In this post I'm going to look at the similarities between the 2008 crash and what's currently going on in the market, there are some concerning similarities.  The S&P500 will be used in the example below.

The idea of this is not financial advise, it is to provoke thought and discussion by looking at what is going on in the broader market.

Hopefully you can see the chart and numbers labelled as I'll describe those in more detail later.

(ETF: ticker SPY) 

2008 Crash - S&P500

1) For any of you that follow the Wyckoff Method you'll know that point 1 is an UTAD (upthrust after distribution).

2) Is a LPSY (last point of supply) that is a weak rally on low volume.

3) Is a weak rally on even lower volume followed by a large drop in price.

4) Is a SC (selling climax) 

5) Is a AR (automatic rally) where demand comes in and the market rallies

Stopping here for a second to explain.  Once a SC and AR has happen you'll usually find a trading range follows.  This trading range will be accumulation or distribution, we can use price volume analysis to help determine which.  In short, if the shares are under accumulation we'd expect to see greater buying volume on up days and less volume on down days.  The opposite if the stock is being distributed - i.e., large selling volume with not much buying.

6) Within a trading range there is a test of the SC which can be seen at point 6.

7) Point 7 is another UTAD.  If you look at the volume building up to 7 when the price was increasing it is much weaker than the selling volume before point 6.  This gives us the impression the shares are being distributed as there is not much buying demand.

8) Before point 8 you can see the significant selling volume on the way down.  The rally between point 8 & 9 is on lighter volume and continues to confirm our assumption this is distribution.

9) Volume is weak on the rally followed by large volume as the price decreases into point 10.

10) Selling volume is large followed by a weak rally and then continued large selling volume.  This is the point before the price 'fell off a…

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