Going to keep an ongoing journal of SPY/SPX observations here for a while, and at times their bastard stepchild ES.
2018 "Santa" rally pump and dump during Fed rate hike cycle. This is SPY daily chart from September 2018 - February 2019 Fed chief Powell gives markets message they wanted (cnbc.com) "History never repeats. Man always does." - Voltaire
The chart doesn’t look the same at all. I disagree with this viewpoint. We had a triple top on the daily, VS We’ve been making higher highs / lows
Hi Seykiyo, thanks for posting your own take on the current SPY. The thesis I'm working with is that the seasonal Santa ramp in 2018 is the same as what we just experienced in 2022. This is why I say that I use charts, but I am not a pure chartist. You are correct. In 2018 we had a double top after a down trend, which is a sort of bear flag. In 2020 we've had a bull channel (higher highs and higher lows, but still just a channel and not a breakout), which is also a form of a bear flag. Therefore, while you see these as different because of "chart patterns," I see them the same based on market behavior. What is the same is that during both periods the Fed was in a tightening cycle and the market was looking for the pivot. What is interesting about 2018 is that the Fed pivoted after the final low of the bear market. That is unusual. Usually the Fed pivots, and then the market dives. Much of that is probably due to then President Trump haranguing Powell to cut rates rather than increase them. This time, we can't even be sure that current President Biden is even aware of the Fed. Here is a chart of SPY that I posted on ET back on October 30, 2022 SPY made it to the upper trend line and has been selling off a little ever since. Imo, both of these scenarios are still very much alive. Full disclosure I am short SPY from premarket last Firday and I posted that here at ET as well. The good news is we don't have to decide here and now whether your higher highs and higher lows is a new uptrend or if it is merely a bear flag, as I am proposing it might be. Soon enough, the market will put the both of us in our places.