$SPY ~ Why A Crash Won’t Surprise Me for AMEX:SPY by realcapmillen

Firstly: This is not a prediction.

I just say what I see. And what I see is, a tentative market top that looks different than all the previous “tops” this year, including the 2020 crash.

I will put “top” in quotes because of course, I cannot be sure that is indeed a top until after the fact; obviously.

What’s different about this “top”? My labelled chart tells all, but in summary:

  • There are very few or very small gaps. A clear gap almost always represents a “shock” in the system. A fall with virtually no gaps, in my view, means a structured, calm, almost rational fall.
  • There is a cluster of red candles meaning this indeed “methodical” selling, also relating to the fact that there are no big gaps

Take a look at the 2020 crash, and all mini tops this year (2021). You’ll see nothing but choppiness and gaps. Panicking, in other words.

Take a look at the 2008 crash:

As you can see, virtually no gaps near the top. A structured, “rational” fall, later ending up in a recession.

I’m not saying a crash will happen, obviously. But I would not be surprised, and I just say what I see.

And what I see is, a “top” that looks different from everything recently before it.

Side Note:

It also looks the “Smart Money Index” has been on a consistent downtrend since 2018.

I don’t think this is my strongest point, so I left as a mere side note. Make of it what you will.

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