Critical fib support failures
The 1.27 fibs are giving up - And this often matters.
SPX is now making the decision as to whether or not to hold the 127 fib of March 2020. I think a clear failure of bulls as this fib will mark the start of a reversal.
Upon retesting the 161 fib, SPX has dropped directly 12%. An incredible reaction from this level - and under 127 we might be into reversal.
Backlog of 161 forecasts:
Here’s a list of other major 161s that have now rejected and broken their 127s.
The failure of 127 fibs after a valid 161 rejection (Defined by the market failing to break the 220 fib and heading into a clearly stronger sell pattern under the 161- Read more) can be a trend reversal indicator. In a trend reversal, we’ll now have a shock and awe sell-off.
If this comes we might enter into more sideways/bullish markets in the near term (And it can go on for many months or even years), but the uptrend may be broken. When I say the uptrend may be broken I am not talking about a “Big dip”. I’m talking about about a sustained bear market that lasts not less than five years.
First major drop is 50% in such an event.
First short targets for speculation/hedging are around 3350. This is where the first bounce would be most likely. If this level breaks we can re-enter short, but often we’d bounce 10% of so after the capitulation move. If there’s a capitulation move to come, it’s not far away and it’s probably not the end of the overall bear.