How to Confirm a Bear Market on the S&P 500 for AMEX:SPY by DFauvre

I use a proprietary method and indicator to determine the direction of the market. As you can see in this chart is has a very high degree of accuracy. In brief, it uses 91 day candles (they work better than quarterly candles) and if a candle closes below support (green box) there is a high probability of the start of a bear market.

The system accurately predicted the bear market crazy of 2000 and 2008. See red arrows. These are painted by the indicator based on technical analysis .

In 2011, Black Monday, yes, we got another brief crash, however, this was more market panic due to ‘Black Monday’ and fundamentals would suggest it was not the start of a long term bear market. it wasn’t.

In 2018 we get another red down arrow. Again, this was the Fed raising interest rates. As they reversed their stance, this arrow can also be ignored.

Then we get the Covid crash. Without the Feds trillions of dollars in money printing, this would very likely have been the start of a long term bear market as the indicator suggests. However, as the Fed poured money into the economy, you can see the indicator paints a green arrow showing a quick market reversal back to the upside….

Today, price has already broken well below support. (the green box)

The recent candle pattern is a classic long term bear market pattern. The previous quarter was a red candle that did not break support….see 2000 and 2008. The next candle does, as it has now, and in 2000 and 2008.

If the current red candle CLOSES below 4200 at the end of June, this is a strong statistical confirmation of the start of a long term bear market.

I’ve back tested this to the 1960s with good results. For more info, contact me directly for private consulting.

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