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