BULLISH Signal flash with 2008 failure example

2022년 10월 2일

There is some discussion taking place regarding the divergence of SPY and HYG during the last few days and this divergence is a signal for marking the market bottom.

I would like to point out while this generally is a true indication of a potential reversal/bottom (under normal circumstances).
We are not dealing with normal circumstances.

The same signal existed in 2008 (also not normal circumstances) between 2 Jun 08 - 19 Jun 08. The "rally" in SPY was very, very lite before failure. SPY only "rallied" 2.7% before
cycling back down another 10%, holding in range for 2 months then waterfalling down another 38%.

Use extreme caution IF trading this signal.
I would consider this signal as being "Set-up", the "Follow-Thru" would be price moving above 373.04

2008 required a follow-thru above 141.17, "rally" price high was 137.12 which obviously failed to reach the follow-thru requirement and prices failed through the support. Down ~48% within 5 months.

This is not a prediction/forecast, this is pointing out potential of failure while others are discussing potential of success.