Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

S&P 500 Long Term Activity is turning to Bear?

53 sec read

Three Consecutive negative quarterly returns since the start of the year 2022. That’s the current identity of S&P500 which happened only in bear markets. Earlier three consecutive negative quarters happened during the year 2000 and 2008 bear markets.

S&P 500 Quarterly Charts

S&P 500 Drawdown

Though the last two days S&P500 had come up with more than 5% returns with a sharp pullback from the lows, S&P 500 drawdown from the peak holds above 20%. The current drawdown is at 20.97% from all time high.

S&P 500 Daily Charts with Equity Drawdown

200-Week Moving Average

In classical technical analysis if we apply the 200 Moving average on the weekly charts one can find sharp hook reversal mostly around the years 2011, 2016, 2018 & 2020 which are the turning points for the mini bull market from thereon.

However, the year 2008 with multiple consecutive negative quarters pushes down below the 200 MA and sustained for a longer period resulting in almost 1.5 years of the bear market from the peak made during Oct 2007.

The Year 2022 is no different and it holds similar consecutive negative quarters and just dipped below 200MA on the weekly timeframe and bounced back. The current 200 MA on the weekly timeframe stands at 3684.

Right now 3684 is the likely long term reference more if the S&P 500 sustains below the 3600-3684 range more the odds of a possible bear market in the long term.

So What do you think year 2022 is the start of bear market or just a hook reversal as usual?

Rajandran R Telecom Engineer turned Full-time Derivative Trader. Mostly Trading Nifty, Banknifty, USDINR and High Liquid Stock Derivatives. Trading the Markets Since 2006 onwards. Using Market Profile and Orderflow for more than a decade. Designed and published 100+ open source trading systems on various trading tools. Strongly believe that market understanding and robust trading frameworks are the key to the trading success. Writing about Markets, Trading System Design, Market Sentiment, Trading Softwares & Trading Nuances since 2007 onwards. Author of Marketcalls.in and Co-Creator of Algomojo (Algorithmic Trading Platform for DIY Traders)

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