Could it be? Could we finally have seen the last new all time high in the markets? That’s the question I’ve been asking myself for some time now, and yet the markets keep powering on crushing one new high after the other.
I’m going to make a case here that we actually might not see a new high for some time, and that we can expect a pull-back here, solely based on my technical indicators.
As many of you know I have been following a very long-term pattern in SPY since early 2012 when it became evident that the markets might be in for a long-term bull-market. Below is the Monthly chart of the SPY, showing a long entry in Oct,2011. The long entry depicted a XABCD pattern with XA targets as per Fibonacci projections.
I have written several articles over the years on this pattern, at the most prevalent Fibonacci levels such as the 161.8%XA, where the markets experienced a considerable pull-back.
At this point my indicator has exhausted all its projections, when price surpassed the 261.8%XA in November last year, after it had proofed itself to be of resistance for the prior 4months.
If you look carefully at the gr8pressure indicator, it usually shows a decline while price is still increasing, prior to a pull-back. This was very obvious right before the 2008 crash, it was obvious prior to the pull-back in 2015. And up to now we do see a slight negative divergence as well, where the market is now again at all-time high, however the grpressure is below 75, and below the 2018 levels.
zooming in on the chart, we can see an AB=CD pattern, where it’s PRZ paints a zone between roughly 331 and 345. where we have to be diligent for a Potential Reversal.
Looking at SPY on a short timeframe of 15min, we saw a perfect pattern completing exactly at the 161.8%XA yesterday, 2-19-’20, and subsequently the market reversed. The patterns over the past days have given us some really good intra-day trade opportunities. Wouldn’t it be something if this pattern completion indicated the reversal on the larger Monthly pattern?!
I have changed my long term outlook from bullish to neutral, and will turn bearish long term if monthly candles close below the PRZ zone depicted on the Monthly chart.