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SPX MACD lay of the land


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#1 gm_general

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Posted 22 May 2020 - 01:00 PM

SPX is between 61.8% retrace zone and 200 SMA. It could also do a 50 SMA support test. My feeling is if it breaks above 200 SMA you should see massive covering which could somewhat deplete the short rocket fuel stockpile we are sitting on.

 

On the topic of SPX MACD, I have been wondering for years about these megaphone structures that form over long periods of time. Its almost like a resonance pattern that builds up amplitude as it proceeds. So again here is the current record breaking case, with 3 trips to the support line. If I had to guess I would say the larger the drop in MACD to support, the more elastic tension is stored and released in the rebound. So #1 (being small) did not make it very far up, and #2 (being larger) made it farther. I would say #3 (ginormous) is more like #2, only 3 times bigger. MACD 9 EMA now is meandering around the MACD line just like 2 did. It did not stop the index from traveling higher the last time.

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#2 gannman

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Posted 22 May 2020 - 04:07 PM

in your experience have you ever seen anything like point 3 happen before 


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#3 Darris

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Posted 22 May 2020 - 04:51 PM

If you have SC pro, I think you can look at DOW prices back to the 1920's, and I thought GM general showed a similar macd long term chart back in March.  Anyway, there is no price drop as fast as we had in 22 days in history, but if you expand to 40 days or so, then there are some long term similarities.  IMO, anything prior to 1945-1950 is more of an agricultural Market place, after WW2 we transitioned to an Industrial Market place, and in the 1990's we started the Computerized or technological Market Place.  The speed of information changes things.



#4 gm_general

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Posted 22 May 2020 - 04:53 PM

That size EMA displacement? No - I have to get some time to see for the Dow in 1929 had a displacement of similar percentages, I think that may be the only case comparable. But I think there have to be some universal laws at work that are in effect.



#5 K Wave

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Posted 24 May 2020 - 03:29 PM

That size EMA displacement? No - I have to get some time to see for the Dow in 1929 had a displacement of similar percentages, I think that may be the only case comparable. But I think there have to be some universal laws at work that are in effect.

Here ya go. Have a look.

 

dji.png


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#6 K Wave

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Posted 24 May 2020 - 03:33 PM

The 325 level on that chart above corresponds to about the 3030 level on SPX today.

 

The fact that we are already challenging it, so soon after the drop tells you all you need to know about the relative strength of the rebounds.

 

NAZ already blew that level out long ago, while after 1929, it never even got close to doing so.

 

This is NOT 1929 Redux


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#7 K Wave

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Posted 24 May 2020 - 03:36 PM

That said, if SPX stalls shortly at 200 day MA, I could see a 1962 style secondary move down, before resuming the uptrend, once the 200 day IS blown out...

 

And if gets blown out dead ahead, then even 1962 type drop may not happen.....


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#8 K Wave

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Posted 24 May 2020 - 03:44 PM

And here is an NDX chart ( the "Dow" of this Century)

 

As you can see, No Comparison to 1929 other than the speed of the initial drop.

 

Note that the 200 MA never turned down, and is now re-accelerating upside.

 

Note also 1929 MACD never exceeded the pre-crash peak, while NDX has, and is consolidating above it....

 

Sure we could see a pullback soon, but am guessing price would find support now at any big pullback to the 200 MA.

 

Best guess...we go to new high first...

But...if if were to roll back over before then, this area of the Big Gap fill would be most likely spot.

 

ndx.png


Edited by K Wave, 24 May 2020 - 03:46 PM.

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#9 K Wave

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Posted 24 May 2020 - 03:50 PM

And lastly...IF...NDX were to break back below 8K, then that would likely be a pretty bearish long term signal.

 

But right now am focused on the 15 min chart...will worry about bigger stuff later! laugh.png


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