Replies to post #37853 on lowtrade

[lowtrade]

Crash IMO no, correction or retrace could be. These charts are part of the reason for my concern heads up post.

My Rule of Thumb for market corrections is the rubber band effect seen from the 50 day on the S&P 500.

Expect retrace at 6% above and expect correction at 8%. A retace could reach the 50 day. A correction passes and comes back quick. A crash would be when it doesn't come back quick, say 2 weeks. Then continues to 6%/8% below the 50.

We want a stall in price a week or two ONLY at my 1650, so the 6% envelope can get breathing room.


Rubber band effect chart;

short
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=6&dy=0&id=p93232204917
long
http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=3&mn=0&dy=0&id=p53965082729