Alright, listen up, my chart-watching warriors! šÆāØ Weāve got ourselves a spicy situation on the S&P 500 Weekly Chart, and itās SCREAMING caution right now. šØ
The big question? āIs this time different?ā Spoiler alert: Probably not. Letās break it down š:
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šØ Bearish Divergence 101
First, letās talk about the elephant in the room: BEARISH RSI DIVERGENCE.
š Price is making higher highs. (Woohoo, right? Wrong. š¬)
š RSI is making lower highs. (Oof. š)
This is like your carās engine light coming on while youāre flooring it. Yeah, itās fun for now, but guess what? Youāre headed for trouble.
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š DĆ©jĆ Vu? History Doesnāt Lie!
Letās roll back the tape:
1ļøā£ Feb 2020: Bearish divergence showed up. Result? BOOM ā the COVID crash. š„š
2ļøā£ Jan 2022: Another divergence. What happened? The market went full bear mode for a year. š»š„
And now? Here we are in Dec 2024, and the exact same pattern is rearing its ugly head. Do we really think this time is different? I donāt think so.
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š The Bearish Setup:
š Trendline Resistance: Weāre right at the top of a multi-year rising trendline. This is a make-or-break zone.
š RSI Downtrend: The RSI is already sloping down, showing weakening momentum. Buyers are running out of gas. ā½ļøšØ
š” Translation: This rallyās on borrowed time, folks.
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š„ Georgeās Hot Take:
This is what I call a āSELL THE RIPā scenario. Hereās the plan:
1ļøā£ Watch for a rejection near the current highs (6,050ā6,100).
2ļøā£ If we break below 5,800, itās GAME OVER ā bears take the wheel. š»
3ļøā£ Targets? 5,400 is in the cards, and if things get ugly, we could be staring at 5,200.
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BUT WAIT⦠IS THIS TIME DIFFERENT? š¤
Youāll hear the permabulls saying, āOh, the market is resilient, blah blah.ā Sure. But guess what? Patterns donāt lie.
If this divergence plays out like it has TWICE before, weāre looking at some serious downside. Donāt fight the charts, fam. š
Final Thoughts from the Bear Cave: š»
The S&P 500 is flashing warning signs loud and clear. This isnāt the time to be a hero. Play it smart:
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Tighten stops. š¦
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Hedge your longs. š”ļø
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Be ready to SHORT if we break support. šÆ
Letās see how this plays out, but remember: The charts always win. š Trade safe, my legends. āļø
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This post is originally published on ROADTOMILLION.