know more about how it could help drive you towards greater 'trading success' please email me on sgoldstein@bgtedge.com or check out my website www.mindsetofatrader.com.
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Nice charts.
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