S&P 500 thoughts: A moderate or severe correction?
@TechnicalHunter:
I've defined a bearish crossover as the short-term moving average (20-day, red) crossing below the medium-term (50-day, black) moving average. This event occurred on September 22.Here is how I am thinking about the next few weeks. The way price reacts after this crossover is important in assessing the likelihood of a severe or moderate outcome. Two takeaways from the chart: 1. In moderate events, the correction tends to find a bottom in close proximity to the crossover point. The instances marked from this year, on average, witnessed a decline of 7.5% 2. In severe events, prices continue their descent, and any relief rallies face resistance around the short and medium-term moving averages. In 2022, severe events saw declines ranging from 13% to 20% The decline from the July peak through Se