Crash Bottom Anniversary Day

The prior blog noted that 03/23/21 was the one solar year anniversary date of the  crash bottom made on 03/23/20.  It was possible that a new S&P 500 (SPX) high could be  made on 03/23/21 plus/minus two trading days.

The daily SPX chart courtesy of Trading View illustrates what happened.

On 03/22/21 the SPX moved up and it appeared to be on the way to a new high within the  time target zone. However, today 03/23/21 the SPX went down. There’s still a  chance for the SPX to reach a new high within the next two trading days, but the depth of the decline looks suspicious.

A  more likely scenario is that Minor wave “4” of a possible Ending Diagonal Triangle could still be under construction.  If the price target zone  is reached, wave “4”  would be about .618 the size of the supposed Minor wave “2” – a common relationship.

Evidence that the SPX could later make another new all-time high comes from the VIX indicator which on 03/22/21 made a new low from its move down from its March 2020 high. Most of the time the SPX makes tops when the VIX  records a higher bottom.

Additional evidence US stocks could still rally is illustrated in the daily Consumer Staples – Exchange Traded Fund (XLP) chart.

My 02/26/21 blog “Consumer Staples Fund – Update February 2021” noted the XLP may have topped with a truncated Intermediate wave (5).  Additionally, the alternate wave count had the  decline from  November  2020 as  Intermediate wave (4).  This alternate count now appears to be the  best  wave count  –  the current rally is probably Intermediate wave (5).    

The price target zone is where wave (5) would be about 50% of Intermediate wave (1) – a common relationship. The price target could be reached in two to five trading days.

If  the SPX supposed Minor wave “4” is still underway, a new all-time high could come in three to six trading days.

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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