SPY 500 Scenarios
Price action has run out of energy near 340 marking a swing high. Price has fallen as far as 2008 decline in absolute terms, NOT % (20% in 2008 vs 10% in 2020).
Charting this on a weekly periodicity and adding warning lines, sliding parallels and 3 Minor Median Lines.
The first trend barrier in Green is the Original Path of Price. As of this writing price action has gone from Blue to Blue (across the entire range). Price will either bounce from this Lower Median Line or accelerate down through it. This area is a key energy point (see details below) At this time price has made a small bounce. Market structure offers some support for stops under 266 if this where a buy entry. I would recommend waiting for price to prove this Lower Median Line holds before buying the dip. If this trend is maintained, plenty of better long entry points will emerge.
The 2nd and 3rd indicate possible paths. If price retraces quickly YET above the 330 range it would indicate slightly concurrent trend barrier. The Original Trend Barrier still prevails at this time.
The faster price retraces, the higher it needs to go. Any weak price retrace may lead to more accelerated price declines.
If price can retrace throughout the year and recoup it's energy, price declines may be less to the downside and possibly continue to advance higher.
Details on some drawings:
Because price did not retrace the highest warning line, I assumed the Hagopian Rule and adjusted the warning line below to reflect this. Price action as of this writing has slightly bounced on this line which was marked B? Using a Schiff measure because of the steep price action. Because price has currently slowed it decline at area B? it also may be a significant energy point because it coincides with the original path of price (green) and the Hagopian Rule adjusted warning line. Violation of this area will signify significant price weakness to the downside.
Charting this on a weekly periodicity and adding warning lines, sliding parallels and 3 Minor Median Lines.
The first trend barrier in Green is the Original Path of Price. As of this writing price action has gone from Blue to Blue (across the entire range). Price will either bounce from this Lower Median Line or accelerate down through it. This area is a key energy point (see details below) At this time price has made a small bounce. Market structure offers some support for stops under 266 if this where a buy entry. I would recommend waiting for price to prove this Lower Median Line holds before buying the dip. If this trend is maintained, plenty of better long entry points will emerge.
The 2nd and 3rd indicate possible paths. If price retraces quickly YET above the 330 range it would indicate slightly concurrent trend barrier. The Original Trend Barrier still prevails at this time.
The faster price retraces, the higher it needs to go. Any weak price retrace may lead to more accelerated price declines.
If price can retrace throughout the year and recoup it's energy, price declines may be less to the downside and possibly continue to advance higher.
Details on some drawings:
Because price did not retrace the highest warning line, I assumed the Hagopian Rule and adjusted the warning line below to reflect this. Price action as of this writing has slightly bounced on this line which was marked B? Using a Schiff measure because of the steep price action. Because price has currently slowed it decline at area B? it also may be a significant energy point because it coincides with the original path of price (green) and the Hagopian Rule adjusted warning line. Violation of this area will signify significant price weakness to the downside.
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