Are you prepared for a crash this severe?

 We are just seeing a TA setup that may be a precursor to a monumental crash of the stock market. That is: the 9-month EMA finished October below the 20-month EMA. This is a “bearish cross” which should be a big cause for concern in the months ahead. It’s warning of an accelerated decline in the stock market that may be coming to kick off 2023.

Why am I sounding so alarming? Well I'm a student of history, specialised in the stock market history! If we look at the similar setups in the past, we have five examples of this pattern over the past 50 years. In two of the cases, stocks fell 10% after the bearish cross. The other three times, stocks fell 33% thereafter. See the charts below.

Following these examples, a mild decline gives us a target of about 3200 on the S&P 500. A more severe decline brings the index down toward 2400 in the months ahead.

Will we definitely get this kind of crash? Of course not. But at least it is prudent to be cautious at the moment when the risk reward ratio is so much tilted towards the downside, correct?

I was just visiting this well today and was thinking of not falling off the cliff into it. I hope no one would if the upcoming market crash indeed intensifies.

Don't tell me you are not warned!!