As you can see on the chart, the S&P500 shows as of today a behavior reminiscent of what we saw in the 1980s - 1990s where short-term retracements were absorbed between MA25 and MA50 on the monthly graph. Before this behavior we had a big ABC correction in the 70s, which is similar to the ABC correction we saw in the 00s after the parabolic uptrend in the late 90s.
After the big ABC correction in the 1970s, the index recharged after a re-test of the MA200 on the monthly graph before we took off into a long-term upward trend, similar to what we saw after the ABC correction in the early 2000s.
At present, the situation looks relatively similar to the 1980s with retracements to in between the MA25 and MA50 where buyers are stepping in for further uptrend. In the short term, these quick retracements below MA25 against the MA50 are considered as frightening for investors, but in the long term, these rapid short-term downturns are healthy for the long term were short-term investors are shaken out and supply is picked up by long-term buyers(/smart-money).
This is not financial advice.
/141T
After the big ABC correction in the 1970s, the index recharged after a re-test of the MA200 on the monthly graph before we took off into a long-term upward trend, similar to what we saw after the ABC correction in the early 2000s.
At present, the situation looks relatively similar to the 1980s with retracements to in between the MA25 and MA50 where buyers are stepping in for further uptrend. In the short term, these quick retracements below MA25 against the MA50 are considered as frightening for investors, but in the long term, these rapid short-term downturns are healthy for the long term were short-term investors are shaken out and supply is picked up by long-term buyers(/smart-money).
This is not financial advice.
/141T