S&P 500 is about to hit the 4,000 price market.
Based on historical data, the equities market has not been kind to traders and investors whenever the S&P 500 encounters the thousand level marker. History has shown that there have been mid- to long term consolidation phases at the S&P 500 1000, 2000 and 3000 price levels.
TAKEAWAY
- The S&P 500 thousand level markers have historically behaved like a magnet based on the 1,000, 2,000 and 3,000 price levels.
- We can expect significant market volatility in the days ahead.
- Significant market volatility presents numerous trading opportunities for all our A.I. robots because drawdowns create volatility and opportunities for securities mispricings. These mispriced events create high reward to risk opportunities for our pattern recognition A.I. robots to exploit.
Key Statistics for S&P 500 1,000 price level
| Details | |
|---|---|
|
|
1998-01-26 to 2009-08-31 |
|
Days Duration |
4,228 days |
|
Max Return above 2,000 price level |
+57.8% |
|
Max drawdown below 2,000 price level |
-33.11% |
|
Number of times when price closed above 1,000 price level only to revisit the level again (Weekly Candle) |
8 |
Key Statistics for S&P 500 2,000 price level
| Details | |
|---|---|
|
|
2014-08-25 to 2016-06-27 |
|
Days Duration |
672 days |
|
Max Return above 2,000 price level |
+6.79% |
|
Max drawdown below 2,000 price level |
-9.48% |
|
Number of times when price closed above 1,000 price level only to revisit the level again (Weekly Candle) |
12 |
Key Statistics for S&P 500 3,000 price level
| Details | |
|---|---|
|
|
2019-07-08 to 2020-06-29 |
|
Days Duration |
357 days |
|
Max Return above 2,000 price level |
+13.29% |
|
Max drawdown below 2,000 price level |
-26.77% |
|
Number of times when price closed above 1,000 price level only to revisit the level again (Weekly Candle) |
6 |
Conclusion
Based on the 1,000, 2,000 and 3,000 price levels, the S&P 500 thousand level markers have historically behaved like a magnet.
While the range of max returns and max drawdowns are highly variable across the 3 levels, the following trends observations can be made and applied to the S&P 500 4,000 level:
- Once the 4,000 price level is broken above, we can expect the 4,000 price level to be revisited again (history suggests 6-12 times).
- The consolidation period around the 4,000 level may be shorter than all 3 previous instances.
We can expect significant market volatility in the days ahead, which will present numerous trading opportunities for all our A.I. robots as drawdowns create volatility and opportunities for securities mispricings. These mispriced events create high reward to risk opportunities for our pattern recognition A.I. robots to exploit.
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