Yesterday 08/25/21 was the thirty – fourth anniversary of the US stock market top that preceded the 1987 global stock market crash. On 08/25/21 both the S&P 500 (SPX) and Nasdaq Composite (IXIC) made new all-time highs. Today 08/26/21 the IXIC made a marginal new all-time high unconfirmed by the SPX and Dow Jones Industrial Average – a bearish “Rule of the Majority” signal. All of the sentiment and momentum indicators on 08/25/21 continued to show extremely bearish signals.
The 15 – minute SPX chart courtesy of Trading View illustrates the most recent action.
A move above SPX 4487.83 opens the door for a move to a new all-time high. A move below SPX 4357.73 could be very bearish – it would be the first time since the bull market began in March 2020 that a short -term bottom was broken.
The extremely bearish sentiment and momentum readings are coming at a seasonal topping zone – late August to early September. This time zone marked important peaks in 1929, 1987, and a secondary top in 2000.