IBD is showing two nature pictures

lmkwin

from the front page of their website

markd

Hmmm. Wonder what it means.

lmkwin

Maybe doing a cross promotion of Bear Week on Animal Planet or something like Shark Week. They look like friendly bears.

lmkwin

New animal picture on IBD

markd

Hmm. He's behind bars. Is it a secret message?

lmkwin

Also only three legs and one eye showing. I think that it may be a secret message. But to whom? And what is it?

lmkwin

A picture of a bear today. Looks pensive

markd

Well, last time he was lying down. This time he's on his feet. Next time he'll be at full gallop?

lmkwin

looks like he may be thinking about turning around and going back up the hill.

lmkwin

The bull is tired

lmkwin

It's a bear, and a bear with horns

lmkwin

Bear market? I certainly don't think so at this point. If we take a 20% drop to mean entering bear market, there is a lot more to go before even starting the discussion. And if it happens quickly, it usuall resolves in the same manner. Or is it a normal and expected pullback? They happen in bull markets and there is still a lot more to go before we get there.


The monthly chart for $SPX with a 10% zigzag line added

lmkwin

Oh my. This is getting scary!!! Look at that BEAR!!!!

markd

A full 20% correction would be 4266 on the SP500 (based on the emini sp500 june contract), just below the starting low of the October - April up leg. A retracement to fib 62 of the October up leg would be 4660. Fib 62 (61.8) is a common retracement level. The fib 62 could be the target of a first down leg, and the October low a possible second down leg target.

But, based on the chart, a more likely target of the current down leg is the October up leg fib 50 retracement level at 4788, which coincides pretty closely with the July peak around 4800 (past peaks - i.e. broken resistance, become support). Whether we go into a bear would be determined by the up leg(s) from that point. If they don't make a new high before retracing below support, the market would usually go lower.

Not that I would take any position based on any of these observations, but fun to speculate.

lmkwin

I get a kick out of the headlines and pictures they throw out there to try and get attention The Great Bear Phase of Q2.

Nice thing about PnF charts is that you can put a SMA 1 on them and the line will bisect each column.
Current Traditional scale PnF chart with all of the High Pole Columns highlighted at the High Pole Warning level. A High Pole Warning is an 50% retracement of the X column. Note the difference in appearance betwen the bear market in 2022 and the current bull market



For added reference, the prior bear market in 2020 produced a series of High Pole Columns. Most retraced a certain extent, which is normal and to be expected. When you see a High Pole Column, it rarely makes sense to initiate positions until the retracement is shown. The retracement may show on a different scale, but it's usually there upon review of the charts.