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OT: American Politics

Preston said:
We're speaking different languages. I don't think any of this has to be rational nor do I even think about these things because it doesn't typically apply. When the indexes are as extended as they were prior to this dip, they tend to pull back. All throughout history. So yes I felt a pullback was a highly probable outcome. Maybe a correction, maybe a bear market. I don't know that part or the timing.
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Fair enough. You follow it more closely than i do.

All those charts there truly don't look like any type of bubble to me tho. The trough at the end of 2022 / early 2023 looks like much more of an outlier to me, and i said as much at the time that it seemed especially irrational based on all the hard economic data. I'd be surprised at any real downturn coming.
 
Let's look at SPYs Weekly Relative Strength Index which is an unbiased measure showing how extended a chart may or may not be. Anything above the dotted line is considered "overbought". The left is 2018 which resulted in a 13% pullback, the next one is 2020 which resulted in.. We know. We won't count that. And the most recent example is this year. You have to go back over 20 years to find a more overbought environment. Of course these are favorable conditions for a correction, if not bear market.

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zeke said:
Fair enough. You follow it more closely than i do.

All those charts there truly don't look like any type of bubble to me tho. The trough at the end of 2022 / early 2023 looks like much more of an outlier to me, and i said as much at the time that it seemed especially irrational based on all the hard economic data. I'd be surprised at any real downturn coming.
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I would always bet against a bear market because they are just not the norm. I am just always open to the possibility of it. And it doesn't have to mean it's end of the world if it does happen. Correction (-10 to -19%) is probably the likeliest scenario but we may even escape that on SPY.
 
Preston said:
Let's look at SPYs Weekly Relative Strength Index which is an unbiased measure showing how extended a chart may or may not be. Anything above the dotted line is considered "overbought". The left is 2018 which resulted in a 13% pullback, the next one is 2020 which resulted in.. We know. We won't count that. And the most recent example is this year. You have to go back over 20 years to find a more overbought environment. Of course these are favorable conditions for a correction, if not bear market.

View attachment 21494
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Cool.

Except that the lines on the chart are currently....below the dotted line?
 
zeke said:
Cool.

Except that the lines on the chart are currently....below the dotted line?
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Yes that happens after SPY falls 9% from highs to lows. That could be the bottom. But just like we don't just go straight up, when we go down it's not always straight down either. So yes after the fall, the RSI is no longer signalling an overbought environment. I was speaking to the idea that were weren't overextended prior to the fall. We were. Now we're dealing with anxious investors and a volatile environment.

Would be cool if we v-shape and get back to highs immediately though.
 
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