Something Different is Happening

The daily S&P 500 (SPX) chart courtesy of Trading View illustrates  the action on 01/24/22.

  1. The SPX went 4.7% below its 200 – day Moving Average (MA).  Moves of more than 2% below the 200 – day-  MA  imply something more bearish developing.
  2. At today’s low the SPX had declined 12.4% from the all-time high made on 01/04/22 making it the largest drop since the bull market began in March 2020.
  3. The SPX broke below another daily correction bottom, which was made on 10/04/21.

These factor indicate the bulls are unable to defend important support levels. 

There’s  a high probability that the first phase of at least a multi-month bear market is  in development.

We need to wait  for a multi- day or multi-week rally before establishing short positions.  

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.

6 thoughts on “Something Different is Happening

  1. Thanks for a quick update.
    What a spectacular market today, suprised after discovering market closed price (here is asia)
    What are your thoughts on this kind of volatile market?
    Yes, we need to see and wait for whats happening.

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  2. Volatility has just been off the charts and most indices have shown steep slides the past couple of weeks. However, the DJIA has still not dropped below its December 2 low. So it is possible that the large drop in SPX and NDX are “shakeouts” rather than being the start of a bear market. I am curious what you think about the DJIA not confirming the new lows seen in the other indices.

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  3. The DJIA has gone below the December 2, 2021 bottom. The DJIA has not closed below the December 2, 2021 bottom. Confirmations are based on where an indices has gone, not on the daily close.

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  4. Dow Theory relies on daily closing prices. Charles Dow exclusively used closing prices to determine status of a trend. Which makes a lot more sense than using intraday prices. Small volume trades take place during the day and the big volume trading by market movers takes place during the last hour of trading. Don’t get me wrong, I think there is a good possibility that the DJIA could close below the 12/2/21 bottom closing price. There just isn’t any way to know if it will.

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  5. Hi
    There are some analyst’s that follow the Dow Theory aspect about closing price. I strongly disagree with using closing price to determine the trend because prices during the day either went above or below the closing price.

    I repect your view, there’s no need to debate the matter – the market decide the matter.

    There’s still a chance the SPX could make a new all-time high. I consider this a low probability but its not a no – probability. I will soon have a blog about this possibility.

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