After making the dreaded "Death Cross" way back in mid-March, we have finally hit our goal of S&P 4,000, which is the 20% pullback line we've been expecting since the fall. Now we'll have to see what kind of bounce we get off this bottom but fortunately we are still using the same lines predicted by our flawless 5% Rule™ since we first drew the chart. My note to our Members at the time was:
As we predicted in our Live Trading Webinar last month, we're about to hit that "Death Cross" on the S&P 500 and that is BAD. Even though we could see it from literally a mile (and a month) away, it will still come as a surprise to traders and analysts, who use TA completely wrong on a mass scale. As I said at the time, if you understand HOW a chart is made, then you can predict what it will look like in the future. If you are GUESSING where the market will go based on the chart you see - you're doing it wrong.
Very simply, the 50-day moving average changes slower than the 200-day moving average and "slower" isn't just some vague notion – it does, in FACT, change at a pace that is 25% slower than the 50-day moving average so every day the market closes below the 200-day moving average, it drags the 50-day moving average 4x lower than it does the 200-day. Therefore, we KNOW how many days it will take before we get our crosses long, long in advance.
What does the Future hold? Well we have the Fed Meeting next week and inflation is out of control so it's not at
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